Study Guide for Exam 1: Understanding Textiles, Apparel, and Trade Classifications - Prof., Exams of Production and Operations Management

Download Study Guide for Exam 1: Understanding Textiles, Apparel, and Trade Classifications - Prof. and more Exams Production and Operations Management in PDF only on Docsity! AMT 413- Study Guide Exam 1 1. Understand Gross national product (GNP) and Gross domestic product (GDP). Gross National Product (GNP): Value of annual output of domestic residents including output produced outside the country. Per capita GNP= GNP/Population. Gross Domestic Product (GDP): Market value of annual output of products and services produced within a country. Classifications... Rich vs poor. First, second, third world. Least developed, newly developing, developing, developed. Low income, lower-middle, upper-middle, high income. 2. The definitions of Exports, Imports, and Trade balance. Exports: Goods shipped to another country Imports: Goods available domestically because of exports of another country Trade balance: Exports-imports. Trade surplus if positive, deficit if negative. 3. What do the abbreviation terms such as NAFTA, NAICS, HTS, HS, SIC, and SITC stand for, respectively? NAFTA: North American Federal Trade Agreement NAICS: North American Industrial Classification System. Replaced SIC system in 1997 and updated every 5yrs. Also hierarchial and are up to 6 digits long vs 8 w/ SITC HTS: Harmonized Tariff Schedule. Made effective 1989. Compares hierarchical stricter for describing all goods in trade for duty, quota, and statistical purposes. Is maintained by United States International Trade Comission (USITC) and is enforced by The Bureau of Customs and Border Protection (CBP). HS: Harmonized Schedule products. The 4-6 digit product categories SIC: Standard Issue Classification. Are numbers that classify industry and are hierarchial (higher the number, more detailed the industry) SITC: Standard International Trade Classification. Compiling international trade statistics on all merchandise entering international trade, and to promote international comparability of international trade statistics. Reflects materials used, processing stage, market practices and uses, importance of the commodities, and tech changes. 4. Why did the U.S. government develop NAICS to replace SIC? Standardizes identification of textiles and apparel in global commerce and facilitates communication between firms and agencies, provides record-keeping capabilities.. More detailed than SIC, does a much better job of covering service and technology industries and covers all 3 NAFTA economies. Adopted the metric system to better support US companies to conduct international business. 1 5. Know NAICS313, NAICS 314, and NAICS 315 represent the business sectors of “Textile Mills”, “Textile Product Mills”, and “Apparel Manufacturing”, respectively. NAICS 313: Textile Mills NAICS 314: Textile Product Mills NAICS 315: Apparel Manufacturing 6. Know NAICS442, 448, 452, and 454 represent the business sectors of “Furniture and Home Furnishings Stores”, “Clothing and Clothing Accessories Stores”, “General Merchandise Stores”, and “Nonstore Retailers”, respectively. NAICS 442: Furniture and Home Furnishing Stores NAICS 448: Clothing and Clothing Accessories Stores NAICS 452: General Merchandise Stores NAICS 454: Nonstore Retailers 7. The international family of economic and social classifications are comprised of three major types, differentiate between them and give an example of each. 1. Reference classifications: Economic and social classifications that are a product of international agreements approved by the UN statistical commission or other agency. E.G. World Customs Organization (WCO) or WHO. They have a broad acceptance and official agreement. 2. Derived classifications: Are based upon reference classifications. They are prepared wither by adopting the reference classification structure and categories, and then possibly providing additional detail or they may be prepared through rearrangement or aggregation of items from one or more reference classification. Derrived classifications are often tailored for use at the national or multi-national level . 3. Related classifications: Those that partially refer to reference classifications, or that are associated with the reference classification at specific levels of the structure only. For example 1. Reference International Standard Industrial Classification of All Economic Activities (ISIC) 2. Derived General Industrial Classification of Economic Activities within the European Communities (NACE) 3. Related Australian and New Zealand Standard Industrial Classification (ANZSIC) North American Industry Classification System (NAICS) 8. Know that the Harmonized Tariff Schedule (HTS) comprises a hierarchical structure for describing all goods in trade for duty, quota, and statistical purposes. 2 Trade Drivers: 1. Customers/ consumer needs- becoming more demanding and seeing continueous improvement from suppliers (cost, quality, service, novelty) 2. Supplier availability- new companys in international markets. Competition, emerging oportunitites, and international expansion 3. Competitive rivalry 4. Process characteristics- labor intensive, stable sub-assemblies, and product characteristics 5. Politic, economic, and business factors- (overseas +subsidies), (comparative advantages cost vs quality), and sourcing company strategies and intensity of competition Inhibitors: 1. Ignorance 2. Distance//reliability 3. Additional costs and complexity 4. Trade barriers 5. Uncertainty/ethics 18. Know the three major ethical issues in today’s apparel sourcing and briefly discuss each of them?  Worker rights- o Child labor o Companies have established codes of conduct (companies agree to meet basic standards)  Fair trade  Environmental consideration 19. What is the “Triple Bottom Line” concept? Triple Bottom Line Concept: Companies have come to realize that embracing responsible causes can have a positive imact on their bottom line. Also that ignoring them can prove disastrous. 20. The definitions of ethics, corporate social responsibility (CSR), and sweetshop in today’s apparel industry? Morals: Degree of conformity w/ generally accepted or prescribed standards of goodness or rightness in character or conduct. 5 Ethics: System or code of morals of a particular person, group, or profession. Application of a system or code to decisions and/or particular problems of conduct. Corporate Social Responsibility (CSR): Those actions taken by a firm that are intended to benefit society beyond the requirements of the law and the direct interests of the firm. He process by which businesses negotiate their role in society. Sweatshop is a factory, usually in a third-world country where people work for a very small wage compared to their first-world counterparts, producing a variety of products such as clothing, toys, shoes, and other consumer goods. 21. Understand the objective of the “Apparel Certification Program” in WRAP and its 12 principles. Objective: independently monitor and certify compliance with the specific standards, ensuring that a given factory produces sewn goods under lawful, humane, and ethical conditions. WARP 12 Principals (know 10) 1. Compliance w/ Laws and Workplace Regulations 2. Prohibition of Forced Labour 3. Prohibition of Child Labour 4. Prohibition of Harassment or Abuse 5. Compensation and Benefits 6. Hours of Work 7. Prohibition of Discrimination 8. Health and Safety 9. Freedom of Association & Collective Bargaining 10. Environment 11. Customs Compliance 12. Security 22. Who is Fair Trade Federation (FTF)? What is the goal of FTF? Briefly discuss the main FTF criteria (cover a least 5 of them). Fair Trade Federation (FTF): is an association of fair trade wholesalers, retailers, and producers whose members are committed to providing fair wages and good employment opportunities to economically disadvantaged artisans and farmers worldwide. 6 It directly links low-income producers w/ consumer markets and educates consumers about the importance of purchasing fairly traded products which support living wages and safe and healthy conditions for workers in the developing world. Fair Trade Federation (FTF) criteria are: 1. Paying a fair wage in the local context 2. Offering employees opportunities for advancement 3. Providing equal employment opportunities for all people, particularly the most disadvantaged. 4. Engaging in environmentally sustainable practices 5. Being open to public accountability 6. Building long-term trade relationships 7. Providing healthy and safe working conditions within the local context 8. Providing financial and technical assistance to producers whenever possible 7