Bachelor of General Studies (BGS) Degree Practice Exam

What would a firm likely do to develop a global supply chain?

1. Increase labor force in home country

2. Purchase from local suppliers only

3. Source materials from foreign sellers

4. Limit operations to domestic suppliers

The correct answer is: Source materials from foreign sellers

A firm seeking to develop a global supply chain would likely source materials from foreign sellers. This strategy allows the firm to access a wider variety of resources, potentially lower costs, and benefit from different industries and innovations available in various countries. By procuring materials internationally, a firm can optimize its supply chain, leveraging the strengths of different markets to enhance productivity and efficiency. Increasing the labor force in the home country or purchasing only from local suppliers might limit the firm's access to better pricing and diverse materials available abroad. Similarly, limiting operations to domestic suppliers would confine the firm to the local market, missing out on competitive advantages and the opportunity to create a more robust and flexible global network. Sourcing materials from foreign sellers promotes a more integrated global supply chain, fostering innovation and adapting to market demands effectively.