MGSC 487 - Exam 3 Questions with Correct Answers Latest Update 2026/2027
Trade Compliance - Answers More than cost and logistics
Following all laws and rules when a company buys, sells, ships, or transfers goods and services
across borders.
Supply Chains are governed - Answers National Regulations
International Laws
Ethical Expectations
Importing - Answers Ensure that all aspects of trade comply with laws, regulations, and rules
Importing Regulations - Answers customs duties
product-specific standards for safety and quality
marking and labeling requirements
special licenses or permits
Compliance - Answers declare all goods
use accurate documentations
comply with specific agency regulations
ensur4e correct marking and labelling (Country of Origin)
Provide any specisl documentation (Certificate of Origin)
Code of Federal Regulations (CFR) - Answers A big collection of all rules and regulations made
by the US federal government.
These are detailed rules that tell businesses, organizations, and citizens what they must do to
follow federal law.
Key Governing Agencies - Answers US Customs and Border Protection (CBP)- tariffs and taxes
Food and Drug Administration (FDA)- food, drugs, cosmetics, and medical devices
Federal Communications Commission (FCC)- digital devices with transmission capability
Environmental Protection Agency (EPA)- chemicals, pesticides, plastics, paints
Bureau of Alcohol, Tobacco, and Firearms (ATF)
Regulatory Challenges - Answers Different legal environments across countries
,Data Protection and Cybersecurity
Environmental and Labor regulations
Political Risk and Policy Changes
Uyghur Forced Labor Prevention Act (UFLPA) - Answers US Law (2021)
Rebuttable Presumption
All items made in the Xinjiang Uyghur Autonomous Region (XUAR) are presumed to be made
with forced labor
importers have to prove otherwise with clear and convincing evidence.
Reputation Risk - Answers Threats to the name, goodwill, or credibility of a business that can
affect is revenue
Negative news (adverse media coverage) - Answers Ethics
Product quality
Criminal activity
Environmental issues
Reputation Risk Companies - Answers 2012 Greenpeace linked Nestle's palm oil sourcing to
orangutan deaths- 300,000 views on first day
2009 News of irresponsible sourcing dropped Cadbury New Zealand from number one in brand
trust to number 36
2014 Takata Airbag Recall. June 2017 filled for bankruptcy, putchased by another company
Supplier Reputational Risk - Answers Lapse in ethical conduct
Legal and regulatory findings
Doing business with sanctioned companies
- Office of Foreign Assets Control (OFAC)
Working with a state owned enterprise
- sponsoring terror
- corruption and bribery are probable
, Working with politically exposed people
Office of Foreign Assets Control (OFAC) - Answers Maintains sanctions lists (individuals,
entities, regimes, organizations, and countries
Aims to protect international trade against the threat of terrorist activities and narcotics, and
arms trafficking
It is a critical component of compliance and risk management
- vendor and supplier screening
- continuous evaluation
Determinants of Reputational Risk - Answers Reputation-reality gap--> objectively assess
reputation versus reality
Changing beliefs and expectations---> Assess and accept the impact of changing expectations-
-> strong and sustainable reputation
Weak internal coordination--> explicitly focus on reputational risk
Ways to Manage Reputational Risk - Answers Objectively assess reputation versus reality-
examine the gap between the company's reputation and actual performance, and make
necessary improvements
Assess and accept the impact of changing expectations- know that stakeholders' changing
expectations will affect reputation even if they seem unreasonable at the time.
Explicitly focus on reputational risk- recognize that this is a distinct kind of risk and manage it in
a proactive and coordinated manner. Assign one person the risk of managing reputational risk
Strategies to Reduce Reputational Risk - Answers 1. Implement comprehensive supplier
screening
2. Regularly assess supplier partners
3. Perform continuous reputational monitoring
4. Understand the "tiers" of your supply chain
- know the dependencies and risks (who supplies your main supplier- problems can occur
deeper in the chain
Trade Compliance - Answers More than cost and logistics
Following all laws and rules when a company buys, sells, ships, or transfers goods and services
across borders.
Supply Chains are governed - Answers National Regulations
International Laws
Ethical Expectations
Importing - Answers Ensure that all aspects of trade comply with laws, regulations, and rules
Importing Regulations - Answers customs duties
product-specific standards for safety and quality
marking and labeling requirements
special licenses or permits
Compliance - Answers declare all goods
use accurate documentations
comply with specific agency regulations
ensur4e correct marking and labelling (Country of Origin)
Provide any specisl documentation (Certificate of Origin)
Code of Federal Regulations (CFR) - Answers A big collection of all rules and regulations made
by the US federal government.
These are detailed rules that tell businesses, organizations, and citizens what they must do to
follow federal law.
Key Governing Agencies - Answers US Customs and Border Protection (CBP)- tariffs and taxes
Food and Drug Administration (FDA)- food, drugs, cosmetics, and medical devices
Federal Communications Commission (FCC)- digital devices with transmission capability
Environmental Protection Agency (EPA)- chemicals, pesticides, plastics, paints
Bureau of Alcohol, Tobacco, and Firearms (ATF)
Regulatory Challenges - Answers Different legal environments across countries
,Data Protection and Cybersecurity
Environmental and Labor regulations
Political Risk and Policy Changes
Uyghur Forced Labor Prevention Act (UFLPA) - Answers US Law (2021)
Rebuttable Presumption
All items made in the Xinjiang Uyghur Autonomous Region (XUAR) are presumed to be made
with forced labor
importers have to prove otherwise with clear and convincing evidence.
Reputation Risk - Answers Threats to the name, goodwill, or credibility of a business that can
affect is revenue
Negative news (adverse media coverage) - Answers Ethics
Product quality
Criminal activity
Environmental issues
Reputation Risk Companies - Answers 2012 Greenpeace linked Nestle's palm oil sourcing to
orangutan deaths- 300,000 views on first day
2009 News of irresponsible sourcing dropped Cadbury New Zealand from number one in brand
trust to number 36
2014 Takata Airbag Recall. June 2017 filled for bankruptcy, putchased by another company
Supplier Reputational Risk - Answers Lapse in ethical conduct
Legal and regulatory findings
Doing business with sanctioned companies
- Office of Foreign Assets Control (OFAC)
Working with a state owned enterprise
- sponsoring terror
- corruption and bribery are probable
, Working with politically exposed people
Office of Foreign Assets Control (OFAC) - Answers Maintains sanctions lists (individuals,
entities, regimes, organizations, and countries
Aims to protect international trade against the threat of terrorist activities and narcotics, and
arms trafficking
It is a critical component of compliance and risk management
- vendor and supplier screening
- continuous evaluation
Determinants of Reputational Risk - Answers Reputation-reality gap--> objectively assess
reputation versus reality
Changing beliefs and expectations---> Assess and accept the impact of changing expectations-
-> strong and sustainable reputation
Weak internal coordination--> explicitly focus on reputational risk
Ways to Manage Reputational Risk - Answers Objectively assess reputation versus reality-
examine the gap between the company's reputation and actual performance, and make
necessary improvements
Assess and accept the impact of changing expectations- know that stakeholders' changing
expectations will affect reputation even if they seem unreasonable at the time.
Explicitly focus on reputational risk- recognize that this is a distinct kind of risk and manage it in
a proactive and coordinated manner. Assign one person the risk of managing reputational risk
Strategies to Reduce Reputational Risk - Answers 1. Implement comprehensive supplier
screening
2. Regularly assess supplier partners
3. Perform continuous reputational monitoring
4. Understand the "tiers" of your supply chain
- know the dependencies and risks (who supplies your main supplier- problems can occur
deeper in the chain
