CTE 4829 Exam1 Review Production distribution chain Dickerson 1999 Know these definitions Findings Apparel materials added to face fabric Trade Agreements Established by governments to encourage regulate or restrict trade between countries Trade Barriers Regulate or restrict trade ex import limits tariffs quotas Trade Balance exports imports Exports Goods leaving one country that are shipped to another country in exchange for revenue Imports Goods entering into a country for domestic use or consumption Trade Surplus value of exports exceeds value of imports positive trade balance Trade deficit value of imports exceeds value of exports negative trade balance Protectionism Measures that some countries adopt in order to protect their domestic markets from imports Economic integration removal of trade barriers between particular nations for mutual benefit Vertical integration Occurs when a single firm operates at more than one stage of production Horizontal integration firm expands to produce more than one product in same stage of production new products compete with old products created by same firm Gross National Product GNP Average output per domestic worker in a nation within that nation Gross Domestic Product GDP Market value of outputs of products services within country in a year Gross Domestic Product per capita GDP divided by the number of people in the population Purchasing Power Parity PPP Adjusted GDP in each country from Consumer Price Index CPI Determines relative buying power of each currency Wholesale Marketing Apparel manufacturers sell product lines either at Wholesale markets ex prey a porter in Europe or to a buyer s office Retails place orders and may request changes Firm A business corporation proprietorship or partnership ex manufacturer contractor supplier retailer Past 20th century firms were small family owned Today s 21st century firms are large transnational multinational mergers and acquisitions vertical integration Mergers and acquisitions Merger consolidation of two companies to form a new company Acquisition the purchase of one company by another with no new company being formed Examples VF Corp Lee s Bought out Vans Inc Reebok Int l bought out Hockey Company Holdings All production of fibers yarns fabrics fabric finishing and production of findings Many Firms are vertically integrated in yarns weaves and finishes Many fabric mills are horizontally integrated Textile complex Combination of related industries from fiber to fabric through end uses of apparel interiors and industrial products does not include distribution Firms in Textile Complex Level 1 Textile and Findings Manufacturers Level 2 Apparel Manufacturer Contractors and Retail Product Developer Just in time JIT Manufacturing Quick Response Level 3 Retailing Apparel manufactures merchandising apparel production and wholesale marketing Retail product developers private brands sourced from contractors both in house and outside prod development Apparel contractors produce or arrange production of specific garment cut make trim CMT or full package contractors Inventory control system of components and finished goods Products produced as needed less inventory Less markdowns Electronic transmission of data between retailer and producer Shortens production cycle time Shortened delivery times and offers other incentives Sale of merchandise services to the customer Overstoring growth of brick and mortars Multiple channels direct marketing catalog television and e tailing Specialty stores increased private labels Department stores Mass Merchandisers Off Price retailers Ultimate goal of apparel business Shifts in consumer demographics growth of Hispanic Asian and Muslim populations Satellite TV and Internet Globalization of fashion Educated consumers demand variety Both utilitarian and hedonic shopping experiential retailing NAFTA North American Free Trade Agreement agreement among the United States Canada and Mexico designed to remove tariff barriers between the three countries WTO World Trade Organization global international organization dealing with the rules of trade between nations NAICS North American Industry Classification System uses 2 6 digit hierarchal classification system First 2 digits the economic sector 3rd digit the subsector 4th digit the industry group 5th digit the NAICS industry 6th digit the national industry FTA Fiber textile apparel Describes the overall picture of the textile and apparel manufacturing industry Dickerson 1999 AAFA American Apparel and Footwear Association national trade association representing apparel footwear and other sewn products companies and their suppliers which compete in the global market Level 4 Customers NAFTA NAICS FTA WTO AAFA Level of Living standard of living definition Urgently desired and striven for plus Working conditions Freedom of movement and association Safety and security Political and environmental atmosphere Level of Consumption Standard of Living concept Level standard of living level of consumption that is actually experienced enjoyed or suffered by a group Level of consumption or living what is experienced enjoyed or suffered by an individual or group Nondurable good ex food fuel Services of semidurable durable goods automobile house clothing Services of humans by individuals or grouse in given period Decline in level of consumption is reduction in quantity or quality of services Rise in level of consumption is increase in volume or improvement of quality Least Developed greatest level of poverty Newly Developing poor Developing Transitioning from developing to developed status less poor Developed richest unemployment rate Population below poverty line Literacy male female Infant mortality Life expectancy GNP Gross National Product or GDP Gross Domestic Product Based on the country s economic development Development is described by Levels of development of countries Trade positive negative domestic international global Types of Goods Superior goods economic luxuries preferred product according to the standard of living as income increases amount spent increases As income decreases amount spent decreases Normal goods spending pattern reflects the economic necessity you get what you can afford as income increases amount spent decreases As income decreases amount spent decreases Inferior goods products consumed out of necessity but not preferred making do the amount spent decreases as income increases and increases when income