Information technologies in logistics development

Comprehension reading

TEXT 1. DEVELOPMENTS IN ENTERPRISE RESOURCE PLANNING SYSTEMS AND E-COMMERCE

Task 1: Scan through the text to grasp its general idea (2 min)

Rapid developments in IT, which is defined as both computing and telecommunications, have affected all aspects of business, not just supply chain management. During the 1990s, sales of IT grew to the extent that it has become the largest industry in the United States, exceeding construction, food products, and automotive manufacturing.

The creation and management of corporate databases has been facilitated by widespread implementation of ERP systems. These systems offer the promise of transactional databases that are standardized across the company, thereby facilitating integration of supply chain activities. Models are playing an increasing role in helping managers extract effective supply chain plans from these databases. Nevertheless, the purposes of such models, and their potential for improving a company's competitive advantage, are not yet fully understood by many supply chain managers.

The development of IT for managing and communicating transactional data has been a primary focus of computer scientists and information technologists for over 40 years. Still, even with the advent of ERP systems and e-commerce, we would be naive to suppose that companies have achieved permanent solutions to their data management problems.

Today's IT enables the development of modeling systems, but paths to their successful implementation remain unclear in most companies. Although scholars and consultants often use expressions such as "the company must (can, should) optimize supply chain decisions," details about how such analysis can be performed are often missing. Moreover, managers do not yet fully realize how models can provide a comprehensive, high-level view of the tangled forest of their transactional supply chain data. Based on their growing interest in modeling systems, we expect that managers will soon become much better informed. By participating in processes to extract, aggregate, extrapolate, and otherwise transform transactional data into input data required by modeling systems to support decision making, managers will gain a fresh and important perspective on how to exploit IT advances.

Task 2. After scanning the text answer the question: what is the text about?

Task 3. Read the text attentively paying attention to the underlying idea

Task 4. Read the text again and compare it with the translation on the opposite side of the broadside

Rapid developments in IT, which is defined as both computing and telecommunications, have affected all aspects of business, not just supply chain management. During the 1990s, sales of IT grew to the extent that it has become the largest industry in the United States, exceeding construction, food products, and automotive manufacturing. The creation and management of corporate databases has been facilitated by widespread implementation of ERP systems. These systems offer the promise of transactional databases that are standardized across the company, thereby facilitating integration of supply chain activities. Models are playing an increasing role in helping managers extract effective supply chain plans from these databases. Nevertheless, the purposes of such models, and their potential for improving a company's competitive advantage, are not yet fully understood by many supply chain managers. The development of IT for managing and communicating transactional data has been a primary focus of computer scientists and information technologists for over 40 years. Still, even with the advent of ERP systems and e-commerce, we would be naive to suppose that companies have achieved permanent solutions to their data management problems. Today's IT enables the development of modeling systems, but paths to their successful implementation remain unclear in most companies. Although scholars and consultants often use expressions such as "the company must (can, should) optimize supply chain decisions," details about how such analysis can be performed are often missing. Moreover, managers do not yet fully realize how models can provide a comprehensive, high-level view of the tangled forest of their transactional supply chain data. Based on their growing interest in modeling systems, we expect that managers will soon become much better informed. By participating in processes to extract, aggregate, extrapolate, and otherwise transform transactional data into input data required by modeling systems to support decision making, managers will gain a fresh and important perspective on how to exploit IT advances.

Быстрое развитие информационных технологий (ИТ), которые состоят из компьютеризации и телекоммуникаций, повлияло на все аспекты бизнеса, не только на управление цепями поставок. В течение 1990-х годов, продажи ИТ возросли до таких размеров, что эта отрасль стала самой большой в США, превосходя такие отрасли, как строительная, пищевая, автомобилестроительная. Создание и управление корпоративной базой данных облегчается реализацией широко известных систем планирования ресурсов предприятия (ERP). Эти системы предлагают перспективу взаимосвязи базы данных, которые стандартизируются во всей компании, поэтому облегчают интеграцию с деятельностью по управлению цепями поставок. Модели играют все возрастающую роль в оказании помощи менеджерам создавать на основе этих баз данных эффективные планы для управления цепями поставок. Тем не менее, цели таких моделей и их потенциал в повышении конкурентоспособного преимущества компании еще не полностью осознаны менеджерами цепи поставок. На протяжении последних сорока лет большое внимание в работах программистов и информационных технологов уделялось развитию ИТ в сфере управления и коммуникаций трансакционных данных. Даже с появлением систем ERP и электронной коммерции, было бы наивно полагать, что существуют выработанные неизменные решения проблем в управлении данными. Современные ИТ дают возможность развития моделирующих систем, но пути к их успешной реализации остаются неясными в большинстве компаний. Хотя ученые и консультанты часто используют такие выражения, как «компания должна (может, ей следует) оптимизировать решения цепочки поставок», данные о том, как анализы могут быть представлены, часто отсутствуют. Кроме того, менеджеры не полностью осознают, как модели могут обеспечить детальный, высококачественный обзор сложных ситуаций, относящихся к трансакционным данным цепи поставок. Основываясь на все возрастающем интересе к системам моделирования, мы ожидаем, что менеджеры вскоре станут более информированными. Участвуя в процессе получения, объединения, распространения в другие области, или же преобразования трансакционных данных в исходные данные, необходимые моделирующим системам для поддержания принятия решений, менеджеры получат свежие и важные взгляды о том, как использовать передовые ИТ.

Task 5. Compare equivalents underlined on both sides of the broadside. Try to memorize them

Task 6. Insert a required word or phrase in the blanks. Consult the dictionary if need be

1. advent of ERP systems

2. aggregate

3. automotive manufacturing

4. competitive advantage

5. corporate databases

6. exceeding

7. exploit IT advances

8. facilitating integration

9. optimize supply chain decisions

10. primary focus

11. rapid developments

12. remain unclear

13. widespread implementation

1. _______________________________ in IT, which is defined as both computing and telecommunications, have affected all aspects of business, not just supply chain management.

2. During the 1990s, sales of IT grew to the extent that it has become the largest industry in the United States, __________________________construction, food products, and _____________________________________.

3. The creation and management of _____________________has been facilitated by ____________________________________________ of ERP systems.

4. The systems offer the promise of transactional databases that are standardized across the company, thereby __________________________of supply chain activities.

5. The purposes of the models and their potential for improving a company's______________________, are not yet fully understood by many supply chain managers.

6. The development of IT for managing and communicating transactional data has been a _____________________of computer scientists and information technologists for over 40 years.

7. Still, even with the ________________________ and e-commerce, we would be naive to suppose that companies have achieved permanent solutions to their data management problems.

8. Today's IT enables the development of modeling systems, but paths to their successful implementation __________________________________in most companies.

9. Although scholars and consultants often use expressions such as "the company must____________________________________________________," details about how such analysis can be performed are often missing.

10. By participating in processes to extract, __________________________, extrapolate, and otherwise transform transactional data into input data required by modeling systems to support decision making, managers will gain a fresh and important perspective on how to ________________________________________.

Task 7. Checking up: read the text first in English then- its translation pattern to be ready for oral and written test

Task 8. Test – translation. Translate the passage from English into Russian: orally -10 min. trying to find appropriate Russian equivalents; in written form- 30 min. Compare your translation with the given sample

Rapid developments in IT, which is defined as both computing and telecommunications, have affected all aspects of business, not just supply chain management. During the 1990s, sales of IT grew to the extent that it has become the largest industry in the United States, exceeding construction, food products, and automotive manufacturing.

The creation and management of corporate databases has been facilitated by widespread implementation of ERP systems. These systems offer the promise of transactional databases that are standardized across the company, thereby facilitating integration of supply chain activities. Models are playing an increasing role in helping managers extract effective supply chain plans from these databases. Nevertheless, the purposes of such models, and their potential for improving a company's competitive advantage, are not yet fully understood by many supply chain managers.

The development of IT for managing and communicating transactional data has been a primary focus of computer scientists and information technologists for over 40 years. Still, even with the advent of ERP systems and e-commerce, we would be naive to suppose that companies have achieved permanent solutions to their data management problems.

Today's IT enables the development of modeling systems, but paths to their successful implementation remain unclear in most companies. Although scholars and consultants often use expressions such as "the company must (can, should) optimize supply chain decisions," details about how such analysis can be performed are often missing.

Task 9. Discussion

1. What do you know about IT?

2. How can you account for rapid IT development?

3. How will managers gain perspective to exploit IT?

4. Do the models play an increasing role in helping managers to design effective supply chains?

5. What are the ways to put IT into logistics practice?

6. Do the managers realize IT scope and advantages?

7. What expressions are used by scientist to stress the significance of IT involvement?

Task 10. Brief summary of the text (in English)

TEXT 2. ERP SYSTEMS

Task 1: Scan through the text to grasp its general idea (2 min)

An ERP system includes software and hardware that facilitate the flow of transactional data in a company relating to manufacturing, logistics, finance, sales, and human resources. In principle, all business applications of the company are integrated in a uniform system environment that accesses a centralized database residing on a common platform. Common and compatible data fields and formats are used across the entire enterprise. Moreover, data are entered once and only once, ensuring that all applications make consistent use of these data.

In 1997, worldwide sales of ERP systems and related services were estimated to exceed $10 billion. Of this total, approximately 50% was for software; 30% for installation, training, and customization; and 20% for maintenance and upgrades. The large percentage and absolute amount spent on installation, training, and customization reflects the need for significant business process redesign to bring systems and practices across diverse functions into alignment. In addition to improving human data collection and communication processes, reengineering should, but does not always, include cleansing and tightening of data definitions; for example, a reduction in the number of SKUs to those that are truly distinct.

Implementing ERP systems has proven unexpectedly difficult in many companies. Numerous articles have appeared in magazines and journals offering guidelines for avoiding the worst headaches. Even when an implementation project is well managed, the result can be disappointing due to inherent limitations of current ERP systems. These include the following:

• Imposed conformity - the ERP system imposes rigid requirements on data and processes that often inhibit the way the company can operate its business.

• Inability to employ software from multiple vendors - the company cannot integrate modules, including modeling systems, from multiple vendors with the monolithic ERP system acquired from the primary vendor.

• Incompatibility of ERP systems across the supply chain - the company cannot easily integrate supply chain databases with vendors and customers, especially those who are too small to afford a massive ERP implementation.

Current thinking is that these problems will be overcome by new ERP systems that are modular and Web enabled. Individual modules for transactional data management and modeling analysis, often developed by third-party vendors, will be bolted onto ERP systems using middleware, which provides standard interfaces for the modules.

The rapid growth in e-commerce has magnified these deficiencies of ERP systems. The expectation is that Internet-driven reengineering will require integrating business processes across corporate boundaries. Modular, flexible ERP systems will be essential for implementing interenterprise information systems for supply chains made up of several companies of varying sizes and cultures. Moreover, because e-commerce is so new, Internet companies will need the capability to modify their ERP systems as new conditions emerge.

Task 2. After scanning the text answer the question: what is the text about?

Task 3. Read the text attentively paying attention to the underlying idea

Task 4. Read the text again and compare it with the translation on the opposite side of the broadside

An ERP system includes software and hardware that facilitate the flow of transactional data in a company relating to manufacturing, logistics, finance, sales, and human resources. In principle, all business applications of the company are integrated in a uniform system environment that accesses a centralized database residing on a common platform. Common and compatible data fields and formats are used across the entire enterprise. Moreover, data are entered once and only once, ensuring that all applications make consistent use of these data. In 1997, worldwide sales of ERP systems and related services were estimated to exceed $10 billion. Of this total, approximately 50% was for software; 30% for installation, training, and customization; and 20% for maintenance and upgrades. The large percentage and absolute amount spent on installation, training, and customization reflects the need for significant business process redesign to bring systems and practices across diverse functions into alignment. In addition to improving human data collection and communication processes, reengineering should, but does not always, include cleansing and tightening of data definitions; for example, a reduction in the number of SKUs to those that are truly distinct. Implementing ERP systems has proven unexpectedly difficult in many companies. Numerous articles have appeared in magazines and journals offering guidelines for avoiding the worst headaches. Even when an implementation project is well managed, the result can be disappointing due to inherent limitations of current ERP systems. These include the following: • Imposed conformity - the ERP system imposes rigid requirements on data and processes that often inhibit the way the company can operate its business. • Inability to employ software from multiple vendors - the company cannot integrate modules, including modeling systems, from multiple vendors with the monolithic ERP system acquired from the primary vendor. • Incompatibility of ERP systems across the supply chain - the company cannot easily integrate supply chain databases with vendors and customers, especially those who are too small to afford a massive ERP implementation. Current thinking is that these problems will be overcome by new ERP systems that are modular and Web enabled. Individual modules for transactional data management and modeling analysis, often developed by third-party vendors, will be bolted onto ERP systems using middleware, which provides standard interfaces for the modules. The rapid growth in e-commerce has magnified these deficiencies of ERP systems. The expectation is that Internet-driven reengineering will require integrating business processes across corporate boundaries. Modular, flexible ERP systems will be essential for implementing interenterprise information systems for supply chains made up of several companies of varying sizes and cultures. Moreover, because e-commerce is so new, Internet companies will need the capability to modify their ERP systems as new conditions emerge.

Система ERP включает аппаратное, техническое и программное обеспечение, которое облегчает прохождение транзакционных данных в компаниях, связанных с производством, логистикой, продажами и человеческими ресурсами. В принципе, все деловые прикладные программы компании интегрированы в единую систему, которая имеет доступ к централизованной базе данных, находясь на общей платформе. Общие и совместимые информационные поля используются всей компанией. Кроме того, данные регистрируются только один раз, обеспечивая их использование во всех совместимых программах. В 1997 году, по всему миру продажи систем ERP и связанных с ними услуг были оценены более чем в 10 миллиардов долларов. Из них примерно 50% приходилось на программное обеспечение, 30% - на установку, обучение и выполнение индивидуальных заказов, и 20% - на поддержание и усовершенствование. Большие суммы тратились на установку, обучение и выполнение индивидуальных заказов, что отражает необходимость в значительном изменении бизнес процессов для объединения систем и различных практических функций в единую систему. Кроме этого, чтобы улучшить сбор данных и процесс связи, реинжиниринг должен, но не всегда, включать очистку и сокращение данных; например, сокращение числа единиц продукции до действительно необходимого объема. С внедрением систем ERP во многих компаниях появляются неожиданные трудности. В журналах появляются многочисленные статьи, предлагающих различные способы того, как избежать головной боли. Даже когда внедряемый проект хорошо разработан, результат может быть неожиданным из-за присущих ограничений современных систем ERP. Они включают следующее: -• обязательное соответствие - система ERP навязывает жесткие требования к данным и процессам, которые зачастую запрещают принятый способ управления бизнесом. -• невозможность использовать программное обеспечение, закупаемое у многочисленных поставщиков – компания не может интегрировать модули, включая моделирующие системы, приобретенные у многочисленных поставщиков с монолитными системами ERP, приобретенных у первоначального поставщика. -• несовместимость системы ERP с цепочкой поставок – компания не может просто интегрировать базу данных цепи поставок с поставщиками и потребителями, особенно теми, кто слишком мал для установки ERP. Современное мнение заключается в том, что эти проблемы будут преодолены при использовании новых систем ERP, которые будут модульными и дадут возможность использования всемирной сети. Индивидуальные модули для управления транзакционными данными и моделирования анализов, часто совершенствованных третьим лицом (поставщиками), будут соединены в системах ERP, использующих промежуточное программное обеспечение, которое обеспечит стандартный интерфейс для модулей. Быстрый рост в электронной торговле увеличивает дефицит систем ERP. Ожидается, что подстегивающий Интернетом реинжиниринг потребует интеграции бизнес процессов в пределах компании. Модули гибких систем ERP будут обязательной частью для установления информационных систем внутри предприятия для цепочек поставок, состоящих из нескольких компаний различных размеров и уровней развития. Кроме того, так как электронная торговля еще очень молода, Интернет компании будут нуждаться в модифицировании их систем ERP с появлением новых условий.

Task 5. Compare equivalents underlined on both sides of the broadside. Try to memorize them

Task 6. Insert a required word or phrase in the blanks. Consult the dictionary if need be

1. centralized database

2. e-commerce

3. employ software

4. facilitate

5. Guidelines

6. human resources

7. middleware

8. rigid requirements on data and processes

9. SKUs

10. transactional data

11. vendors

1. An ERP system includes software and hardware that ______________________the flow of ________________________in a company relating to manufacturing, logistics, finance, sales, and_____________________.

2. All business applications of the company are integrated in a uniform system environment that accesses a ____________________residing on a common platform.

3. In addition to improving human data collection and communication processes, reengineering should, but does not always, include cleansing and tightening of data definitions; for example, a reduction in the number of _______________to those that are truly distinct.

4. Numerous articles have appeared in magazines and journals offering ___________________for avoiding the worst headaches.

5. The ERP system imposes ____________________________________________ that often inhibit the way the company can operate its business.

6. Inability to _______________________from multiple vendors means that the company cannot integrate modules, including modeling systems, from multiple vendors with the monolithic ERP system acquired from the primary vendor.

7. The company cannot easily integrate supply chain databases with ____________ and customers, especially those who are too small to afford a massive ERP implementation.

8. Individual modules for transactional data management and modeling analysis, often developed by third-party vendors, will be bolted onto ERP systems using________________________, which provides standard interfaces for the modules.

9. Because ______________________________ is so new, Internet companies will need the capability to modify their ERP systems as new conditions emerge.

Task 7. Checking up: read the text first in English then- its translation pattern to be ready for oral and written test-translation

Task 8. Test – translation. Translate the passage from English into Russian: orally -10 min. trying to find appropriate Russian equivalents; in written form- 30 min. Compare your translation with the given sample

An ERP system includes software and hardware that facilitate the flow of transactional data in a company relating to manufacturing, logistics, finance, sales, and human resources. In principle, all business applications of the company are integrated in a uniform system environment that accesses a centralized database residing on a common platform. Common and compatible data fields and formats are used across the entire enterprise. Moreover, data are entered once and only once, ensuring that all applications make consistent use of these data.

Implementing ERP systems has proven unexpectedly difficult in many companies. Numerous articles have appeared in magazines and journals offering guidelines for avoiding the worst headaches. Even when an implementation project is well managed, the result can be disappointing due to inherent limitations of current ERP systems. These include the following:

• Imposed conformity

• Inability to employ software from multiple vendors

• Incompatibility of ERP systems across the supply chain

Current thinking is that these problems will be overcome by new ERP systems that are modular and Web enabled. The expectation is that Internet-driven reengineering will require integrating business processes across corporate boundaries. Modular, flexible ERP systems will be essential for implementing interenterprise information systems for supply chains made up of several companies of varying sizes and cultures.

Task 9. Discussion

1. What is ERP system?

2. Why can the results of IT implementation be disappointing?

3. Why does the rapid growth in e-commerce magnify deficiencies of ERP systems?

4. Why is there a point of view that ERP new systems is the remedy for all supply chain “diseases”?

5. What are the advantages of new ERP systems?

Task 10. Brief summary of the text (in English)

TEXT 3. E-COMMERCE. BUSINESS-TO-CONSUMER

Task 1: Scan through the text to grasp its general idea (2 min)

Communication over the Internet is characterized by easy accessibility, low-cost usage, and speed. These features are the result of astonishing developments in recent years in computer networks, processing speed, data storage capabilities, software, display technology, and user interfaces. The linking of people and companies due to e-commerce has opened up exciting new marketing opportunities as well as new processes for improving supply chain management.

Business-to-consumer e-commerce is a new method of retailing that puts the consumer in direct contact with a grocery, clothing, or PC company offering products. These Internet companies face a host of new marketing and sales challenges including the following:

• Devising graphics to attractively display physical products on the Web site

• Pricing products to gain market share, reflect supply chain costs, or some other criteria that change radically with evolving markets

• Extrapolating sales patterns from initial markets to new markets

• Identifying demographics of Web site customers

• Devising acceptable and sustainable customer service criteria

• Devising strategies to retain customers

• Selecting the number and range of products to offer that the Web site and the supply chain can support

• Connecting Web site sales to physical inventory

• Providing security for payment by credit cards

Innovations of business-to-customer Internet companies occur largely on the demand side of their businesses, although changes to conventional thinking are also needed for supply chain management.

Despite the excitement of business-to-customer Internet companies, their sales are still only a small percentage of total retail sales. Moreover, they are not projected to make serious inroads in the near future in most industries.

The logistics of business-to-customer Internet companies is driven by the classic order fulfillment principle: deliver the correct product to the correct location at the correct time for a competitive price. These companies have only just begun to realize the full importance of this principle and how difficult it is to effectively link their Web-based marketing and sales activities to their order fulfillment activities. In simple terms, an Internet company has two choices. It can build its own warehouses and manage its own distribution systems or it can hire third-party logistics companies to handle distribution for it.

Either option can prove costly. Supply chain management of business-to-consumer Internet companies is subject to serious economies of scale in paybacks from investments in warehouses, inventories, and integrated data management and modeling systems. Due to high and increasing customer service expectations, these economies of scale may be even more pronounced than those experienced by traditional retailers. It suggests that we may soon see a serious reduction in the number of Internet companies as mergers and acquisitions allow companies to achieve volumes that justify capital investment in brick and mortar and integrated systems.

Task 2. After scanning the text answer the question: what is the text about?

Task 3. Read the text attentively paying attention to the underlying idea

Task 4. Read the text again and compare it with the translation on the opposite side of the broadside

Communication over the Internet is characterized by easy accessibility, low-cost usage, and speed. These features are the result of astonishing developments in recent years in computer networks, processing speed, data storage capabilities, software, display technology, and user interfaces. The linking of people and companies due to e-commerce has opened up exciting new marketing opportunities as well as new processes for improving supply chain management. Business-to-consumer e-commerce is a new method of retailing that puts the consumer in direct contact with a grocery, clothing, or PC company offering products. These Internet companies face a host of new marketing and sales challenges including the following: • Devising graphics to attractively display physical products on the Web site • Pricing products to gain market share, reflect supply chain costs, or some other criteria that change radically with evolving markets • Extrapolating sales patterns from initial markets to new markets • Identifying demographics of Web site customers • Devising acceptable and sustainable customer service criteria • Devising strategies to retain customers • Selecting the number and range of products to offer that the Web site and the supply chain can support • Connecting Web site sales to physical inventory • Providing security for payment by credit cards Innovations of business-to-customer Internet companies occur largely on the demand side of their businesses, although changes to conventional thinking are also needed for supply chain management. Despite the excitement of business-to-customer Internet companies, their sales are still only a small percentage of total retail sales. Moreover, they are not projected to make serious inroads in the near future in most industries. The logistics of business-to-customer Internet companies is driven by the classic order fulfillment principle: deliver the correct product to the correct location at the correct time for a competitive price. These companies have only just begun to realize the full importance of this principle and how difficult it is to effectively link their Web-based marketing and sales activities to their order fulfillment activities. In simple terms, an Internet company has two choices. It can build its own warehouses and manage its own distribution systems or it can hire third-party logistics companies to handle distribution for it. Either option can prove costly. Supply chain management of business-to-consumer Internet companies is subject to serious economies of scale in paybacks from investments in warehouses, inventories, and integrated data management and modeling systems. Due to high and increasing customer service expectations, these economies of scale may be even more pronounced than those experienced by traditional retailers. It suggests that we may soon see a serious reduction in the number of Internet companies as mergers and acquisitions allow companies to achieve volumes that justify capital investment in brick and mortar and integrated systems.

Передача информации через Интернет характеризуется общедоступностью, низкой ценой использования и скоростью. Эти черты – результат удивительного развития за последние годы компьютерных сетей, улучшения скорости, способностей сохранения данных, программного обеспечения, техники отображения информации и интерфейсов. Объединение людей и компаний посредством электронной коммерции открывает новые рыночные возможности, а также новые процессы улучшения управления цепочкой поставок. Электронная торговля по принципу «Бизнес – Потребитель» – это новый метод розничной торговли, которая позволяет напрямую связаться с магазинами, предлагающими свои продукты, такие как бакалея, одежда или персональные компьютеры. Эти Интернет компании сталкиваются с множеством новых трудностей в области маркетинга и продаж, включая следующие: - создание привлекательных веб – сайтов для демонстрации продукта; - установление цены таким образом, чтобы завоевать долю рынка, покрыть затраты цепи поставок или с учетом других критериев, которые радикально меняются с эволюцией рынка, - экстраполяция структур сбыта с первоначальных рынков на новые, - определение демографических данных потребителей веб – сайта, - разработка приемлемых и рациональных критериев обслуживания покупателей, - разработка стратегии удержания потребителей, - выбор ассортимента продукции для обеспечения через веб - сайт, - объединение данных о продажах веб - сайта и физических запасах, - обеспечение безопасности платежей посредством кредитных карт. Инновации в Интернет компаниях, работающих по принципу «бизнес–потребитель», в основном касаются спроса, хотя для управления цепочкой поставок необходимо изменение общепринятого мнения. Несмотря на воодушевление Интернет компаний, работающих по принципу «бизнес – потребитель», их продажи составляют малый процент от общего объема розничных продаж. Кроме того, они не планируют осуществлять вторжения в большинство отраслей в ближайшем будущем. Логистика Интернет компаний, работающих по принципу «бизнес – потребитель», заимствована из классического принципа исполнения заказа: доставляй то, что нужно, туда, куда нужно, в нужное время и по конкурентоспособной цене. Эти компании только сейчас начали осознавать всю важность этого принципа и то, как тяжело эффективно соединить торговлю через Интернет с продажами и исполнением заказов. Проще говоря, у Интернет компании есть два пути. Она может построить свой собственный склад и управлять своей собственной системой распределения или может нанять третье лицо, логистическую компанию, для управления ее распределением. Каждый вариант может оказаться дорогим. Управление цепями поставок в Интернет компании, работающей по принципу «бизнес – потребитель», основано на серьезном положительном эффекте масштаба при подсчете окупаемости инвестиций, вложенных в склады, запасы, моделирующие системы и интегрированное управление данными. Из-за высоких и возрастающих ожиданий в сфере потребительского сервиса, положительный эффект масштаба может быть еще более осуществим, чем в тех системах, которые используются традиционной розничной торговлей. Предполагается, что мы вскоре сможем увидеть сокращение ряда Интернет компаний из-за слияний и объединений, которые позволят компаниям достигнуть объемов, которые оправдают капитальные вложения в основание компаний, обслуживающих своих клиентов в офисах, и в интегрированные системы.

Task 5. Compare equivalents underlined on both sides of the broadside. Try to memorize them

Task 6. Insert a required word or phrase in the blanks. Consult the dictionary if need be

1. accessibility

2. challenges

3. competitive price

4. conventional thinking

5. customer service

6. distribution systems

7. economies of scale

8. gain market share

9. marketing opportunities

10. order fulfillment

11. paybacks

12. payment by credit cards

13. retailing

14. retain customers

15. sales patterns

16. warehouses

1. Communication over the Internet is characterized by easy_______________________, low-cost usage, and speed.

2. The linking of people and companies due to e-commerce has opened up exciting new ______________________as well as new processes for improving supply chain management.

3. Business-to-consumer e-commerce is a new method of ____________________that puts the consumer in direct contact with a grocery, clothing, or PC company offering products.

4. These Internet companies face a host of new marketing and sales _____________.

5. The problems Internet companies face are: pricing products to_____________________, extrapolating ______________________from initial markets to new markets, devising acceptable and sustainable _________________criteria, devising strategies to _______________________, providing security for ______________________________.

6. Innovations of business-to-customer Internet companies occur largely on the demand side of their businesses, although changes to ___________________are also needed for supply chain management.

7. The logistics of business-to-customer Internet companies is driven by the classic ________________________principle: deliver the correct product to the correct location at the correct time for a___________________________________.

8. The company can build its own ____________________and manage its own ____________________________or it can hire third-party logistics companies to handle distribution for it.

9. Supply chain management of business-to-consumer Internet companies is subject to serious ___________________________in ________________________from investments in warehouses, inventories, and integrated data management and modeling systems.

Task 7. Checking up: read the text first in English then- its translation pattern to be ready for oral and written test-translation

Task 8. Test – translation. Translate the passage from English into Russian: orally -10 min. trying to find appropriate Russian equivalents; in written form- 30 min. Compare your translation with the given sample

Communication over the Internet is characterized by easy accessibility, low-cost usage, and speed. These features are the result of astonishing developments in recent years in computer networks, processing speed, data storage capabilities, software, display technology, and user interfaces. The linking of people and companies due to e-commerce has opened up exciting new marketing opportunities as well as new processes for improving supply chain management.

Business-to-consumer e-commerce is a new method of retailing that puts the consumer in direct contact with a grocery, clothing, or PC company offering products.

Innovations of business-to-customer Internet companies occur largely on the demand side of their businesses, although changes to conventional thinking are also needed for supply chain management.

The logistics of business-to-customer Internet companies is driven by the classic order fulfillment principle: deliver the correct product to the correct location at the correct time for a competitive price. These companies have only just begun to realize the full importance of this principle and how difficult it is to effectively link their Web-based marketing and sales activities to their order fulfillment activities. In simple terms, an Internet company has two choices. It can build its own warehouses and manage its own distribution systems or it can hire third-party logistics companies to handle distribution for it. Either option can prove costly.

Task 9. Discussion

1. What is business –to- business e-commerce system?

2. What is the impact of business-to business e-commerce on supply chain management?

3.What are order fulfillment principles Internet companies base on ?

Task 10. Brief summary of the text (in English)

TEXT 4. E-COMMERCE. BUSINESS-TO-BUSINESS

Task 1: Scan through the text to grasp its general idea (2 min)

Business-to-business communication over the Internet is also expanding rapidly.

Although investors are enthralled with the promise of business-to-consumer e-commerce, the potential impact of business-to-business e-commerce on supply chain management is much larger. In principle, business-to-business systems can provide effective interenterprise communication of data and plans for manufacturing and distribution across virtual supply chains in many industries. This might allow companies to move work across corporate boundaries, reduce cycle times by direct interconnection, and develop collaborative forecasts. But many barriers must be overcome if the promise of virtual supply chains is to be realized.

First, multiple companies operating a virtual supply chain must have standardized definitions and meanings of data. A decision to shift production of a product from one company to a second in the virtual supply chain because the unit production cost is lower in the second company assumes that this cost is consistently defined and measured across the two companies. Moreover, systems must be in place for seamless integration of data. Such requirements are, of course, no different from those addressed and allegedly met by ERP systems. And ERP companies are currently active in developing modules and middleware that they believe will allow standardization and efficient communication to be achieved across virtual supply chains.

Second, virtual supply chains assume a level of intercompany coordination that is often not achieved today among business units of the same company. For example, we cannot presume that a manufacturer of consumer durables will be willing to share sensitive cost data with a major distributor of these products, especially when the manufacturer sells to other distributors and to its own stores. Another issue is how companies in a virtual supply chain will agree to split cost savings realized from improved business-to-business communication and supply chain management.

Third, faster communication of data does not automatically lead to better decision making. Competitive supply chain management cannot be achieved merely by rapid and myopic response to today's supply chain needs. Optimization modeling systems are required to unravel the complex interactions that make supply chain management difficult and important.

Task 2. After scanning the text answer the question: what is the text about?

Task 3. Read the text attentively paying attention to the underlying idea

Task 4. Read the text again and compare it with the translation on the opposite side of the broadside

Business-to-business communication over the Internet is also expanding rapidly. Although investors are enthralled with the promise of business-to-consumer e-commerce, the potential impact of business-to-business e-commerce on supply chain management is much larger. In principle, business-to-business systems can provide effective interenterprise communication of data and plans for manufacturing and distribution across virtual supply chains in many industries. This might allow companies to move work across corporate boundaries, reduce cycle times by direct interconnection, and develop collaborative forecasts. But many barriers must be overcome if the promise of virtual supply chains is to be realized. First, multiple companies operating a virtual supply chain must have standardized definitions and meanings of data. A decision to shift production of a product from one company to a second in the virtual supply chain because the unit production cost is lower in the second company assumes that this cost is consistently defined and measured across the two companies. Moreover, systems must be in place for seamless integration of data. Such requirements are, of course, no different from those addressed and allegedly met by ERP systems. And ERP companies are currently active in developing modules and middleware that they believe will allow standardization and efficient communication to be achieved across virtual supply chains. Second, virtual supply chains assume a level of intercompany coordination that is often not achieved today among business units of the same company. For example, we cannot presume that a manufacturer of consumer durables will be willing to share sensitive cost data with a major distributor of these products, especially when the manufacturer sells to other distributors and to its own stores. Another issue is how companies in a virtual supply chain will agree to split cost savings realized from improved business-to-business communication and supply chain management. Third, faster communication of data does not automatically lead to better decision making. Competitive supply chain management cannot be achieved merely by rapid and myopic response to today's supply chain needs. Optimization modeling systems are required to unravel the complex interactions that make supply chain management difficult and important.

Электронная торговля через Интернет по принципу «Бизнес – Бизнесу» также быстро развивается. Хотя инвесторы увлечены перспективами электронной торговли по принципу «бизнес – потребитель», потенциальное влияние торговли «бизнес-бизнес» на управление цепочкой поставок гораздо больше. В принципе, системы «бизнес – бизнес» могут обеспечить эффективную связь данных и планов по производству и распределению между предприятиями в виртуальных цепях поставок во многих сферах промышленности. Это может позволить компаниям перемещать работу внутри границ корпорации, сокращать время цикла посредством прямых взаимосвязей и развивать совместные прогнозы. Но для создания эффективной виртуальной цепочки поставок должны быть преодолены многие препятствия. Во-первых, многочисленные компании, управляющие виртуальными цепями поставок, должны иметь стандартные определения и значения данных. Решение перенести производство продукции из одной компании во вторую с более эффективной цепочкой поставок по причине того, что издержки производства единицы продукции ниже во второй компании, предполагает, что стоимость определена и оценена совместно двумя компаниями. Кроме того, системы должны иметь непрерывную интеграцию данных. Такие требования не отличаются от тех, которые адресованы и соответствуют ERP системам. ERP компании в настоящее время занимаются развитием модулей и промежуточного программного обеспечения, которое, по их мнению, позволит осуществить стандартизацию и будет достигнута эффективная связь в виртуальных цепях поставок. Во-вторых, виртуальные цепочки поставок предполагают наличие определенного уровня внутрифирменной координации, который часто не достигается между подразделениями одной компании. Например, мы не можем предполагать, что производитель потребительских товаров длительного пользования захочет разделить важные данные о затратах с основным дистрибьютором этих товаров, особенно когда производитель реализует свою продукцию через других дистрибьюторов и собственные магазины. Другой вопрос – как компании в виртуальной цепочке поставок согласятся разделить сэкономленные деньги от улучшенной торговли по принципу «бизнес – бизнес» и управления системой поставок. В-третьих, более быстрая связь данных автоматически не ведет к лучшему принятию решений. Конкурентоспособное управление цепочкой поставок не может быть достигнуто лишь быстрой и недальновидной реакцией на нужды современной цепи поставок. Необходимы оптимизационные системы моделирования для выявления сложных взаимосвязей, которые делают управление цепями поставок трудной и важной задачей.

Task 5. Compare equivalents underlined on both sides of the broadside. Try to memorize them

Task 6. Insert a required word or phrase in the blanks. Consult the dictionary if need be

1. business units

2. collaborative forecasts

3. consumer durables

4. efficient communication

5. intercompany coordination

6. optimization modeling systems

7. reduce cycle times

8. shift production

9. unit production cost

10. unravel the complex interactions

11. virtual supply chains

1. Business-to-business systems can provide effective interenterprise communication of data and plans for manufacturing and distribution across _______________________________________in many industries.

2. B2B systems allow companies to move work across corporate boundaries, ___________________by direct interconnection, and develop______________________________.

3. A decision to __________________________of a product from one company to a second in the virtual supply chain because the ____________________________is lower in the second company assumes that this cost is consistently defined and measured across the two companies.

4. ERP companies are currently active in developing modules and middleware that they believe will allow standardization and ________________________to be achieved across virtual supply chains.

5. Virtual supply chains assume a level of __________________________that is often not achieved today among _______________________of the same company.

6. We cannot presume that a manufacturer of __________________will be willing to share sensitive cost data with a major distributor of these products, especially when the manufacturer sells to other distributors and to its own stores.

7. _______________________________are required to __________________________that make supply chain management difficult and important.

Task 7. Checking up: read the text first in English then- its translation pattern to be ready for oral and written test-translation

Task 8. Test – translation. Translate the passage from English into Russian: orally -10 min. trying to find appropriate Russian equivalents; in written form- 30 min. Compare your translation with the given sample

Business-to-business communication over the Internet is expanding rapidly.

Although investors are enthralled with the promise of business-to-consumer e-commerce, the potential impact of business-to-business e-commerce on supply chain management is much larger. In principle, business-to-business systems can provide effective interenterprise communication of data and plans for manufacturing and distribution across virtual supply chains in many industries. This might allow companies to move work across corporate boundaries, reduce cycle times by direct interconnection, and develop collaborative forecasts. But many barriers must be overcome if the promise of virtual supply chains is to be realized.

First, multiple companies operating a virtual supply chain must have standardized definitions and meanings of data. Such requirements are, of course, no different from those addressed and allegedly met by ERP systems. And ERP companies are currently active in developing modules and middleware that they believe will allow standardization and efficient communication to be achieved across virtual supply chains.

Second, virtual supply chains assume a level of intercompany coordination that is often not achieved today among business units of the same company.

Third, faster communication of data does not automatically lead to better decision making. Competitive supply chain management cannot be achieved merely by rapid and myopic response to today's supply chain needs. Optimization modeling systems are required to unravel the complex interactions that make supply chain management difficult and important.

Task 9. Discussion

1. What do you know about e-commerce?

2. How can you account for internet main features: accessibility, low-cost usage and speed?

3. What are new marketing and sales challenges that internet companies face?

Task 10. Brief summary of the text (in English)

TEXT 5. PROCUREMENTS OVER THE INTERNET, SPOT MARKETS, AND AUCTIONS

Task 1: Scan through the text to grasp its general idea (2 min)

A variety of electronic markets have emerged over the past 10 years where commodities, collectibles, and other products are bought and sold. This development has been called Internet-based procurement (IBP). It is concerned with direct procurement of specific parts and components needed for production by buyers and indirect procurement of commodities and products not customized for production such as generic parts, office supplies, maintenance, and so on. Electronic procurement is developing along the following three dimensions:

• Seller-side sites. Suppliers place their catalogs and spec sheets on their Web sites. The functionality of the sites may be expanded to include search capabilities and electronic commerce functionality such as credit card sales.

• Buyer-side sites. Buyers have installed software, which is available from software providers, allowing them to read and standardize vendor catalogs. The software also allows the creation, routing, approval, and submission of orders.

• Third-party sites. These are neutral sites that serve as marketplaces where buyers and sellers can link up. They provide catalog information from several sellers and usually capabilities supporting direct sales between the buyer and the seller. These sites are usually specific to certain industries such as specialty chemicals or pharmaceuticals.

Most of the transactions performed on these sites are indirect procurements of commodity products. Market researchers have found that Internet purchasing has led to improved corporate wide purchasing strategies, lower transaction costs, and improved productivity among buyers.

Direct procurement over the Internet by manufacturing firms can be more complicated because the required parts and components may require some customization. Moreover, factors beyond cost, such as quality, on-time delivery, and supplier flexibility, may be very important. Richer, more flexible software solutions are needed, but they require customization and can be very expensive. For this reason, some industries are seeking to establish common standards for their suppliers. For example, a trade association in the automotive industry commissioned the implementation of a standards-based network, the Automotive Network eXchange (ANX). Recently, Ford and General Motors announced that their suppliers will soon be required to be connected to and use this network. The expectation is that communication over ANX with suppliers in the second, third, and fourth tiers will take hours rather than the weeks it takes using the current hodgepodge of systems.

A related development is electronic markets where buyers and sellers participate in auctions of goods and services. The intention of these auctions is to enhance economic efficiency through aggregation and matching. Aggregation refers to the assembly of very large numbers of buyers and sellers. Matching refers to dynamic processes whereby buyers are able to link up with sellers offering products that best match their needs. These developments suggest the possible emergence of spot markets for industrial products and services, including contract manufacturing and shipping, that will seriously affect supply chain strategies in many industries.

Task 2. After scanning the text answer the question: what is the text about?

Task 3. Read the text attentively paying attention to the underlying idea

Task 4. Read the text again and compare it with the translation on the opposite side of the broadside

A variety of electronic markets have emerged over the past 10 years where commodities, collectibles, and other products are bought and sold. This development has been called Internet-based procurement (IBP). It is concerned with direct procurement of specific parts and components needed for production by buyers and indirect procurement of commodities and products not customized for production such as generic parts, office supplies, maintenance, and so on. Electronic procurement is developing along the following three dimensions: • Seller-side sites. Suppliers place their catalogs and spec sheets on their Web sites. The functionality of the sites may be expanded to include search capabilities and electronic commerce functionality such as credit card sales. • Buyer-side sites. Buyers have installed software, which is available from software providers, allowing them to read and standardize vendor catalogs. The software also allows the creation, routing, approval, and submission of orders. • Third-party sites. These are neutral sites that serve as marketplaces where buyers and sellers can link up. They provide catalog information from several sellers and usually capabilities supporting direct sales between the buyer and the seller. These sites are usually specific to certain industries such as specialty chemicals or pharmaceuticals. Most of the transactions performed on these sites are indirect procurements of commodity products. Market researchers have found that Internet purchasing has led to improved corporate wide purchasing strategies, lower transaction costs, and improved productivity among buyers. Direct procurement over the Internet by manufacturing firms can be more complicated because the required parts and components may require some customization. Moreover, factors beyond cost, such as quality, on-time delivery, and supplier flexibility, may be very important. Richer, more flexible software solutions are needed, but they require customization and can be very expensive. For this reason, some industries are seeking to establish common standards for their suppliers. For example, a trade association in the automotive industry commissioned the implementation of a standards-based network, the Automotive Network eXchange (ANX). Recently, Ford and General Motors announced that their suppliers will soon be required to be connected to and use this network. The expectation is that communication over ANX with suppliers in the second, third, and fourth tiers will take hours rather than the weeks it takes using the current hodgepodge of systems. A related development is electronic markets where buyers and sellers participate in auctions of goods and services. The intention of these auctions is to enhance economic efficiency through aggregation and matching. Aggregation refers to the assembly of very large numbers of buyers and sellers. Matching refers to dynamic processes whereby buyers are able to link up with sellers offering products that best match their needs. These developments suggest the possible emergence of spot markets for industrial products and services, including contract manufacturing and shipping, that will seriously affect supply chain strategies in many industries.

За последние десять лет появилось большое разнообразие электронных рынков, где продаются и покупаются товары широкого потребления, предметы коллекционирования и другая продукция. Снабжение посредством электронных рынков получило название Интернет-закупками. Под ними подразумеваются прямые закупки специальных частей и комплектующих, необходимых для производства и непрямыми (косвенными) закупками товаров и продуктов не для нужд производства, таких как универсальные детали, офисные поставки, обслуживание и т.д. Электронные закупки развиваются вместе со следующими аспектами: Сайты поставщиков. Поставщики помещают свои каталоги и спецификации на своих веб - сайтах. Функции сайтов могут быть расширены и могут включать поисковые возможности, а также функцию электронной торговли, такую как продажи по кредитным картам. Сайты покупателей. Покупатели устанавливают программное обеспечение, которое имеется в распоряжении у поставщиков программного обеспечения, позволяющее им читать и стандартизировать каталоги поставщиков. Программное обеспечение также позволяет создавать, сортировать, утверждать и рассматривать заказы. Сайты посредников. Это нейтральные сайты, которые обслуживают рынки, где покупатели и продавцы могут найти друг друга. Они обеспечивают информацию в каталоге от нескольких продавцов и обычно создают возможности поддерживать прямые продажи между покупателями и продавцами. Такие сайты обычно имеют отношение к определенной отрасли, например, производство химической и фармакологической продукции. Большинство сделок, осуществляющихся на этих сайтах – это непрямые (косвенные) приобретения товаров. Рыночные исследователи находят, что Интернет покупки ведут к совершенствованию закупочных стратегий в корпорации, снижают операционные издержки и улучшают продуктивность среди покупателей. Прямые закупки через Интернет фирмами-производителями могут быть более осложнены, потому что требуемые части и компоненты могут требовать кастомизации, т.е. приспособления товара к конкретным требованиям клиентов. Кроме того, в отличие от затрат такие факторы, как качество, своевременная доставка и гибкость поставщика могут быть очень важными. Требуются более гибкие и глубокие решения в программном обеспечении, но они требуют выполнения по индивидуальному заказу и могут быть очень дорогостоящими. Для этой цели некоторые отрасли стараются установить общие стандарты с поставщиками. Например, торговая ассоциация в автомобильной отрасли сделала заказ на внедрение стандартной сети – Automotive Network Exchange (ANX). В последнее время, компании Ford и General Motors объявили, что их поставщики будут использовать эту сеть. Ожидается, что связь через ANX с поставщиками на втором, третьем и четвертом уровнях займет часы, а не недели, как при использовании нынешних смешанных систем. Подобное развитие получили электронные рынки, где покупатели и продавцы участвуют в аукционах товаров и услуг. Намерения этих аукционов состоят в повышении рентабельности посредством объединения и соответствия. Объединение – сбор большого количества покупателей и продавцов. Соответствие – динамический процесс, где покупатели могут связаться с продавцами, предлагающими продукты, которые им необходимы. Распространение аукционов предполагает возможные возникновения спот-рынков для промышленных товаров и услуг (рынки немедленной поставки и платежа (в противоположность срочному рынку)), включающих обусловленное контрактом производство и транспортировку, что серьезно повлияет на стратегии цепочек поставок во многих отраслях.

Task 5. Compare equivalents underlined on both sides of the broadside. Try to memorize them

Task 6. Insert a required word or phrase in the blanks. Consult the dictionary if need be

1. auctions of goods and services

2. commodities

3. credit card sales

4. customization

5. direct procurement

6. direct sales

7. electronic markets

8. electronic procurement

9. enhance economic efficiency

10. indirect procurement

11. on-time delivery

12. purchasing strategies

13. search capabilities

14. spec sheets

15. supplier flexibility

16. transactions

17. vendor catalogs

1. A variety of ________________have emerged over the past 10 years where____________________, collectibles, and other products are bought and sold.

2. Internet-based procurement is concerned with ______________________of specific parts and components needed for production by buyers and _____________________________ of commodities and products not customized for production.

3. _________________________is developing along the three dimensions: seller-side sites, buyer-side sites, third-party sites.

4. Suppliers place their catalogs and _____________________on their Web sites.

5. The functionality of the sites may be expanded to include ________________and electronic commerce functionality such as____________________________.

6. Buyers have installed software, which is available from software providers, allowing them to read and standardize____________________________.

7. Third-party sites provide catalog information from several sellers and usually capabilities supporting __________________between the buyer and the seller.

8. Most of the _____________________performed on the sites are indirect procurements of commodity products.

9. Market researchers have found that Internet purchasing has led to improved corporate wide____________________, lower transaction costs, and improved productivity among buyers.

10. Direct procurement over the Internet by manufacturing firms can be more complicated because the required parts and components may require some______________________________.

11. Factors beyond cost, such as quality, ____________________, and____________________________, may be very important.

12. Buyers and sellers participate in _____________________________________at electronic markets.

13. The intention of the auctions is to _____________________________through aggregation and matching.

Task 7. Checking up: read the text first in English then- its translation pattern to be ready for oral and written test-translation

Task 8. Test – translation. Translate the passage from English into Russian: orally -10 min. trying to find appropriate Russian equivalents; in written form- 30 min. Compare your translation with the given sample

A variety of electronic markets have emerged over the past 10 years where commodities, collectibles, and other products are bought and sold. This development has been called Internet-based procurement (IBP). It is concerned with direct procurement of specific parts and components needed for production by buyers and indirect procurement of commodities and products not customized for production such as generic parts, office supplies, maintenance, and so on. Electronic procurement is developing along the following three dimensions:

• Seller-side sites. Suppliers place their catalogs and spec sheets on their Web sites. The functionality of the sites may be expanded to include search capabilities and electronic commerce functionality such as credit card sales.

• Buyer-side sites. Buyers have installed software, which is available from software providers, allowing them to read and standardize vendor catalogs. The software also allows the creation, routing, approval, and submission of orders.

• Third-party sites. These are neutral sites that serve as marketplaces where buyers and sellers can link up. They provide catalog information from several sellers and usually capabilities supporting direct sales between the buyer and the seller. These sites are usually specific to certain industries such as specialty chemicals or pharmaceuticals.

Most of the transactions performed on these sites are indirect procurements of commodity products.

Task 9. Discussion

1. What is Internet-based procurement?

2. What are three dimensions along which electronic procurement is developing?

3. What are spot markets and what do they seriously affect?

Task 10. Brief summary of the text (in English)

TEXT 6. FINANCIAL PLANNING ISSUES FACING THE MULTINATIONAL CORPORATION

Task 1: Scan through the text to grasp its general idea (2 min)

A multinational corporation (MNC) faces a host of complex planning issues when it seeks to optimize medium-and long-term financial performance. Although the fundamental goal may be to maximize the sum of after-tax profits repatriated to the parent corporation over a suitably long-term planning horizon, the MNC must at the same time consider important secondary goals, which recognize a range of costs and constraints associ­ated with cash flow and profits that are realized abroad by subsidiary companies. These may include the financial performance of such partially or wholly owned for­eign subsidiaries as well as alternative goals for the MNC corporation itself on per­formance measures such as total tax expense, return on assets, and total repatriated income.

Constraints associated with cash repatriation are derived from legal and finan­cial conditions extant in the countries where the MNC does business, and the tax laws in the home country of the parent. For MNCs based in the United States, the company's foreign tax credit position with the U.S. Internal Revenue Service is an important factor in optimizing multinational financial flows. Decisions regarding the source, timing, and amount of subsidiary earnings distributions, or other finan­cial flows to the parent, often play a key role in generating or absorbing such cred­its. Strategies regarding product prices, transfer prices, license fees, royalties, and other interaffiliate flows may be employed to optimize the consolidated results of the MNC, taking into account the impact of local restrictions, incentives, or other conditions.

A MNC also faces a wider and deeper range of risks than a national corporation, Government regulations and tax laws may be subject to frequent and abrupt changes in some countries where the MNC has subsidiaries and affiliates. To protect itself against such risks, the MNC may impose operating restrictions intended to reduce exposure, such as right limits on cash or equity earnings retained in foreign entities. In addition, changes in exchange rates may seriously affect the relative attractiveness of a country as a manufacturing site or as a market.

Task 2. After scanning the text answer the question: what is the text about?

Task 3. Read the text attentively paying attention to the underlying idea

Task 4. Read the text again and compare it with the translation on the opposite side of the broadside

A multinational corporation (MNC) faces a host of complex planning issues when it seeks to optimize medium-and long-term financial performance. Although the fundamental goal may be to maximize the sum of after-tax profits repatriated to the parent corporation over a suitably long-term planning horizon, the MNC must at the same time consider important secondary goals, which recognize a range of costs and constraints associ­ated with cash flow and profits that are realized abroad by subsidiary companies. These may include the financial performance of such partially or wholly owned for­eign subsidiaries as well as alternative goals for the MNC corporation itself on per­formance measures such as total tax expense, return on assets, and total repatriated income. Constraints associated with cash repatriation are derived from legal and finan­cial conditions extant in the countries where the MNC does business, and the tax laws in the home country of the parent. For MNCs based in the United States, the company's foreign tax credit position with the U.S. Internal Revenue Service is an important factor in optimizing multinational financial flows. Decisions regarding the source, timing, and amount of subsidiary earnings distributions, or other finan­cial flows to the parent, often play a key role in generating or absorbing such credits. Strategies regarding product prices, transfer prices, license fees, royalties, and other interaffiliate flows may be employed to optimize the consolidated results of the MNC, taking into account the impact of local restrictions, incentives, or other conditions. A MNC also faces a wider and deeper range of risks than a national corporation. Government regulations and tax laws may be subject to frequent and abrupt changes in some countries where the MNC has subsidiaries and affiliates. To protect itself against such risks, the MNC may impose operating restrictions intended to reduce exposure, such as right limits on cash or equity earnings retained in foreign entities. In addition, changes in exchange rates may seriously affect the relative attractiveness of a country as a manufacturing site or as a market.

Когда многонациональная корпорация (МНК) стремится оптимизировать средне- и долгосрочную финансовую деятельность, она сталкивается с основным комплексом задач планирования. Хотя, возможно, основная цель – это максимизировать сумму чистой прибыли, репатриированной в материнскую компанию через долгосрочный период планирования, МНК в то же время должна рассматривать второстепенные цели, которые определяют ряд издержек и ограничений, связанных с потоком денег и прибыли, которая получена заграницей ее филиалами. Они могут включать финансовую деятельность иностранных филиалов, находящихся в частичной или полной собственности материнской компании, а так же альтернативные цели непосредственно для МНК в области таких показателей, как общие затраты на уплату налогов, рентабельность активов, репатриация общей прибыли. Ограничения, связанные с репатриацией денег, устанавливаются на основе правовых и финансовых условий, существующих в странах, где МНК ведет свой бизнес, и на основе налоговых законов в стране, где находится материнская компания. Для МНК, основанных в США, положение иностранного налогового кредита в Налоговом управлении США является важным фактором в оптимизации многонациональных финансовых потоков. Решения относительно источника, выбора времени и количества распределений доходов филиалов или других финансовых потоков в материнскую компанию, часто играют ключевую роль в открытии и погашении кредитов. Стратегии установления цен на товар, трансфертных цен, платы за лицензию, роялти и других межфилиальных потоков, могут быть использованы для того, чтобы оптимизировать общие результаты МНК, учитывая воздействие местных ограничений, мотивов и других условий. МНК также сталкивается с более высоким риском, чем национальная корпорация. Правительственное регулирование и налоговые законы могут быть причиной частых и резких перемен в некоторых странах, где у МНК есть филиалы и дочерние компании. Чтобы защитить себя от таких рисков, МНК может наложить действенные ограничительные меры, предназначенные для того, чтобы уменьшить уровень подвергания так называемым строгим лимитам на наличность и доход от обыкновенных акций, аккумулированных в иностранном имуществе. К тому же изменения в валютных курсах могут серьезно повлиять на относительную привлекательность страны, ее производственный сектор или рынок.

Task 5. Compare equivalents underlined on both sides of the broadside. Try to memorize them

Task 6. Insert a required word or phrase in the blanks. Consult the dictionary if need be

1. after-tax profits

2. cash flow

3. equity earnings

4. exchange rates

5. fundamental goal

6. interaffiliate flows

7. local restrictions

8. multinational corporation

9. multinational financial flows

10. parent corporation

11. planning issues

12. secondary goals

13. subsidiary companies

14. subsidiary earnings distributions

15. tax laws

16. transfer prices

1. A _________________________ faces a host of complex _______________________when it seeks to optimize medium-and long-term financial performance.

2. Although the _____________________may be to maximize the sum of ___________________________repatriated to the ________________________over a suitably long-term planning horizon, the MNC must at the same time consider important_______________________, which recognize a range of costs and constraints associ­ated with _____________and profits that are realized abroad by____________________.

3. Constraints associated with cash repatriation are derived from legal and finan­cial conditions extant in the countries where the MNC does business, and the _______________________in the home country of the parent.

4. For MNCs based in the United States, the company's foreign tax credit position with the U.S. Internal Revenue Service is an important factor in optimizing________________________________.

5. Decisions regarding the source, timing, and amount of____________________________, or other finan­cial flows to the parent, often play a key role in generating or absorbing such cred­its.

6. Strategies regarding product prices, ________________________, license fees, royalties, and other ________________________may be employed to optimize the consolidated results of the MNC, taking into account the impact of_____________________________, incentives, or other conditions.

7. To protect itself against risks, the MNC may impose operating restrictions intended to reduce exposure, such as right limits on cash or _____________________retained in foreign entities.

8. Changes in _____________________may seriously affect the relative attractiveness of a country as a manufacturing site or as a market.

Task 7. Checking up: read the text first in English then- its translation pattern to be ready for oral and written test-translation

Task 8. Test – translation. Translate the passage from English into Russian: orally -10 min. trying to find appropriate Russian equivalents; in written form- 30 min. Compare your translation with the given sample

A multinational corporation (MNC) faces a host of complex planning issues when it seeks to optimize medium-and long-term financial performance. Although the fundamental goal may be to maximize the sum of after-tax profits repatriated to the parent corporation over a suitably long-term planning horizon, the MNC must at the same time consider important secondary goals, which recognize a range of costs and constraints associated with cash flow and profits that are realized abroad by subsidiary companies. These may include the financial performance of such partially or wholly owned foreign subsidiaries as well as alternative goals for the MNC corporation itself on performance measures such as total tax expense, return on assets, and total repatriated income.

Constraints associated with cash repatriation are derived from legal and financial conditions extant in the countries where the MNC does business, and the tax laws in the home country of the parent. Decisions regarding the source, timing, and amount of subsidiary earnings distributions, or other finan­cial flows to the parent, often play a key role in generating or absorbing such cred­its. Strategies regarding product prices, transfer prices, license fees, royalties, and other interaffiliate flows may be employed to optimize the consolidated results of the MNC, taking into account the impact of local restrictions, incentives, or other conditions.

A MNC also faces a wider and deeper range of risks than a national corporation. Government regulations and tax laws may be subject to frequent and abrupt changes in some countries where the MNC has subsidiaries and affiliates.

Task 9. Discussion

1. What planning issues MNC face when they try to optimize financial performance?

2. How can MNC consolidated results be optimized?

3. How can MNC protect itself against some risks?

Task 10. Brief summary of the text (in English)

TEXT 7. OPTIMIZATION MODELS FOR MNC

Task 1: Scan through the text to grasp its general idea (2 min)

Optimization models can capture the financial planning constraints and opportunities mentioned above and link them to physical supply chain decisions. Their application to problems of this sort has been suggested for more than 25 years. Nevertheless, very few realistic model implementations have yet been made, in part because supply chain and financial data in subsidiaries around the world were not standardized for the purposes of global planning. With the recent implementation of enterprise resource planning systems and business-to-business Internet communications in many MNCs, the modeling approaches become possible and even desirable.

Of course, a MNC may face qualitative issues surrounding its business that are more difficult to capture in a supply chain model than those faced by a national cor­poration. The knowledge base and skill level of employees in different subsidiaries, as well as their costs, may vary significantly. Similarly, the MNC faces issues sur­rounding the promotion of organizational learning across its subsidiaries. When introducing a new product, for example, the MNC must select the countries in which to initially manufacture and sell the product and decide when and how the experience gleaned there will be disseminated throughout the corporation.

Nevertheless, effective supply chain models of large portions of a MNC's busi­ness, both financial and physical, can be implemented. The complications just cited require that the models and data used to generate them reflect managerial judgment about realistic options and constraints. Analysts using such models can expect to perform extensive scenario analyses to fully evaluate the impact of risk factors on the corporation's strategies.

Task 2. After scanning the text answer the question: what is the text about?

Task 3. Read the text attentively paying attention to the underlying idea

Task 4. Read the text again and compare it with the translation on the opposite side of the broadside

Optimization models can capture the financial planning constraints and opportunities mentioned above and link them to physical supply chain decisions. Their application to problems of this sort has been suggested for more than 25 years. Nevertheless, very few realistic model implementations have yet been made, in part because supply chain and financial data in subsidiaries around the world were not standardized for the purposes of global planning. With the recent implementation of enterprise resource planning systems and business-to-business Internet communications in many MNCs, the modeling approaches become possible and even desirable. Of course, a MNC may face qualitative issues surrounding its business that are more difficult to capture in a supply chain model than those faced by a national cor­poration. The knowledge base and skill level of employees in different subsidiaries, as well as their costs, may vary significantly. Similarly, the MNC faces issues sur­rounding the promotion of organizational learning across its subsidiaries. When introducing a new product, for example, the MNC must select the countries in which to initially manufacture and sell the product and decide when and how the experience gleaned there will be disseminated throughout the corporation. Nevertheless, effective supply chain models of large portions of a MNC's business, both financial and physical, can be implemented. The complications just cited require that the models and data used to generate them reflect managerial judgment about realistic options and constraints. Analysts using such models can expect to perform extensive scenario analyses to fully evaluate the impact of risk factors on the corporation's strategies.

Оптимизационные модели могут учитывать ограничения и возможности финансового планирования, перечисленные выше, и связывать их с решениями физических цепей поставок. Применение моделей для решения задач такого рода предлагается в течение более 25 лет. Однако лишь небольшое количество моделей уже воплотилось в жизнь, отчасти потому что цепи поставок и финансовые данные в филиалах по всему миру не были стандартизированы для целей глобального планирования. В связи с недавним внедрением систем планирования ресурсов предприятия и Интернет коммуникаций между деловыми партнерами, во многих МНК подходы к моделированию стали возможными и даже необходимыми. Конечно, МНК может столкнуться с качественными проблемами, окружающими корпоративный бизнес, которые сложнее отразить в модели цепи поставок, по сравнению с теми, с которыми сталкиваются национальные корпорации. База знаний и уровень мастерства работников в разных филиалах, а также их расходы могут значительно варьироваться. Подобно этому, МНК сталкивается с проблемами, связанными с укреплением организационных знаний по своим филиалам. Например, внедряя новый продукт, МНК должна выбрать, в каких странах изначально производить и продавать этот товар и решить, когда и как полученный там опыт распространится по всей корпорации. Тем не менее, сегодня могут применяться эффективные модели цепей поставок для широкого спектра видов деятельности МНК, причем, как финансовые модели, так и физические. Показанные выше сложности требуют того, чтобы модели и данные, используемые для их генерации, отражали управленческую оценку о реалистичных опциях и ограничениях. Аналитики, использующие такие модели, могут рассчитывать на то, чтобы выполнить обширные плановые исследования для того, чтобы дать полную оценку воздействию факторов риска на стратегии корпорации.

Task 5. Compare equivalents underlined on both sides of the broadside. Try to memorize them

Task 6. Insert a required word or phrase in the blanks. Consult the dictionary if need be

1. application

2. global planning

3. introducing a new product

4. managerial judgment

5. qualitative issues

6. skill level

1. Optimization models _______________________to problems of financial planning has been suggested for more than 25 years.

2. Very few realistic model implementations have yet been made, in part because supply chain and financial data in subsidiaries around the world were not standardized for the purposes of______________________________.

3. A MNC may face __________________________surrounding its business that are more difficult to capture in a supply chain model than those faced by a national cor­poration.

4. The knowledge base and ______________________of employees in different subsidiaries, as well as their costs, may vary significantly.

5. When_______________________, the MNC must select the countries in which to initially manufacture and sell the product and decide when and how the experience gleaned there will be disseminated throughout the corporation.

6. The complications require that the models and data used to generate effective supply chain models reflect ____________________________about realistic options and constraints.

Task 7. Checking up: read the text first in English then- its translation pattern to be ready for oral and written test-translation

Task 8. Test – translation. Translate the passage from English into Russian: orally -10 min. trying to find appropriate Russian equivalents; in written form- 30 min. Compare your translation with the given sample

Optimization models can capture the financial planning constraints and opportunities mentioned above and link them to physical supply chain decisions. Their application to problems of this sort has been suggested for more than 25 years. Nevertheless, very few realistic model implementations have yet been made, in part because supply chain and financial data in subsidiaries around the world were not standardized for the purposes of global planning. With the recent implementation of enterprise resource planning systems and business-to-business Internet communications in many MNCs, the modeling approaches become possible and even desirable.

Of course, a MNC may face qualitative issues surrounding its business that are more difficult to capture in a supply chain model than those faced by a national cor­poration. The knowledge base and skill level of employees in different subsidiaries, as well as their costs, may vary significantly. Similarly, the MNC faces issues sur­rounding the promotion of organizational learning across its subsidiaries. When introducing a new product, for example, the MNC must select the countries in which to initially manufacture and sell the product and decide when and how the experience gleaned there will be disseminated throughout the corporation.

Nevertheless, effective supply chain models of large portions of a MNC's busi­ness, both financial and physical, can be implemented. Analysts using such models can expect to perform extensive scenario analyses to fully evaluate the impact of risk factors on the corporation's strategies.

Task 9. Discussion

1. Why are optimization models slowly involved by MNC?

2. What issues surrounding its business may a MNC face?

3. Are there effective supply chain models at present?

Task 10. Brief summary of the text (in English)

TEXT 8. REAL OPTIONS FOR HEDGING RISKS IN THE GLOBAL ECONOMY

Task 1: Scan through the text to grasp its general idea (2 min)

The global economy is changing radically and will continue to do so for many years. Recent trends include the following:

• Reduction of trade barriers

• Creation of regional economic zones

• Maturation of consumer markets in industrial countries

• Potential growth of consumer markets in emerging countries

• Increased expectations by consumers for product value, variety, and availability

• Increased volatility in financial and currency markets

These trends have simultaneously expanded the opportunities open to MNCs and increased their risks.

Major sources of uncertainty faced by a MNC include product prices, product demand, commodity prices, commodity supply, foreign exchange, new manufactur­ing and information technologies, competitor actions, and political changes. New tools of analysis and planning are needed to control risks associated with these uncertainties while guiding management toward enhanced profits and shareholder values.

Financial and business risks associated with designing and operating global sup­ply chains can best be mitigated by integrating tools of financial analysis with those of supply chain planning. Unfortunately, efforts to effect such an integration must overcome large cultural barriers within the firm. On the one hand, the firm's finan­cial managers are accustomed to managing risk by applying options and other deriv­ative instruments that they purchase from commercial banks. Financial engineers at these banks use options pricing theory to determine their cost based on probabilistic analysis of the uncertainties. The use of currency options to mitigate exchange rate risk is a classic application of this type. Many supply chain risks do not lend themselves to insurance coverage using options; for example, the risk that consumer demand in a particular country will drop by 50% next year due to an economic or governmental crisis.

On the other hand, the firm's supply chain managers employ (deterministic) optimization models in trying to fathom the complex interactions that make supply chain planning difficult and important. These deterministic mod­els do not identify contingency plans and hedging strategies for mitigating risk. Moreover, supply chain models have not yet been widely integrated with corporate financial planning models.

Task 2. After scanning the text answer the question: what is the text about?

Task 3. Read the text attentively paying attention to the underlying idea

Task 4. Read the text again and compare it with the translation on the opposite side of the broadside

The global economy is changing radically and will continue to do so for many years. Recent trends include the following: reduction of trade barriers; creation of regional economic zones; maturation of consumer markets in industrial countries; potential growth of consumer markets in emerging countries; increased expectations by consumers for product value, variety, and availability; increased volatility in financial and currency markets. These trends have simultaneously expanded the opportunities open to MNCs and increased their risks. Major sources of uncertainty faced by a MNC include product prices, product demand, commodity prices, commodity supply, foreign exchange, new manufactur­ing and information technologies, competitor actions, and political changes. New tools of analysis and planning are needed to control risks associated with these uncertainties while guiding management toward enhanced profits and shareholder values. Financial and business risks associated with designing and operating global sup­ply chains can best be mitigated by integrating tools of financial analysis with those of supply chain planning. Unfortunately, efforts to effect such an integration must overcome large cultural barriers within the firm. On the one hand, the firm's finan­cial managers are accustomed to managing risk by applying options and other deriv­ative instruments that they purchase from commercial banks. Financial engineers at these banks use options pricing theory to determine their cost based on probabilistic analysis of the uncertainties. The use of currency options to mitigate exchange rate risk is a classic application of this type. Many supply chain risks do not lend themselves to insurance coverage using options; for example, the risk that consumer demand in a particular country will drop by 50% next year due to an economic or governmental crisis. On the other hand, the firm's supply chain managers employ (deterministic) optimization models in trying to fathom the complex interactions that make supply chain planning difficult and important. These deterministic mod­els do not identify contingency plans and hedging strategies for mitigating risk. Moreover, supply chain models have not yet been widely integrated with corporate financial planning models.

Глобальная экономика радикально меняется, и это будет продолжаться много лет. Последними тенденциями являются следующие: сокращение торговых барьеров; создание региональных экономических зон; развитие потребительских рынков индустриальных стран; потенциальный рост потребительских рынков в развивающихся странах; растущие ожидания клиентов относительно качества, разнообразия и наличия продуктов; растущая нестабильность на финансовых и валютных рынках. Эти процессы одновременно расширили возможности, открывающиеся перед MНК, и увеличили их риски. Главными причинами неопределенности, стоящими перед MНК, являются цены на продукты, спрос на продукты, цены на потребительские товары, предложение товаров, курсы валют, новые производственные и информационные технологии, действия конкурентов и политические изменения. Необходимы новые инструменты анализа и планирования для контроля рисков, связанных с этими колебаниями, когда управление компанией старается увеличить прибыль и акционерный капитал. Финансовые и бизнес-риски, связанные с разработкой и функционированием глобальных цепей поставок, могут быть сокращены посредством интеграции инструментов финансового анализа с инструментами планирования цепей поставок. К сожалению, попытки осуществления такой интеграции должны преодолеть тяжелые культурные барьеры в пределах фирмы. С одной стороны, финансовые менеджеры фирм привыкли управлять рисками с помощью применения опционов и других производных инструментов, которые они покупают у коммерческих банков. Финансисты этих банков используют варианты теории цен для определения их стоимости на основе анализа вероятностей колебаний. Использование валютных опционов с целью снижения риска обменного курса является классическим приемом такого типа. Многие риски цепи поставок не дают возможности застраховать их, используя опционы; например, риск того, что потребительский спрос в определенной стране упадет в следующем году на 50% из-за экономического или правительственного кризиса. С другой стороны, менеджеры цепи поставок фирмы используют детерминистические модели в попытке прояснить сложные взаимодействия, делающие планирование цепи поставок сложным и важным процессом. Эти детерминистические модели не могут определить чрезвычайных планов и стратегий хеджирования для снижения риска. Более того, модели цепи поставок до сих пор не были широко интегрированы с моделями корпоративного финансового планирования.

Task 5. Compare equivalents underlined on both sides of the broadside. Try to memorize them

Task 6. Insert a required word or phrase in the blanks. Consult the dictionary if need be

1. competitor actions

2. consumer markets

3. contingency plans

4. managing risk

5. maturation

6. mitigating risk

7. probabilistic analysis

8. reduction of trade barriers

9. tools of analysis and planning

10. uncertainty

11. volatility

1. Recent trends include_____________________, creation of regional economic zones, _______________________of consumer markets in industrial countries, potential growth of _________________________in emerging countries, increased expectations by consumers for product value, variety, and availability, increased _________________in financial and currency markets.

2. Major sources of _______________________faced by a MNC include product prices, product demand, commodity prices, commodity supply, foreign exchange, new manufactur­ing and information technologies, _______________________, and political changes.

3. New ___________________________are needed to control risks associated with these uncertainties while guiding management toward enhanced profits and shareholder values.

4. The firm's finan­cial managers are accustomed to _________________________by applying options and other deriv­ative instruments that they purchase from commercial banks.

5. Financial engineers at the banks use options pricing theory to determine their cost based on ______________________________of the uncertainties.

6. The deterministic mod­els do not identify _________________________and hedging strategies for_______________________________.

Task 7. Checking up: read the text first in English then- its translation pattern to be ready for oral and written test-translation

Task 8. Test – translation. Translate the passage from English into Russian: orally -10 min. trying to find appropriate Russian equivalents; in written form- 30 min. Compare your translation with the given sample

The global economy is changing radically and will continue to do so for many years. Recent trends include the following:

• Reduction of trade barriers

• Creation of regional economic zones

• Maturation of consumer markets in industrial countries

• Potential growth of consumer markets in emerging countries

• Increased expectations by consumers for product value, variety, and availability

• Increased volatility in financial and currency markets

These trends have simultaneously expanded the opportunities open to MNCs and increased their risks.

Major sources of uncertainty faced by a MNC include product prices, product demand, commodity prices, commodity supply, foreign exchange, new manufacturing and information technologies, competitor actions, and political changes. New tools of analysis and planning are needed to control risks associated with these uncertainties while guiding management toward enhanced profits and shareholder values.

Financial and business risks associated with designing and operating global supply chains can best be mitigated by integrating tools of financial analysis with those of supply chain planning. Unfortunately, efforts to effect such an integration must overcome large cultural barriers within the firm.

On the other hand, the firm's supply chain managers employ (deterministic) optimization models in trying to fathom the complex interactions that make supply chain planning difficult and important. These deterministic models do not identify contingency plans and hedging strategies for mitigating risk. Moreover, supply chain models have not yet been widely integrated with corporate financial planning models.

Task 9. Discussion

1. What are the resent trends in the global economy affecting supply chain management?

2. What are major sources of uncertainty faced by a MNC?

3. How can financial and business risks associated with designing and operating global supply chain be mitigated?

Task 10. Brief summary of the text (in English)

TEXT 9. STOCHASTIC PROGRAMMING

Task 1: Scan through the text to grasp its general idea (2 min)

Now let’s interpret stochastic programming from the viewpoint of identifying real options for mitigating global supply chain risk.

Stochastic programming constraints on the company's performance in some or all scenarios of the future can insure the company against unacceptable downside risk in much the same way as financial options. An example is constraints stating that losses under all scenarios cannot exceed $ 10 million in any year of the planning horizon. Stochastic programming also allows the imposition of more subtle, proba­bilistic constraints; for example, constraints that limit the probability of losses in excess of $10 million in any year of the planning horizon to no more than 0.05.

The successful application of stochastic programming to such problems requires basic and applied research leading to practical solutions for a number of technical issues. First, probabilistic descriptions of important financial and supply chain uncertainties can be very complex because they involve diverse factors such as demand, exchange rates, and political unrest. Second, stochastic programming mod­els can address only a finite number of scenarios of the future, but the relevant prob­abilistic distributions are often continuous multivariate functions, which implicitly describe an infinite number of scenarios. Rigorous and efficient methods for doing this have not yet been fully developed. Third, modeling practitioners need to devise new methods for incorporating financial options in stochastic programming models because certain risks, such as those due to exchange rates uncertainties, may be difficult to mitigate solely by real options. Despite these difficulties, the potential payback from an effec­tive stochastic programming model is enormous. Moreover, without sacrificing too much rigor, knowledgeable practitioners should be able to fashion a pragmatic sto­chastic programming approach for specific MNCs with specific risks that is cus­tomized to the MNC's decision-making needs.

Task 2. Be able to answer the question what is the text about?

Task 3. Read the text attentively paying attention to the underlying idea

Task 4. Read the text again and compare it with the translation on the opposite side of the broadside

Now let’s interpret stochastic programming from the viewpoint of identifying real options for mitigating global supply chain risk. Stochastic programming constraints on the company's performance in some or all scenarios of the future can insure the company against unacceptable downside risk in much the same way as financial options. An example is constraints stating that losses under all scenarios cannot exceed $ 10 million in any year of the planning horizon. Stochastic programming also allows the imposition of more subtle, proba­bilistic constraints; for example, constraints that limit the probability of losses in excess of $10 million in any year of the planning horizon to no more than 0.05. The successful application of stochastic programming to such problems requires basic and applied research leading to practical solutions for a number of technical issues. First, probabilistic descriptions of important financial and supply chain uncertainties can be very complex because they involve diverse factors such as demand, exchange rates, and political unrest. Second, stochastic programming mod­els can address only a finite number of scenarios of the future, but the relevant prob­abilistic distributions are often continuous multivariate functions, which implicitly describe an infinite number of scenarios. Rigorous and efficient methods for doing this have not yet been fully developed. Third, modeling practitioners need to devise new methods for incorporating financial options in stochastic programming models because certain risks, such as those due to exchange rates uncertainties, may be difficult to mitigate solely by real options. Despite these difficulties, the potential payback from an effec­tive stochastic programming model is enormous. Moreover, knowledgeable practitioners should be able to fashion a pragmatic sto­chastic programming approach for specific MNCs with specific risks that is cus­tomized to the MNC's decision-making needs.

Давате опишем стохастическое программирование с точки зрения выявления реальных опционов с целью снижения риска глобальной цепи поставок. Ограничения стохастического программирования влияют на деятельность компании в некоторых или во всех возможных сценариях будущего, могут застраховать компанию от неприемлемо больших рисков во многих случаях, также как и финансовые опционы. Примером являются ограничения, утверждающие, что потери во всех сценариях не могут превышать 10 миллионов долларов в какой-либо год планируемого периода. Стохастическое программирование также позволяет налагать более мягкие, вероятностные ограничения; например, ограничения, которые лимитируют вероятность потерь, превышающих 10 миллионов долларов в какой-либо год планируемого периода, но не более чем 0.05. Успешное применение стохастического программирования для такого рода проблем требует базового и прикладного исследования, ведущих к практическим решениям некоторых технических вопросов. Во-первых, вероятностные описания важных финансовых колебаний и неточностей цепи поставок могут быть очень сложными, потому как включают разнообразные факторы, такие как спрос, обменные курсы и политическое состояние. Во-вторых, модели стохастического программирования могут обращаться только к конечному количеству сценариев будущего, но текущие вероятностные описания зачастую являются многопараметрическими функциями, которые просто описывают бесконечное количество сценариев. Точные и эффективные методы для этого пока еще не полностью разработаны. В-третьих, специалисты по моделированию должны разрабатывать новые методы по встраиванию финансовых опционов в модели стохастического программирования, потому что определенные риски, такие как риски из-за изменения обменного курса, будет сложно уменьшить только реальными опционами. Несмотря на эти трудности, потенциальная отдача от эффективной стохастической модели огромна. Более того, опытные специалисты должны быть способны приспосабливать прагматичный подход стохастического программирования для конкретной MНК с конкретными рисками, которые требуются для принятия решений MНК.

Task 5. Compare equivalents underlined on both sides of the broadside. Try to memorize them

Task 6. Insert a required word or phrase in the blanks. Consult the dictionary if need be

1. applied research

2. devise new methods

3. diverse factors

4. multivariate functions

5. proba­bilistic constraints

6. stochastic programming

1. _____________________________constraints on the company's performance in some or all scenarios of the future can insure the company against unacceptable downside risk in much the same way as financial options.

2. Stochastic programming allows the imposition of more subtle, ______________________________.

3. The successful application of stochastic programming to the problems of mitigating global supply chain risk requires basic and ___________________________leading to practical solutions for a number of technical issues.

4. Probabilistic descriptions of important financial and supply chain uncertainties can be very complex because they involve _________________________such as demand, exchange rates, and political unrest.

5. Stochastic programming mod­els can address only a finite number of scenarios of the future, but the relevant prob­abilistic distributions are often continuous____________________________________, which implicitly describe an infinite number of scenarios.

6. Modeling practitioners need to _________________________for incorporating financial options in stochastic programming models because certain risks, such as those due to exchange rates uncertainties, may be difficult to mitigate solely by real options.

Task 7. Checking up: read the text first in English then- its translation pattern to be ready for oral and written test-translation

Task 8. Test – translation. Translate the passage from English into Russian: orally -10 min. trying to find appropriate Russian equivalents; in written form- 30 min. Compare your translation with the given sample

Stochastic programming constraints on the company's performance in some or all scenarios of the future can insure the company against unacceptable downside risk in much the same way as financial options.

The successful application of stochastic programming to such problems requires basic and applied research leading to practical solutions for a number of technical issues. First, probabilistic descriptions of important financial and supply chain uncertainties can be very complex because they involve diverse factors such as demand, exchange rates, and political unrest. Second, stochastic programming mod­els can address only a finite number of scenarios of the future, but the relevant prob­abilistic distributions are often continuous multivariate functions, which implicitly describe an infinite number of scenarios. Rigorous and efficient methods for doing this have not yet been fully developed. Third, modeling practitioners need to devise new methods for incorporating financial options in stochastic programming models because certain risks, such as those due to exchange rates uncertainties, may be difficult to mitigate solely by real options. Despite these difficulties, the potential payback from an effective stochastic programming model is enormous. Moreover, without sacrificing too much rigor, knowledgeable practitioners should be able to fashion a pragmatic stochastic programming approach for specific MNCs with specific risks that is customized to the MNC's decision-making needs.

Task 9. Discussion

1. What do you know about stochastic programming

2. What are the advantages of stochastic programming?

3. How can global supply chain risk be mitigated by applying stochastic programming?

Task 10. Brief summary of the text (in English)

TEXT 10. INTEGRATION OF FINANCIAL AND PHYSICAL SUPPLY CHAINS

Task 1: Scan through the text to grasp its general idea (2 min)

Realistic optimization models for corpo­rate financial planning, which include linkages to supply chain models, can be con­structed. The reluctance of financial managers to consider such models may be due to a lack of knowledge about them coupled with legacy thinking about myopic approaches to financial decision making. In any event, we are hopeful that innova­tive financial managers are ready to consider broader, systems analysis approaches to the evaluation of their planning problems. On several occasions in recent years, while discussing supply chain modeling solutions in companies that manufacture and distribute physical products, financial managers present at the meetings have observed with enthusiasm that the models could also analyze the company's "financials" such as long-term debt, equity, retained earnings, and a host of other factors.

Models that link financial planning and supply chain networks for MNCs are particularly appealing because they allow the MNC to legally exploit a vast array of options for repatriating after-tax income in the company's local currency to the parent company. At the same time, using multiobjective optimization methods, these models allow senior managers to measure trade-offs among after-tax repatriated income and the performances of foreign subsidiaries. Finally, although they require more research, stochastic programming models to assist MNCs in selecting real and financial options are a tantalizing paradigm awaiting application in the near future. Due to uncertainties about interest rates, commodity prices, and other financial factors, stochastic programming is also very relevant to financial planning of a corporation doing business in only one country.

Optimization models are capable to holistically capture supply chain, marketing, and financial planning within the firm. This capability is a systems analysis projection of the balanced scorecard methodology that seeks to provide managers with a comprehensive range of internal and external measures and metrics describing the company's performance. Specifically, the balanced scorecard links performance measures in four key areas: financial perspective, customer perspective (marketing), internal perspective (supply chain), and learning and growth (human resources).

Task 2. Be able to answer the question what is the text about?

Task 3. Read the text attentively paying attention to the underlying idea

Task 4. Read the text again and compare it with the translation on the opposite side of the broadside

Realistic optimization models for corpo­rate financial planning, which include linkages to supply chain models, can be con­structed. The reluctance of financial managers to consider such models may be due to a lack of knowledge about them coupled with legacy thinking about myopic approaches to financial decision making. In any event, we are hopeful that innova­tive financial managers are ready to consider broader, systems analysis approaches to the evaluation of their planning problems. On several occasions in recent years, while discussing supply chain modeling solutions in companies that manufacture and distribute physical products, financial managers present at the meetings have observed with enthusiasm that the models could also analyze the company's "financials" such as long-term debt, equity, retained earnings, and a host of other factors. Models that link financial planning and supply chain networks for MNCs are particularly appealing because they allow the MNC to legally exploit a vast array of options for repatriating after-tax income in the company's local currency to the parent company. At the same time, using multiobjective optimization methods, these models allow senior managers to measure trade-offs among after-tax repatriated income and the performances of foreign subsidiaries. Finally, although they require more research, stochastic programming models to assist MNCs in selecting real and financial options are a tantalizing paradigm awaiting application in the near future. Due to uncertainties about interest rates, commodity prices, and other financial fac­tors, stochastic programming is also very relevant to financial planning of a corporation doing business in only one country. Optimization models are capable to holistically capture supply chain, marketing, and financial planning within the firm. This capability is a systems analysis projection of the balanced scorecard methodology that seeks to provide managers with a comprehensive range of internal and external measures and metrics describing the company's performance. Specifically, the balanced scorecard links performance measures in four key areas: financial perspective, customer perspective (marketing), internal perspective (supply chain), and learning and growth (human resources).

Реальные оптимизационные модели для корпоративного финансового планирования, включающие сочетание с моделями цепи поставок, могут быть построены. Нежелание финансовых менеджеров применять такие модели может объясняться недостатком знаний о них вкупе с недальновидными взглядами на принятие финансовых решений. В любом случае, мы надеемся, что передовые финансовые менеджеры готовы более широко рассматривать системные аналитические подходы к разрешению проблем планирования. В ряде случаев, за последние годы обсуждения решений по моделированию цепей поставок в компаниях, производящих и реализующих физические продукты, финансовые менеджеры, присутствующие на собраниях, с энтузиазмом отметили, что модели также могут анализировать “финансы” компании, такие как долгосрочный заем, акционерный капитал, нераспределенную прибыль и множество других факторов. Модели, связывающие финансовое планирование и сети цепей поставок для MНК, достаточно привлекательны, потому что они дают возможность MНК законно использовать большое количество вариантов для репатриации чистой прибыли из валюты данной страны в валюту материнской компании. В то же время, используя многоцелевые методы оптимизации, эти модели позволяют высшему руководству оценить выгоду от репатриации чистой прибыли и деятельности иностранных филиалов. Итак, несмотря на то, что модели стохастического программирования требуют дополнительных доработок, для поддержки MНК в выборе реальных и финансовых опционов, они являются заманчивой парадигмой, ждущей применения в будущем. Из-за колебаний в процентных ставках, ценах на товары, и других финансовых факторов, стохастическое программирование также хорошо подходит для финансового планирования в корпорации, занимающейся бизнесом только в одной стране. Оптимизационные модели могут охватить такие сферы компании как цепь поставок, маркетинг и финансовое планирование. Эта способность является проекцией анализа системы взаимосвязанных показателей, который направлен на то, чтобы предоставить менеджерам всеобъемлющий перечень внутренних и внешних показателей и измерений, описывающих деятельность фирмы. В частности, система взаимосвязанных показателей отражает результаты деятельности по четырем областям: финансовый фактор, потребительский фактор (маркетинг), внешний фактор (цепь поставок) и обучение и карьерный рост (человеческие ресурсы).

Task 5. Compare equivalents underlined on both sides of the broadside. Try to memorize them

Task 6. Insert a required word or phrase in the blanks. Consult the dictionary if need be

1. balanced scorecard

2. interest rates

3. lack of knowledge

4. long-term debt

5. multiobjective optimization methods

6. reluctance

7. repatriating after-tax income

8. retained earnings

1. The ______________________of financial managers to consider such models may be due to a ____________________________about them coupled with legacy thinking about myopic approaches to financial decision making.

2. On several occasions in recent years financial managers have observed with enthusiasm that the models could analyze the company's "financials" such as______________________, equity, ____________________________, and a host of other factors.

3. Models that link financial planning and supply chain networks for MNCs are particularly appealing because they allow the MNC to legally exploit a vast array of options for ___________________________________in the company's local currency to the par­ent company.

4. Using_______________________, optimization models allow senior managers to measure trade-offs among after-tax repatriated income and the performances of foreign subsidiaries.

5. Due to uncertainties about_______________________, commodity prices, and other financial fac­tors, stochastic programming is also very relevant to financial planning of a corpora­tion doing business in only one country.

6. The ________________________links performance measures in four key areas: financial perspective, customer perspective (marketing), internal perspective (supply chain), and learning and growth (human resources).

Task 7. Checking up: read the text first in English then- its translation pattern to be ready for oral and written test-translation

Task 8. Test – translation. Translate the passage from English into Russian: orally -10 min. trying to find appropriate Russian equivalents; in written form- 30 min. Compare your translation with the given sample

Realistic optimization models for corporate financial planning, which include linkages to supply chain models, can be constructed. The reluctance of financial managers to consider such models may be due to a lack of knowledge about them coupled with legacy thinking about myopic approaches to financial decision making. In any event, we are hopeful that innovative financial managers are ready to consider broader, systems analysis approaches to the evaluation of their planning problems. On several occasions in recent years, while discussing supply chain modeling solutions in companies that manufacture and distribute physical products, financial managers present at the meetings have observed with enthusiasm that the models could also analyze the company's "financials" such as long-term debt, equity, retained earnings, and a host of other factors.

Models that link financial planning and supply chain networks for MNCs are particularly appealing because they allow the MNC to legally exploit a vast array of options for repatriating after-tax income in the company's local currency to the parent company. At the same time, using multiobjective optimization methods, these models allow senior managers to measure trade-offs among after-tax repatriated income and the performances of foreign subsidiaries. Finally, although they require more research, stochastic programming models to assist MNCs in selecting real and financial options are a tantalizing paradigm awaiting application in the near future. Due to uncertainties about interest rates, commodity prices, and other financial factors, stochastic programming is also very relevant to financial planning of a corporation doing business in only one country.

Task 9. Discussion

1. Can realistic optimization models be constructed in the short run?

2. Why are financial managers reluctant to consider optimization models?

3. Why are models that link financial planning and supply chain network for MNC appealing?

Task 10. Brief summary of the text (in English)