Part 1:
Which type of inventory system would you use in the following situations?
Supplying your kitchen with fresh food.
Obtaining a daily newspaper.
Buying gas for your car.

 In the following system I would consider fixed quantity inventory system since it has been uses fairly for a long time in keeping levels stable. As a result on the systems the method ensures that there are no stocks out unless there are greater levels of fluctuations in demand. The inventory system ensures that orders are placed especially when they are economic practicable, because they have to be set following the establishment of economic orders thereby, there is less wastage in terms of ordering supplies. Fixed inventory system has various feature  in various situations such as; when orders are periodically place and in our case is obtaining daily newspaper, the order quantity is different every like the supply of kitchen fresh food. Fixed inventory system is the best since it has got high possibilities of taking advantages of quantity discounts from the suppliers (Branch, 2012).
Part 2:
With so much productive capacity and room for expansion in the United States, why would a company based in the United States choose to purchase items from a foreign firm? Discuss the pros and cons.  

The United State engage in foreign direct investm3ent despite it wide room for expansion due to various advantages despite the disadvantages that comes along. Firstly foreign investment motivates a country’s target on the economic sector since it generates a favorable surrounding and benefits for the local industry Another advantage is on the economic boost and employment, where new and several jobs are created as investors build new companies thus generation of new opportunities.  Despite the various benefits which come along with foreign investment there are still the disadvantages which includes;   higher cost since it is by fact that investing in another country is more expensive than exporting goods. The other major disadvantage is negative impact on the country’s investment especially on the exchange rates which might have a negative impact on the nation (Gerber, 2010).

References

Gerber . K, (2010). Economic Enviroment. Cape Town: Pearson Education South Africa.

Branch A. E, (2012). International purchasing and management. London: Thomson Learning.