Question 1

Which of the following is a hidden cost associated with basing production in a foreign location?

Accepted Answer

A)   Cost of labor within the location
B)   High employee turnover
C)   Transportation costs
D)   Differences in the value of currency

Question 2

The minimum efficient scale of production is high when fixed costs are low.

Accepted Answer

A) True 
 B)False

Question 3

How does the type of technology a firm uses affect its decision of where to locate production?

Accepted Answer

The type of technology a firm uses to pe...

Question 4

Just-in-time systems reduce product quality although it brings about huge cost savings.

Accepted Answer

A) True 
 B)False

Question 5

Explain how companies using JIT systems can reduce risks associated with a global supply chain that operates on just-in-time principles.

Accepted Answer

There are ways of reducing the risks ass...

Question 6

The firm that improves its quality control will also reduce its costs of value creation.

Accepted Answer

A) True 
 B)False

Question 7

Just-in-time systems help a firm respond quickly to increases in demand.

Accepted Answer

A) True 
 B)False

Question 8

Upward migration in the strategic role of foreign production sites arises when they upgrade their own capabilities.

Accepted Answer

A) True 
 B)False

Question 9

A(n)  _____ is a grouping of various types of machinery, a common materials handler, and a centralized cell controller.

Accepted Answer

A)   flexible machine cell
B)   Six Sigma
C)   assembly line
D)   minimum efficient scale

Question 10

The idea that valuable knowledge does not reside just in a firm's domestic operations but can also be found in its foreign subsidiaries is called _____.

Accepted Answer

A)   global learning
B)   global production processes
C)   global economics
D)   global factors

Question 11

Which of the following statements is true of the country factors that govern international business?

Accepted Answer

A)   Relative factor costs should be considered when selecting a country for production.
B)   Centralized production is the most suitable method of doing international business.
C)   Exchange rates are not a significant factor that determines the selection of a country.
D)   Decentralized manufacturing is the most suitable method of doing international business.

Question 12

RSA is a bicycle manufacturing company. Which of the following is a make-or-buy decision that the company will have to make?

Accepted Answer

A)   Should the company increase its responsiveness toward the retailers?
B)   What are the products that the company should manufacture?
C)   Should the company outsource production to a low-cost vendor?
D)   What should be the pricing strategy of the company's product?

Question 13

With a(n)  _____ system, suppliers, shippers, and the purchasing firm can communicate with each other with no time delay.

Accepted Answer

A)   CAD
B)   JIT
C)   CAM
D)   EDI

Question 14

Which of the following products will most likely have high value-to-weight ratios?

Accepted Answer

A)   Pharmaceuticals
B)   Refined sugar
C)   Bulk chemicals
D)   Petroleum products

Question 15

At Six Sigma, a production process would be highly accurate and create just _____.

Accepted Answer

A)   3.4 defects per hundred thousand units
B)   6.8 defects per million units
C)   3.4 defects per million units
D)   6.8 defects per hundred thousand units

Question 16

The term _____ has been coined to describe the ability of companies to use flexible manufacturing technology to reconcile the goals of low cost and product personalization.

Accepted Answer

A)   assembly-line production
B)   product standardization
C)   mass customization
D)   Six Sigma production

Question 17

Concentration of production is appropriate when _____.

Accepted Answer

A)   the product serves universal needs
B)   the product does not serve universal needs
C)   the product's value-to-weight ratio is low
D)   volatility in important exchange rates is expected

Question 18

Explain how the concept of production efficiency has changed with the rise of flexible manufacturing technologies.

Accepted Answer

Flexible technology, also known as lean ...

Question 19

Identify an advantage of adopting a low minimum efficient scale.

Accepted Answer

A)   It helps companies reduce the level of initial capital required for business.
B)   It allows the firm to accommodate demands for local responsiveness.
C)   It allows firms discount political risks and other global capital risks.
D)   A minimum efficient scale of a plant allows decentralization of production.

Question 20

Which of the following is a major source of the improvement in the capabilities of a foreign site?

Accepted Answer

A)   Increasing abundance of advanced factors of production in the nation where the factory is located
B)   Changes in the labor costs associated with the foreign site
C)   Fluctuations in the quality of the product coming out of the foreign site
D)   Sudden changes in the currency exchanges rates with the nation in which the factory is located

Exam 17: Global Production, Outsourcing, and Logistics

With a(n) _____ system, suppliers, shippers, and the purchasing firm can communicate with each other with no time delay.

Correct AnswerverifiedShow Answer

Just-in-time systems help a firm respond quickly to increases in demand.

Correct AnswerverifiedShow Answer

RSA is a bicycle manufacturing company. Which of the following is a make-or-buy decision that the company will have to make?

Correct AnswerverifiedShow Answer

A(n) _____ is a grouping of various types of machinery, a common materials handler, and a centralized cell controller.

Correct AnswerverifiedShow Answer

Identify an advantage of adopting a low minimum efficient scale.

Correct AnswerverifiedShow Answer

The idea that valuable knowledge does not reside just in a firm's domestic operations but can also be found in its foreign subsidiaries is called _____.

Correct AnswerverifiedShow Answer

The term _____ has been coined to describe the ability of companies to use flexible manufacturing technology to reconcile the goals of low cost and product personalization.

Correct AnswerverifiedShow Answer

The firm that improves its quality control will also reduce its costs of value creation.

Correct AnswerverifiedShow Answer

Which of the following statements is true of the country factors that govern international business?

Correct AnswerverifiedShow Answer

Explain how companies using JIT systems can reduce risks associated with a global supply chain that operates on just-in-time principles.

Correct AnswerverifiedThere are ways of reducing the risks ass...View AnswerShow Answer

At Six Sigma, a production process would be highly accurate and create just _____.

Correct AnswerverifiedShow Answer

Upward migration in the strategic role of foreign production sites arises when they upgrade their own capabilities.

Correct AnswerverifiedShow Answer

How does the type of technology a firm uses affect its decision of where to locate production?

Correct AnswerverifiedThe type of technology a firm uses to pe...View AnswerShow Answer

Which of the following is a major source of the improvement in the capabilities of a foreign site?

Correct AnswerverifiedShow Answer

Concentration of production is appropriate when _____.

Correct AnswerverifiedShow Answer

Which of the following products will most likely have high value-to-weight ratios?

Correct AnswerverifiedShow Answer

Which of the following is a hidden cost associated with basing production in a foreign location?

Correct AnswerverifiedShow Answer

Just-in-time systems reduce product quality although it brings about huge cost savings.

Correct AnswerverifiedShow Answer

The minimum efficient scale of production is high when fixed costs are low.

Correct AnswerverifiedShow Answer

Explain how the concept of production efficiency has changed with the rise of flexible manufacturing technologies.

Correct AnswerverifiedFlexible technology, also known as lean ...View AnswerShow Answer

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There are ways of reducing the risks ass...
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The type of technology a firm uses to pe...
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Flexible technology, also known as lean ...
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