Deck 17: International Operations Management

Question 1

When managers decide on modes of transportation and methods of inventory control, what area of international operations management is involved?

A) resources
B) location
C) accounting
D) logistics

Answer 1

D

Question 2

For firms following a cost leadership approach, the operations management function must be able to reduce the costs of creating goods or services to the absolute minimum so the firm can lower its prices while still earning an acceptable level of profits.

Answer 2

True

Question 3

Hong Kong's Roly International Holdings locates its factories in China where it can produce inexpensive Christmas decorations due to low wage rates. These goods are then shipped via slow, inexpensive cargo ships to discounters like Wal-Mart. Roly International Holdings follows a ________ strategy in its operations management.

A) differentiation
B) cost leadership
C) focus
D) niche

Answer 3

B

Question 4

What business strategy relies on creating goods that are clearly different from the competitors?

A) differentiation
B) cost leadership
C) focus
D) niche

Question 5

What has the most significant impact on planning and implementing operations management activities?

A) centralization of authority
B) economies of scale
C) business strategy
D) market share

Question 6

What are the essential location decisions faced by international operations managers? What country features and product-related characteristics influence the decision of where to locate an international facility?

Question 7

Why is quality an important function of international operations management? What role does the ISO play in quality?

Question 8

If the firm uses a customized approach to each market, its operations management should be globally integrated.

Question 9

Forest Foods is an MNE with operations in Asia, Europe, and North America. Forest Foods uses a standardized production process and technologies in every market in which it conducts business. The operations systems at Forest Foods should most likely be ________.

A) regionally adapted
B) locally designed
C) nationally customized
D) globally integrated

Question 10

Managing information is not only important for an international firm; it is also more complex than for a domestic firm.

Question 11

Seemingly simple logistics and materials management issues often become much more complex in an international context.

Question 12

The transformation of inputs to final goods and services in an international firm is called international ________.

A) distribution
B) marketing
C) operations management
D) supply chain management

Question 13

In today's age of quick communication, the location of a factory has a major impact on a firm's ability to respond to customer tastes and preferences.

Question 14

Porsche competes on the basis of product performance and status. Its production facilities need to be located where there is a skilled labor force despite the higher costs of that labor. What business strategy is affecting operations management decisions in this case?

A) differentiation
B) cost leadership
C) focus
D) niche

Question 15

What is the difference between operations management and supply chain management?

Question 16

________ is the set of activities an organization uses to transform different kinds of inputs into final goods and services.

A) Global distribution
B) International marketing
C) Operations management
D) Organizational design

Question 17

Describe the three areas in which operations managers make decisions.

Question 18

What is the relationship between operations management and productivity? What steps can a firm take to enhance its productivity?

Question 19

What is the central role of operations management within an international firm?

A) creating value
B) marketing products
C) managing inventory
D) supporting vertical integration

Question 20

The business strategy followed by the firm sets the stage for the role of operations management within an international firm.

Question 21

In the Japanese keiretsu system, contract enforcement between firms and suppliers is less problematic because of ________.

A) overlapping judicial systems
B) cross-ownership of shares
C) horizontal integration
D) value chains

Question 22

What are operations management decisions, processes, and issues that involve the creation of tangible goods called?

A) service operations management
B) production management
C) management of goods
D) manufacturing

Question 23

What increases the difficulty and expense for international businesses that try to enforce contracts with foreign suppliers?

A) changes in technology
B) fluctuating exchange rates
C) differences in national legal systems
D) lack of oversight from World Trade Organization

Question 24

Sourcing and procuring refer to ________.

A) supply chain management
B) production management
C) service operations management
D) integration management

Question 25

What are operations management decisions, processes, and issues that involve the creation of intangible services called?

A) service operations management
B) production management
C) management of goods
D) manufacturing

Question 26

BP has several units responsible for its business. One unit explores the world for natural gas and crude oil. Another unit extracts the oil and gas. Another unit transports the oil and gas, and its refineries transform the crude oil into gasoline and other products. BP trucks transport the refined products to company-owned service stations for sale to the final consumer. BP's operations management system is based on ________.

A) horizontal integration
B) vertical integration
C) intracompany transfers
D) cross-ownership

Question 27

What is the first step in the supply chain management process?

A) deciding how to acquire raw materials from local suppliers
B) determining the appropriate degree of vertical integration
C) deciding how to transport finished goods to buyers
D) determining the most profitable target market

Question 28

The set of processes and steps a firm uses to acquire the various resources it needs to create its products is called ________.

A) procuring
B) outsourcing
C) diversifying
D) onboarding

Question 29

Firms that have little ________ are involved in very few steps in the production chain.

A) standardization
B) vertical integration
C) operations management
D) customization

Question 30

Why do most personal computer manufacturers purchase components from outside suppliers?

A) protection of intellectual property rights
B) fast rate of technological change
C) close oversight of quality ratios
D) fluctuation in currency rates

Question 31

A firm should most likely make a product internally when there is a ________ potential for competitive advantage and a ________ degree of strategic vulnerability.

A) high; high
B) low; high
C) high; low
D) low; low

Question 32

________ refers to the situation when various units within the firm can be seen as suppliers to other units within the firm.

A) Supply chain management
B) Vertical integration
C) Operations management
D) Cross-ownership

Question 33

________ is the extent to which a firm either provides its own resources or obtains them from other sources.

A) Supply chain management
B) Vertical integration
C) Operations management
D) Cross-ownership

Question 34

Special ventures or contract arrangements for inputs are most appropriate when there is a(n) ________ potential for competitive advantage and a ________ degree of strategic vulnerability.

A) high; high
B) intermediate; moderate
C) high; moderate
D) low; low

Question 35

Ford takes thousands of component parts including sheet metal, engine parts, and upholstery and combines them to make automobiles. This is an example of ________ activities.

A) manufacturing
B) distribution
C) logistical
D) operations

Question 36

Buying an input is most sensible when there is a(n) ________ potential for competitive advantage and a ________ degree of strategic vulnerability.

A) high; moderate
B) intermediate; moderate
C) high; low
D) low; low

Question 37

Executives at Elfman Computers have decided that the firm will make the memory chips, microprocessors, power supplies, and disc drives needed to manufacture the firm's computer systems. As a result, Elfman will most likely increase its control over ________.

A) competitor reputations
B) delivery schedules
C) market demands
D) exporting fees

Question 38

Heineken NV buys grains, labels, bottles, and cartons from other suppliers prior to brewing and bottling its beer. This suggests that Heineken has little ________.

A) supply chain management
B) horizontal integration
C) vertical integration
D) cross-ownership

Question 39

The make-or-buy decision primarily relates to ________.

A) reducing production
B) acquiring components
C) forming joint ventures
D) obtaining foreign facilities

Question 40

________ is the creation of goods by transforming raw materials and component parts in combination with capital, labor, and technology.

A) Service operations management
B) Production management
C) Management of goods
D) Manufacturing

Question 41

Which theory explains why the low labor costs of Bangladesh have attracted toy, footwear, and textile manufacturers to develop manufacturing facilities in Bangladesh?

A) national competitive advantage theory
B) Heckscher-Ohlin theory
C) country similarity theory
D) absolute advantage theory

Question 42

What is the primary factor that influences the decision of where to locate production facilities?

A) regulatory policies
B) resource availability
C) distribution options
D) organizational structure

Question 43

A(n) ________ is a specially designated and controlled geographical area in which imported or exported goods receive preferential tariff treatment.

A) economic union
B) customs union
C) free trade zone
D) free trade area

Question 44

Patricia, a manager at Global Airways, has the responsibility of deciding how many passengers Global Airways can serve at a given time. Patricia is most likely involved with ________.

A) operations management
B) service production planning
C) capacity planning
D) service operations management

Question 45

An experiment found that consumer preference for Tempomax watches fell by 74 percent when the consumers were told that Tempomax watches were produced in Pakistan instead of Germany. Which term best explains this occurrence?

A) national competitive advantage
B) country-of-origin effects
C) ethnocentric effects
D) national reputation

Question 46

________ is the management of the flow of materials, parts, supplies, and other resources from suppliers to the firm; the flow of materials, parts, supplies, and other resources within and between units of the firm itself; and the flow of finished products, services, and goods from the firm to customers.

A) International logistics
B) International distribution
C) International operations management
D) Organizational design

Question 47

A weakness of the Japanese keiretsu system is its inability to reduce the problem of enforcing contracts between a firm and its suppliers.

Question 48

Firms that have little vertical integration typically make the inputs necessary for manufacturing.

Question 49

The suppliers used by Morrison Controls deliver components directly to Morrison's manufacturing center as the inputs are needed for production to minimize Morrison's inventory costs. Morrison most likely uses ________.

A) one-stop shipping
B) just-in-time systems
C) materials management
D) customized logistics processes

Question 50

Buying from an external supplier reduces a firm's financial and operating risk.

Question 51

When Nissan chose to locate a new manufacturing facility in Jackson, Mississippi, it received $295 million in incentives. What factor was likely the most critical in the location decision?

A) infrastructure
B) government policies
C) country-of-origin effects
D) resource availability

Question 52

A product's value-to-weight ratio primarily affects ________.

A) inventory maintenance
B) make-or-buy decisions
C) transportation costs
D) customer feedback

Question 53

Which theory suggests that countries with large, low-cost endowments of a factor of production will attract firms needing that factor of production?

A) national competitive advantage theory
B) Heckscher-Ohlin theory
C) country similarity theory
D) absolute advantage theory

Question 54

________ refer(s) to the reputation a country has for the products that it produces.

A) Country brand image
B) National reputation
C) Country-of-origin effects
D) Ethnocentric effects

Question 55

Nissan stores hundreds of cars that will be sold in the southern part of North America at the Port of Houston. How does Nissan most likely benefit from this arrangement?

A) lowering costs
B) improving reliability
C) minimizing advertising needs
D) improving supply chain flexibility

Question 56

Christopher Radko, a premium holiday ornament manufacturer, is considering locating manufacturing facilities in China in order to lower costs. However, the firm fears a backlash from ornament collectors who prefer ornaments made in Eastern Europe. What location issue is Christopher Radko dealing with?

A) resource availability
B) country-of-origin effects
C) product-related issues
D) inventory management policies

Question 57

Supply chain management is the process of selecting whether to make or buy the resources necessary for the manufacturing process.

Question 58

Because Ferrari is a relatively small automobile manufacturer, it is more likely to buy its component parts from other suppliers.

Question 59

The management of the flow of materials, parts, supplies, and other resources from suppliers to the firm combined with the flow of materials, parts, supplies, and other resources within and between units of the firm itself is called ________.

A) international logistics
B) materials management
C) operations management
D) customized logistics

Question 60

The decision to buy, rather than make, dictates the need to choose between long-term and short-term supplier relationships.

Question 61

When technology is evolving rapidly or delivered, costs can change as a result of inflation or exchange rate fluctuation, making inputs in-house is the most logical choice.

Question 62

Infrastructure and country-of-origin effects are the primary determinants of whether an individual country is a suitable location for a facility.

Question 63

When quick customer feedback is important, firms generally produce the product close to the final point of sale.

Question 64

Buying inputs for manufacturing increases the firm's level of investment.

Question 65

What is vertical integration?

Question 66

All else being equal, a firm will choose to make or buy simply on the basis of whether it can obtain the resource cheaper by making it internally or by buying it from an external supplier.

Question 67

What type of production location makes sense for a firm following a cost leadership strategy?

Question 68

A firm that buys, rather than makes, lacks the flexibility to change suppliers as circumstances dictate.

Question 69

What is international logistics and materials management? What factors differentiate domestic and international materials management?

Question 70

When making the make-or-buy decision, international firms must make trade-offs between costs and three other variables. What are they? Explain the nature of the trade-off international firms must make.

Question 71

Free trade zones enable firms to lower costs by importing key components and then assembling products locally.

Question 72

Which government policies are especially important in the decision about where to locate an international facility? Why do free trade zones often influence the location decisions of international businesses?

Question 73

Firms with global product structures will locate factories anywhere in the world to meet the firm's cost and quality performance goals.

Question 74

Capacity planning is deciding how many customers a firm will be able to serve at a given time.

Question 75

A product's value-to-weight ratio affects the importance of transportation costs in the product's delivered price.

Question 76

Larson Financial Services, an international accounting firm, provides customers with tax advice. Which characteristic of international services is most likely an issue for Larson?

A) service intangibility
B) service perishability
C) customer participation
D) product bundling and compatibility

Question 77

What is the make-or-buy decision? What factors influence the make-or-buy decisions? Why do most PC manufacturers choose to buy instead of make?

Question 78

The management of the flow of finished products, services, and goods from the firm to customers is called materials management.

Question 79

How does a product's value-to-weight ratio influence the production location decision?

Question 80

How does a JIT inventory management system work? Why is factory location especially important to firms that use JIT?