Deck 13: Global Operations and Supply-Chain Management

Question 1

When considering the one-versus-many location for production facilities for components and raw materials some of the most important considerations are: fixed costs, minimum efficient scale and its comparison to demand, and the value-to-weight ratio.

Answer 1

True

Question 2

The three major considerations for deciding the location of production facilities for products are: does the product serve the needs of all customers around the world, proximity to market and proximity to suppliers, and the effect on product's image being produced in that location.

Answer 2

True

Question 3

A major advantage of making components and raw materials in-house is that the firm is not required to honor protections of intellectual property.

Answer 3

False

Question 4

When a firm has been making goods and services in-house, and then decides to buy these goods and services from suppliers is referred to as offshoring.

Question 5

A supply chain encompasses all the activities associated with the flow and transformation of goods and services from raw material to the end user.

Question 6

One advantage of global procurement is that the firm can maximize its flexibility by allocating its orders among suppliers in a dynamic way and the firm has access to more suppliers that can generally provide lower costs than domestic suppliers.

Question 7

Steps in the production process are called _____.

A)production stages
B)production facilities
C)raw materials
D)components
E)factors of production

Question 8

The production systems of Honda Motor Company, the Boeing Company, and Toshiba Corporation, would be called _____ systems.

A)production
B)manufacturing
C)service
D)component
E)raw

Question 9

Boeing buying from thousands of suppliers in more than 100 countries, but only having production facilities in the U.S. is an example of global procurement and domestic production.

Question 10

A production system in which services dominate the value of the product is known as a(n)_____ system.

A)production
B)manufacturing
C)service
D)component
E)raw

Question 11

The practice of producing components and raw materials in-house AND purchasing them from suppliers is referred to as a supply-chain malfunction.

Question 12

A production system is a system that businesses use to create the goods and services or to produce the products.

Question 13

In the production system model, all of the following would be considered inputs EXCEPT _____.

A)labor
B)machines and equipment
C)the finished product
D)raw materials
E)factors of production

Question 14

When the demand is equal or lower than the minimum efficient scale, multiple production facility locations are preferred.

Question 15

Software packages designed to integrate the majority of a firm's business processes, execute all transactions related to the firm's business processes being integrated, store each piece of data only once in an enterprise-wide database, allow access to data and information in real time, and operate in a client-server environment, traditional or web-based are called enterprise resource planning systems.

Question 16

The activities in operations management can be grouped into four business functions: procurement, production, logistics, and research and development.

Question 17

The property of ERP systems to handle the accounting standards of multiple countries is called the multi-currency property.

Question 18

Goods and services that integrate a product are called _____.

A)production process
B)production facilities
C)raw materials
D)components
E)factors of production

Question 19

The production system of a hair and nail salon would be called a manufacturing system.

Question 20

In operations management, the acquisition of goods and services is referred to as logistics.

Question 21

Of the following, which is NOT a disadvantage of making?

A)The firm has less control over quality.
B)It requires the company to have expertise in the production of the component or raw materials what will be made.
C)The people producing the component or raw material do not have the incentive to improve their product.
D)The firm may not be able to gain the economies of scale that can be gained by a supplier that is able to pool the activity of a large number of firms.
E)The firm would incur both fixed and variable costs.

Question 22

Of the following, which is NOT an advantage of global procurement?

A)The firm does not need to invest the money that is associated with making.
B)The firm can focus upon the production stages and components with the most value added.
C)The firm can maximize its flexibility by allocating its orders among the suppliers in a dynamic way.
D)If global suppliers are selling to many companies in the same industry but in different countries, these suppliers can achieve economies of scale and lower costs.
E)The firm does not rely upon suppliers on important dimensions such as quality, delivery, and cost.

Question 23

Of the following, which is NOT a consideration for the one-versus-many production facilities decision?

A)Fixed costs
B)The notion of the minimum efficient scale and its comparison to demand
C)The local culture
D)The value-to-weight ratio
E)The infrastructure that the company offers

Question 24

Most of the activities in operations management can be grouped into the following business functions EXCEPT:

A)procurement
B)logistics
C)production
D)research and development
E)selling

Question 25

Collections of computer hardware and software arranged to transmit information from one place to another are known as _____.

A)telecommunication networks
B)global networks
C)enterprise networks
D)internetworking networks
E)multi-national networks

Question 26

Of the following, which is NOT an advantage of making?

A)Knowledge of the product may provide efficiency advantages over potential suppliers.
B)The firm has more control over quality.
C)People producing the component or raw material have the incentive to improve their product.
D)The firm has more control over deliveries.
E)It secures the supply source.

Question 27

The supply chains of global businesses such as Boeing, Ford, United Airlines, and the pharmaceutical companies Merck and Pfizer are known as _____ supply chains.

A)environmental
B)global
C)enterprise
D)telecommunication
E)multi-national

Question 28

Which of these is responsible for the transformations required by the production process?

A)Procurement
B)Logistics
C)Production
D)Research and development
E)Selling

Question 29

ERP systems aim to

A)store all information in multiple databases.
B)represent each business function by a module.
C)design the system as a collection of functions.
D)eliminate the need for internetworking networks.
E)reduce a business's reliance on software.

Question 30

______ is responsible for the acquisition of goods and services in the production process.

A)Procurement
B)Logistics
C)Production
D)Research and development
E)Selling

Question 31

Ford's ERP system follows the American accounting standards in its U.S. subsidiaries, and follows the Mexican accounting standards in its Mexico subsidiaries. This ERP system is _____.

A)multi-language
B)multi-national
C)multi-currency
D)multi-enterprise
E)multi-culture

Question 32

When the firm doing the outsourcing and the supplier that will provide the outsourced goods and services are located in the same country, it is called _____.

A)domestic outsourcing
B)domestic manufacturing
C)insourcing
D)offshoring
E)global outsourcing

Question 33

The production process may consist of one or more transformations which could be all of the following EXCEPT:

A)physical
B)locational
C)psychological
D)esteem
E)physiological

Question 34

_____ refers to the property of ERP systems to simultaneously operate in multiple languages.

A)Multi-language
B)Multi-national
C)Multi-currency
D)Multi-enterprise
E)Multi-culture

Question 35

Which of the following has the highest value-to-weight ratio?

A)pickup trucks
B)HD televisions
C)personal computers
D)microchips
E)petroleum

Question 36

Determining which components and raw materials should be produced in-house and which components and raw materials should be acquired from suppliers is known as the _____ decision.

A)sale-or-keep
B)manufacture-or-sale
C)sink-or-swim
D)make-or-buy
E)build-or-break

Question 37

Most of the activities in operations management can be grouped into ____ business functions.

A)two
B)three
C)four
D)five
E)six

Question 38

When the firm has been buying goods and services from suppliers, and then decides to make these goods and services in-house, it is called _____.

A)dual outsourcing
B)domestic outsourcing
C)global outsourcing
D)offshoring
E)insourcing

Question 39

A Japanese user of Sony's ERP system can view the company's financial information in Japanese yen, while a British user of the system is able to see the same information in British pounds. This ERP system is _____.

A)multi-language
B)multi-national
C)multi-currency
D)multi-enterprise
E)multi-culture

Question 40

Of the following, which is NOT a disadvantage of global procurement?

A)The firm has to invest the money that is associated with making products.
B)The firm may need to compete for the attention of suppliers.
C)The profits that the company could earn by producing the goods and services in-house now go to the suppliers.
D)Buying from suppliers could unintentionally lead suppliers becoming competitors.
E)The firm relies upon suppliers on important dimensions such as quality, delivery, and cost.

Question 41

__________ refers to collections of computer hardware and software arranged to transmit information from one place to another.

Question 42

Discuss the circumstances that would MOST likely convince a company to use one production facility rather than multiple facilities.

Question 43

Differentiate between manufacturing and service system. Describe a typical production system using a company.

Question 44

__________ occurs when components and raw materials are produced in-house and purchased from suppliers.

Question 45

When the goods dominate the value of the product, the production system is typically called a(n)________ system.

Question 46

Goods and services that integrate a product are called __________.

Question 47

Which of these is responsible for the movement of materials in the production process?

A)Procurement
B)Logistics
C)Production
D)Research and development
E)Selling

Question 48

__________ occurs when a firm buys components and raw materials globally.

Question 49

Tipton Manufacturing is based in Lexington, Kentucky. The company does not make the gears it uses in its products, it purchases them from a supplier in Hong Kong. Tipton Manufacturing is practicing

A)global outsourcing.
B)domestic outsourcing.
C)insourcing.
D)right-sizing.
E)downsizing.

Question 50

__________ (also called global outsourcing)occurs when a firm is outsourcing to a supplier located in a different country.

Question 51

Determining if products made in-house will be produced in one or more facilities, and if these facilities should be located in one or more countries is called __________.

Question 52

"Fortunately, ERP does not affect global supply chain management." Do you agree with this statement. Defend your position.

Question 53

Identify the advantages and disadvantages of making components and raw materials in-house.

Question 54

__________ refers to all activities associated with the flow and transformation of goods and services from the raw material stage to the end user, together with the corresponding flows of monetary funds and information.

Question 55

Describe the advantages and disadvantages of global procurement.

Question 56

______ is responsible for the design of new products in the production process.

A)Procurement
B)Logistics
C)Production
D)Research and development
E)Selling

Question 57

__________ refers to a property of ERP systems to handle the accounting standards of multiple countries.

Question 58

A company that only completes product design and outsources all other production process functions is called a(n)__________.

Question 59

______  refers to the management of the direct resources that are involved in the production system of a business organization.

A)Procurement management
B)Operations management
C)Logistics management
D)Research and development
E)Marketing management

Question 60

One production facility will usually be favored when

A)fixed costs are low.
B)demand is higher than the minimum efficient scale.
C)goods have a low value-to-weight ratio.
D)unemployment is very low.
E)a company is extremely profitable.

Question 61

Scenario - Ardella Enterprises Twenty years ago two people from New Jersey, USA had a dream of building a superior company that would have global operations with an unparalleled supply chain.  The idea took root and Ardella Enterprises was born.  This company conducts operations across four continents.  It has earned a reputation for prompt deliveries, accurate shipments, and exemplary customer service.  This partnership is quickly taking the lead in the industry and is contemplating further expansion. Ardella Enterprises grossed over $11 billion last year.  Its plan for additional expansion and growing Internet influence is projected to increase sales by two billion dollars within the first year. Which one of the following would describe Ardella Enterprises if it would decide to stop purchasing goods and services from suppliers and instead make the goods and services in-house?

A)A hollow corporation
B)An insourcing firm
C)An international development association
D)An outsourcing corporation
E)A production system

Question 62

Scenario - Ardella Enterprises Twenty years ago two people from New Jersey, USA had a dream of building a superior company that would have global operations with an unparalleled supply chain.  The idea took root and Ardella Enterprises was born.  This company conducts operations across four continents.  It has earned a reputation for prompt deliveries, accurate shipments, and exemplary customer service.  This partnership is quickly taking the lead in the industry and is contemplating further expansion. Ardella Enterprises grossed over $11 billion last year.  Its plan for additional expansion and growing Internet influence is projected to increase sales by two billion dollars within the first year. Ardella Enterprises acknowledges the importance of its supply chain.  It knows that the company's operations would not be as successful if the supply chain was less effective.  Which one of the following is not related to a company's supply chain and its functions?  

A)The activities of the supply chain are associated with the transformation of goods from raw material to end user.
B)Effective supply chain management will minimize total costs.
C)Supply chain management involves maximizing the value of the product to the final user.
D)Management of the supply chain requires adherence to stiff environmental standards.
E)A company's supply chain encompasses all activities associated with the flows of monies and information.

Question 63

Scenario - Jenkins and Jones Corporation Michael Jenkins and Emma Jones started the Jenkins and Jones Corporation in 1976 in Kansas, USA.  The initial goal of this company was to serve customers throughout the United States.  Since the company's inception it has grown at an outstanding rate.  It now serves online customers as well as customers in ten foreign nations.  Jenkins and Jones is now looked at as the industry's benchmark company due to its superior supply chain management skills.  Its practices and techniques are used by many other organizations in the industry to improve their own supply chain management skills. As the Jenkins and Jones Corporation continues to grow and expand, one of the strategic decisions it must face is that of location of its facilities.  Which one of the following does not relate to the problem of location?  

A)Minimum efficient scale in comparison to demand
B)Value-to-weight ratio
C)Fixed costs
D)Factor endowments of countries
E)Number of Internet users

Question 64

Scenario - Jenkins and Jones Corporation Michael Jenkins and Emma Jones started the Jenkins and Jones Corporation in 1976 in Kansas, USA.  The initial goal of this company was to serve customers throughout the United States.  Since the company's inception it has grown at an outstanding rate.  It now serves online customers as well as customers in ten foreign nations.  Jenkins and Jones is now looked at as the industry's benchmark company due to its superior supply chain management skills.  Its practices and techniques are used by many other organizations in the industry to improve their own supply chain management skills. If Jenkins and Jones would decide to maintain its product production on a domestic basis, there would be certain advantages the company could expect from making this decision.  Which one of the following would not be considered an advantage of domestic production?

A)Better control over costs
B)Better control over quality
C)Do not have to face competition  
D)Better control over deliveries
E)Knowledge of the product provides efficiency advantages

Question 65

Scenario - Jenkins and Jones Corporation Michael Jenkins and Emma Jones started the Jenkins and Jones Corporation in 1976 in Kansas, USA.  The initial goal of this company was to serve customers throughout the United States.  Since the company's inception it has grown at an outstanding rate.  It now serves online customers as well as customers in ten foreign nations.  Jenkins and Jones is now looked at as the industry's benchmark company due to its superior supply chain management skills.  Its practices and techniques are used by many other organizations in the industry to improve their own supply chain management skills. As the Jenkins and Jones Corporation continues to grow, it will face the need to make more and more strategic decisions.  Which one of the following best describes the corporation if it decides to make purchase globally versus domestically?    

A)Global proliferation
B)Global procurement  
C)Domestic outsourcing
D)Global production
E)Enterprise resource planning

Question 66

Scenario - Ardella Enterprises Twenty years ago two people from New Jersey, USA had a dream of building a superior company that would have global operations with an unparalleled supply chain.  The idea took root and Ardella Enterprises was born.  This company conducts operations across four continents.  It has earned a reputation for prompt deliveries, accurate shipments, and exemplary customer service.  This partnership is quickly taking the lead in the industry and is contemplating further expansion. Ardella Enterprises grossed over $11 billion last year.  Its plan for additional expansion and growing Internet influence is projected to increase sales by two billion dollars within the first year. Ardella Enterprises is renowned for its operations management otherwise described as the management of the direct resources involved in the production system of the company.  Which one of the following would not be considered a business function associated with the activities of operations management?    

A)Production
B)Logistics
C)Procurement
D)Dual sourcing
E)Research and development