Deck 15: Managing International Operations

Question 1

Deciding the sequence of operations a company will use to create its product is called ________.

A) product planning
B) capacity planning
C) location economies
D) process planning

Answer 1

D

Question 2

Scenario: Wilson Industries Inc.
Wilson Industries Inc. is a multinational firm that designs and produces premium leather bags for major destinations worldwide. The company's board of directors is meeting to discuss changes that might be needed in the company's operations.
The board plans to examine Wilson's ability to produce enough bags to satisfy their customers' demands.This evaluation is known as ________.

A) capacity planning
B) process planning
C) lean production
D) product structure modeling

Answer 2

A

Question 3

Scenario: Wilson Industries Inc.
Wilson Industries Inc. is a multinational firm that designs and produces premium leather bags for major destinations worldwide. The company's board of directors is meeting to discuss changes that might be needed in the company's operations.
The board will also examine new production techniques the company could use to create its product.This examination is a part of ________.

A) capacity planning
B) process planning
C) facilities location planning
D) centralized production

Answer 3

B

Question 4

Which of the following will a company that is pursuing a low-cost leadership strategy most likely use for creating its product?

A) implement handcrafted artisanship
B) manufacture in large production batches
C) manufacture components in-house
D) customize products for each customer

Question 5

The process of assessing a company's ability to produce enough output to satisfy market demand is called ________.

A) capacity planning
B) lean production
C) process management
D) product structure modeling

Question 6

A British toy company manufactures all of its product lines in a single facility in Europe.Which of the following is the company demonstrating?

A) continuous production
B) lean production
C) centralized production
D) horizontal integration

Question 7

Deciding the spatial arrangement of production processes within production units is called ________.

A) facilities layout planning
B) capacity planning
C) process planning
D) location economies

Question 8

A company that sells undifferentiated products in all their markets and do not need to locate near their markets in order to stay on top of changes in buyer preferences use ________.

A) vertical integration
B) centralized production
C) lean production
D) continuous production

Question 9

Scenario: Wilson Industries Inc.
Wilson Industries Inc. is a multinational firm that designs and produces premium leather bags for major destinations worldwide. The company's board of directors is meeting to discuss changes that might be needed in the company's operations.
If Wilson Industries selects a new area for its production units,the company will be implementing ________.

A) capacity planning
B) process planning
C) facilities location planning
D) product structure modeling

Question 10

An Asian jewelry company maintains production facilities in South Korea,Vietnam,and Malaysia.Which of the following is the company exemplifying?

A) lean production
B) decentralized production
C) vertical integration
D) continuous production

Question 11

The centralization of production facilities is a typical policy for companies that pursue ________.

A) horizontal integration
B) product differentiation
C) a global strategy
D) a multinational strategy

Question 12

Kathleen,a manager at Parker Airline,has the responsibility of deciding how many passengers Parker Airline can serve at a given time.Kathleen is most likely involved with ________.

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

Question 13

Which of the following determines the process that a company will use to create its product?

A) a firm's multinational strategy
B) a firm's global strategy
C) a firm's corporate-level strategy
D) a firm's business-level strategy

Question 14

________ refers to the concentration of production facilities in one location.

A) Lean production
B) Continuous production
C) Centralized production
D) Horizontal integration

Question 15

Which of the following terms refers to the decision of whether to produce a component internally or to outsource it from another company?

A) buyer decision process
B) decision problem
C) per curiam decision
D) make-or-buy decision

Question 16

Companies with decentralized production facilities are often pursuing ________ strategies.

A) low-cost
B) differentiation
C) retrenchment
D) combination

Question 17

________ refers to a situation in which facilities are spread over several locations,with one facility for each national business environment in which the company markets its products.

A) Continuous production
B) Decentralized production
C) Vertical integration
D) Lean production

Question 18

The decentralization of production facilities is a typical policy for companies that pursue ________.

A) a multinational strategy
B) a global strategy
C) mass customization
D) vertical integration

Question 19

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

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

Question 20

Which of the following factors has the least effect on facilities layout planning?

A) supply of land in a nation
B) cost of land in a nation
C) a firm's production process
D) age of the company

Question 21

Which of the following reasons encourages companies to make a product rather than buy it?

A) Making a product gives managers greater control over the production process.
B) Making a product lowers the risk associated with the production process.
C) Making a product increases the company's flexibility to respond to market conditions.
D) Making a product gives companies a great deal of power in their relationships with suppliers.

Question 22

Describe the production managers' decision regarding whether to centralize or decentralize production facilities,and explain the benefits of vertical integration.

Question 23

Supply issues (location and availability of vendors)are also important in location planning.

Question 24

Availability and cost of labor in the local market is crucial to capacity planning.

Question 25

Worker productivity tends to be lower in most developing nations than in developed nations.

Question 26

Differentiation strategies demand that producers provide extra value by offering customers something unique,such as superior quality,added features,or special brand images.

Question 27

Companies strive toward quality improvements for attaining economies of scale.

Question 28

The particular process to be used to create products is typically determined by a firm's corporate-level strategy.

Question 29

How is process planning affected by a company's business-level strategy? How can outsourcing lower risk for firms?

Question 30

Capacity planning applies only to manufacturing companies.

Question 31

The process by which a company extends its control over additional stages of production is called ________.

A) a push strategy
B) a pull strategy
C) vertical integration
D) horizontal integration

Question 32

Which of the following reasons encourages companies to buy a product rather than make it?

A) Buying a product gives managers greater control over the production process.
B) Buying a product increases the company's total costs significantly compared to making the product in-house.
C) Buying a product ensures non-flexibility to local market conditions.
D) Buying a product enables a company to gain a great deal of power in their relationships with suppliers.

Question 33

The process of assessing a company's ability to produce enough output to satisfy market demand is called capacity planning.

Question 34

Discuss the standardization versus adaptation decision for managers when considering production facilities,and describe considerations for managers when acquiring fixed assets.

Question 35

The process by which a company extends its control over additional stages of production is called vertical integration.

Question 36

Scenario: Hafstrom Motors
Based in Kentucky, Hafstrom Motors has always used spare parts made in America for its automobiles. However, sales and profits have slumped over the past three years. A senior manager at the company comes up with new strategies for improving the firm's production activities.
The senior manager recommends that Hafstrom obtain auto parts from a country where production activities would generate more value than it would generate elsewhere.He wants to take advantage of ________.

A) just-in-time manufacturing
B) facilities layout planning
C) process planning
D) location economies

Question 37

Scenario: Wilson Industries Inc.
Wilson Industries Inc. is a multinational firm that designs and produces premium leather bags for major destinations worldwide. The company's board of directors is meeting to discuss changes that might be needed in the company's operations.
If the board discusses the spatial arrangement of production processes within Wilson's production facilities,they will be engaging in ________.

A) capacity planning
B) facilities location planning
C) process planning
D) facilities layout planning

Question 38

It is important for low-cost competitors to locate near their markets in order to keep track of buyer preferences.

Question 39

Explain the process of facilities location planning.What issues must companies consider while selecting the location for their production facilities?

Question 40

Companies selling undifferentiated products find centralized production most effective.

Question 41

Which of the following processes will a computer assembling firm engage in if it decides to manufacture its own monitors and printers?

A) outsourcing
B) vertical integration
C) niche marketing
D) lean production

Question 42

Scenario: Hafstrom Motors
Based in Kentucky, Hafstrom Motors has always used spare parts made in America for its automobiles. However, sales and profits have slumped over the past three years. A senior manager at the company comes up with new strategies for improving the firm's production activities.
The senior manager argues that Hafstrom could reduce its costs significantly by purchasing parts from companies located overseas rather than producing its own parts.Which of the following is the senior manager advocating?

A) outsourcing
B) a greenfield investment
C) lean production
D) vertical integration

Question 43

Storage facilities,retail outlets,and production equipment in the host country are examples of ________.

A) liquid assets
B) current assets
C) fixed assets
D) intangible assets

Question 44

________ will enable a company to reduce the degree to which it is vertically integrated and the overall amount of specialized skills and knowledge that it would have to possess.

A) Outsourcing
B) Skimming
C) Lean production
D) Centralized production

Question 45

A company often undertakes in-house production when it can manufacture a product for less than it must pay another business to produce it.

Question 46

________ manufacturing is any manufacturing that takes place in a country different from the home country.

A) Offshore
B) Multidomestic
C) Cost-minimization
D) Outsourcing

Question 47

Scenario: Audio Component Outsourcing
Echo Corporation manufactures high-quality audio components, such as speakers, amplifiers, and receivers, for home entertainment systems. Echo has been losing market share in recent years due to the competitive pricing of other audio component manufacturers that engage in outsourcing. Echo managers are attempting to convince Nathan Douglas, the firm's founder and CEO, that outsourcing would enable the firm to be more competitive without sacrificing quality.
Which of the following most likely supports the argument of Echo managers to outsource some of the firm's manufacturing activities?

A) Echo managers could reduce the wages of U.S. based employees and sub-contractors.
B) Echo could save money by reducing the costs incurred in manufacturing the component parts.
C) Echo managers could implement a marketing campaign for foreign markets that is identical to the outsourced firm's marketing campaign.
D) Echo could merge with one of its U.S.-based competitors to gain a larger market share.

Question 48

Which of the following is established by a company that has the option of either (1)acquiring or modifying existing factories or (2)building entirely new facilities?

A) a divestiture
B) a shadow economy
C) a greenfield investment
D) a shell corporation

Question 49

Outsourcing refers to the practice of buying from another company a good or a service that is part of a company's value-added activities.

Question 50

Computer companies buying hardware components from component-makers,assembling them in their own facilities,and selling completed systems to consumers and businesses is an example of ________.

A) telecommuting
B) franchising
C) outsourcing
D) licensing

Question 51

A fixed asset can also be referred to as a ________ asset.

A) liquid
B) current
C) tangible
D) trading account

Question 52

Companies make products rather than buy them in order to reduce total costs.

Question 53

Today,due to improved technology,it is fairly easy to persuade an outside supplier to make significant modifications to a component.

Question 54

Scenario: Audio Component Outsourcing
Echo Corporation manufactures high-quality audio components, such as speakers, amplifiers, and receivers, for home entertainment systems. Echo has been losing market share in recent years due to the competitive pricing of other audio component manufacturers that engage in outsourcing. Echo managers are attempting to convince Nathan Douglas, the firm's founder and CEO, that outsourcing would enable the firm to be more competitive without sacrificing quality.
Which of the following should most likely be considered in making the decision to outsource some of Echo's manufacturing activities?

A) Do purchasing components present the lowest cost option for Echo?
B) Would Echo engineers be willing to relocate to a foreign nation?
C) Is Echo prepared to cover moving expenses for its managerial talent?
D) Can Echo find employees for a customer service center in the U.S.?

Question 55

Which of the following statements is true of outsourcing?

A) It reduces economic risk by facilitating the purchase of large insurance policies.
B) It reduces production risk by eliminating delays in the timely receipt of needed parts.
C) It reduces political risk by enabling the company to avoid investing in plants and equipment abroad.
D) It reduces currency risk by allowing the company to invest the home currency on in-house production facilities.

Question 56

Which of the following is a barrier to buying products from international suppliers?

A) extremely low tariffs
B) additional transportation costs
C) lower flexibility to respond to market conditions
D) high political risk

Question 57

One reason to buy a product instead of making it in-house is the greater flexibility to respond to market conditions.

Question 58

________ in the computer industry is the outsourcing of the actual assembly of computers plus the job of shipping them to distributors and other intermediaries.

A) Agile manufacturing
B) Just in time manufacturing
C) Lean manufacturing
D) Stealth manufacturing

Question 59

A firm that buys from another company a good or service that is part of the firm's value-added activities is practicing ________.

A) outsourcing
B) vertical integration
C) horizontal integration
D) lean production

Question 60

Scenario: Hafstrom Motors
Based in Kentucky, Hafstrom Motors has always used spare parts made in America for its automobiles. However, sales and profits have slumped over the past three years. A senior manager at the company comes up with new strategies for improving the firm's production activities.
The top management of the company contends that Hafstrom would benefit most from manufacturing its own parts,rather than sourcing it from elsewhere,even if they are made at another location overseas.Which of the following is being recommended in this approach?

A) just-in-time manufacturing
B) location economies
C) vertical integration
D) outsourcing

Question 61

A loan in which a parent company deposits money with a host-country bank,which then lends the money to a subsidiary located in the host country is called a ________.

A) syndicated loan
B) back-to-back loan
C) mortgage loan
D) title loan

Question 62

Which of the following statements is true regarding the ISO 9000 standards?

A) They specify details on how companies should develop its quality processes.
B) The standards are applicable to Asia exclusively.
C) ISO 9000 is a certification that companies get for their environment-friendly initiatives.
D) The standards require each company to define and document its own quality processes.

Question 63

What role does flexibility play in the make-or-buy decision?

Question 64

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

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

Question 65

Total quality management reduces the responsibility on each individual in the production process.

Question 66

What are the guidelines that provide the basis for quality certification called?

A) WTO standards
B) ISO 1000
C) ISO 9000
D) TQM standards

Question 67

When a market is experiencing rapid growth,a company will ________.

A) emphasize on decruitment
B) divest its operations
C) reinvest in its operations
D) implement retrenchment strategies

Question 68

Which of the following types of money adds to the volatility of emerging markets because it can be quickly withdrawn from its investment?

A) hot money
B) patient money
C) key money
D) fiat money

Question 69

Discuss why companies strive toward quality improvement and the two methods of doing so.

Question 70

American Depository Receipts (ADRs)are ________.

A) certificates that represent shares of stock in American companies
B) dollar deposits made by foreign firms conducting business in the U.S.
C) certificates that trade in the U.S. and represent shares of stock in a non-U.S. company
D) currency deposits made in the U.S. by firms based in other countries

Question 71

Which of the following is true of American Depository Receipts (ADRs)?

A) Investors who buy ADRs have to pay a currency-conversion fee.
B) There is a minimum purchase requirement for ADRs.
C) Companies offer ADRs in the U.S. to appeal to mutual funds.
D) ADRs are listed and traded in London and Luxembourg.

Question 72

A company using just-in-time (JIT)manufacturing involves ________.

A) increased availability of components in large inventories
B) quicker detection of defective materials and components
C) easier training of sales staff regarding product descriptions
D) benefits stemming from combining several Japanese technologies

Question 73

________ is an integrated effort to systematically and continuously improve the quality of an organization's products and/or services.

A) Total quality management
B) Quality-of-life index
C) Integrated business planning
D) Organizational restructuring

Question 74

Describe the issues involved in the decision of how a company acquires raw materials and fixed assets.

Question 75

________ is the financing obtained from investors who believe the borrower will experience rapid growth and who receive equity in return for their investment.

A) Internal funding
B) Venture capital
C) Credit derivative
D) Mortgage loan

Question 76

Which of the following would companies do in markets that require long payback periods?

A) divest operations
B) implement retrenchment strategies
C) emphasize on decruitment
D) reinvest profits

Question 77

________ is the term used to refer to a production technique in which inventory is kept to a minimum and inputs to the production process arrive exactly when they are needed.

A) Just-in-time manufacturing
B) Lean manufacturing
C) Continuous production
D) Flow production

Question 78

________ are traded in Luxembourg and London and represent a specific number of shares in an outside company.

A) Common stock
B) Bills of lading
C) Revocable letters of credit
D) Global Depository Receipts

Question 79

________ refers to the foreign direct investment in factories,equipment,and land that cannot be pulled out of the market quickly.

A) Hot money
B) Patient money
C) Fiat money
D) Key money

Question 80

Which of the following statements is true regarding total quality management (TQM)?

A) TQM emphasizes on a single effort at the start to improve the quality of its products.
B) TQM largely increases the responsibility on each individual to focus on quality.
C) TQM philosophy initially took hold in the U.S.
D) TQM applies solely to an employee's activities based inside a factory.