Deck 15: Global Operations and Supply Chain Management

Question 1

International freight,insurance,and packing can add as much as 8 to 10 percent to the quoted price,depending on the sales term used.

Answer 1

False

Question 2

The primary reason for sourcing globally is to obtain lower prices.

Answer 2

True

Question 3

For purchases of capital goods such as manufacturing equipment,many U.S.buying organizations now use "business-cycle costing" to analyze purchasing decisions.

Answer 3

False

Question 4

Outsourcing decisions,except for the decision to use global sources of supply,are extensions of the make-or-buy decisions of earlier era.

Question 5

Emerging industry-based B2B exchanges can help optimize the supply chain across an entire network of organizations,not merely within a single company.

Question 6

In U.S.industry,the proportion of purchased materials in the overall cost of goods sold has been rising for several decades.

Question 7

Supply chains are an integral part of global quality and cost management initiatives,since a typical company's supply chain costs can represent over 80 percent of assets.

Question 8

To avoid an increase in price because the U.S.dollar has lost value versus the Euro,an American importer should require European exporters to quote their products in Euros.

Question 9

Effective supply chain management can enhance a company's ability to manage regulatory,social,and other environmental pressures,both within a nation and globally.

Question 10

While indirect production-oriented goods have been the focus of management attention for many years,the purchasing of goods and services that are part of finished goods-termed indirect procurement-is also critical.

Question 11

In many companies,the purchasing function has been viewed as prime candidate for outsourcing to other firms,a trend encouraged by rapid developments in E-procurement.

Question 12

Indirect procurement includes such items as maintenance,repair,raw materials and components,office equipment,and other services and supplies.

Question 13

An important consideration in design is the extent to which the international company's products and services will be standardized across nations or regions.

Question 14

Outsourcing is the relocation of some or all of a business' activities or processes to a foreign location.

Question 15

When possible,it is better for companies to initially outsource complex activities in order to achieve better cost benefits.

Question 16

Because inventory is carried at each stage in the supply chain,and because inventory ties up money,it has been argued that the ultimate goal of effective supply chain management systems is to reduce inventory.

Question 17

As discussed in the text,global sourcing arrangements include overseas joint ventures,independent overseas manufacturers,and wholly owned subsidiaries.

Question 18

According to the text,the process of coordinating and integrating the flow of materials,information,finances,and services within and among companies in the value chain is called operations management.

Question 19

According to the text,outsourcing is hiring others to do noncore activities.

Question 20

The "over-the-wall" approach to product design involves an initial step in which the designers prepare the product's design,followed by sending the newly created design to the company's manufacturing engineers.

Question 21

Production methods between capital-and labor-intensive methods are classified as intermediate technology.

Question 22

Commonly,in designing plants for developing countries,engineers will use a hybrid of capital-intensive processes when they are considered essential to ensure product quality and labor-intensive processes to take advantage of the abundance of skilled labor.

Question 23

Although engineers are required for the maintenance of specialized machinery,only highly-skilled people are needed to attend the machines.

Question 24

Some of the reasons for the global standardization of a firm's manufacturing system are the effects on organization and staffing.

Question 25

When a country needs new job creation,it follows that government officials will insist on the use of labor-intensive processes.

Question 26

When production equipment is similar,home office control of quality in foreign affiliates is more difficult because management must ensure that all plants adhere to the same standard.

Question 27

The standardization of processes and machinery provides a reasonable guarantee that parts manufactured in the firm's various plants will be interchangeable.

Question 28

Generally,it is easier for international firms to standardize the concepts of total quality management and synchronous manufacturing in their foreign plants than it is to standardize the actual production facilities.

Question 29

Logistics refers to managerial functions associated with the movement of raw materials and work in progress,but not finished goods.

Question 30

The traditional functions of purchasing,such as supplier determination,analysis and selection,have to be accomplished before the actual purchasing via e-procurement.

Question 31

Although international firms maintain manufacturing facilities in countries at various levels of development,manufacturing systems should not vary significantly within the same company.

Question 32

Manufacturing rationalization is a division of production among a number of production units,thus enabling each to produce only a limited number of components for all of a firm's assembly plants.

Question 33

Computer-integrated manufacturing reduces the economic batch quantity to one and facilitates the potential for mass customizaton.

Question 34

Worldwide uniformity or standardization in manufacturing methods hinders headquarters' effectiveness in keeping production specifications current.

Question 35

The effectiveness of supply chain management efforts is strongly influenced by how a company manages the interface of logistics with sourcing and manufacturing.

Question 36

Intermediate technology will create more jobs and require less capital than will capital-intensive processes.

Question 37

Unless a product or service is purchased from a company that is registered to the appropriate ISO 9000 standard,a buyer cannot be assured that the quality of what was received will be what was expected.

Question 38

Packaging and transportation requirements for a product can significantly influence logistics costs,and these factors should be addressed during the post-design steps in a company's value chain.

Question 39

Backward vertical integration establishes facilities to manufacture inputs used in the production of a firm's final product.

Question 40

Standards are documented agreements containing general guidelines,rules,or definitions of the characteristics of a product,process,or service.

Question 41

A traditional approach to product design,which involves a sequential approach to design,has been termed:

A)product-based design.
B)concurrent engineering.
C)over-the-wall.
D)sequenced design.
E)participative design.

Question 42

The local manufacturing organization is usually integrated vertically to a greater extent than the parent company is.

Question 43

The following arrangement can provide a firm with foreign products:

A)domestic subsidiary.
B)wholly owned subsidiary.
C)foreign sales office.
D)joint-venture.
E)strategic alliance..

Question 44

The production organization in an overseas subsidiary is commonly a scaled down version of that found in the parent company.

Question 45

It has been estimated that at least ____ percent of products currently on the market were not available 5 years ago,creating additional pressure to locate suppliers worldwide that can provide inputs at competitive prices and quality and with quick responsiveness to market changes.

A)30
B)45
C)50
D)55
E)60

Question 46

According to the text,it has been argued that the ultimate goal of effective supply chain management systems is to:

A)reduce costs.
B)improve quality.
C)reduce inventory.
D)increase sales.
E)increase standardization.

Question 47

Efforts to improve the efficiency and effectiveness of a firm's international operations are often referred to as:

A)offshoring.
B)outsourcing.
C)supply chain management.
D)subcontracting.
E)joint-venture.

Question 48

Activities that are involved in producing a company's products and services and how these activities are linked together are often referred to as:

A)value chains.
B)supply chains.
C)organization design.
D)operations management.
E)subcontracting.

Question 49

According to the text,including such items as maintenance,repair,operating supplies,office equipment,and other services and supplies,indirect procurement can account for as much as what percent of the total purchasing expenditures in companies?

A)15 percent
B)30 percent
C)50 percent
D)70 percent
E)80 percent

Question 50

The following arrangement can provide a firm with foreign products:

A)overseas joint venture.
B)overseas independent contractor.
C)foreign sales office.
D)Overseas joint venture and an overseas independent contract.E.joint-venture.

Question 51

The approach to design,which promotes cross-functional participation in the design stage:

A)helps to identify many of the potential sourcing,manufacturing and other difficulties associated with a particular design.
B)may involve customers in the design process.
C)has been called "concurrent engineering".
D)helps to identify many of the potential sourcing,manufacturing difficulties associated with a particular design,and may involve customers in the process,and is also called "concurrent engineering".
E)may not involve potential customers in early design process.

Question 52

A typical company's supply chain costs can represent more than ____ percent of assets.

A)20
B)35
C)50
D)60
E)80

Question 53

According to the text,increased emphasis on the achievement of effective supply chain performance has resulted from:

A)shorter,more predictable product life cycles.
B)the impact of unplanned political and social events.
C)Web-enabled tools for planning,executing and optimizing supply chains.
D)longer,more unpredictable product life cycles.
E)the impact of unplanned political and social events and Web-enabled tools for planning,executing and optimizing supply chains.

Question 54

A reason that outsourcing has become an increasingly common option for companies is:

A)it helps companies to focus scarce resources on their core competencies.
B)it avoids problems of different languages or cultures.
C)it enhances flexibility.
D)it helps companies to focus scarce resources on their core competencies and it enhances flexibility.
E)it enhances customer interaction.

Question 55

Reasons for sourcing globally include:

A)a lower price.
B)products not available locally.
C)a firm's worldwide operation and quality.
D)a lower price,products not available locally,and a firm's worldwide operation and quality.

Question 56

Relocating some or all of a business' activities or processes to a foreign location is:

A)offshoring.
B)outsourcing.
C)supply chain management.
D)subcontracting.
E)joint-venture.

Question 57

Investigation of export and import data shows:

A)there is a strong relationship between global sourcing and ownership of the foreign sources.
B)there is no relationship between global sourcing and ownership of the foreign sources.
C)that American firms,but not Japanese firms,buy from their U.S.subsidiaries.
D)American firms import twice as much from their overseas subsidiaries than foreign firms import from their U.S.affiliates.
E)American firms import thrice as much from their overseas subsidiaries than foreign firms import from their U.S.affiliates.

Question 58

A reason that outsourcing has become an increasingly common option for companies is:

A)the cost of communications is plummeting.
B)more automation of a company's operational activities.
C)more companies are competing for outsourcing business.
D)very few companies are competing for outsourcing business.
E)the cost of communications is plummeting,more automation of a company's operational activities,and more companies are competing for outsourcing business.

Question 59

In U.S.industry,the proportion of purchased materials in the overall cost of goods sold has been rising for several decades,to a level of ________ percent today.

A)40
B)45 to 60
C)55 to 79
D)65 to 74
E)over 80

Question 60

Hiring others to perform some of the noncore activities and decision making in a company's value chain,rather than having the company and its employees continue to perform these tasks is:

A)offshoring.
B)outsourcing.
C)supply chain management.
D)subcontracting.
E)joint-venture.

Question 61

When designing production facilities,designers generally find that:

A)automated machinery is severely limited in flexibility regarding product variety and sizes.
B)general-purpose machines require skills that are built into a special-purpose machine.
C)they have to choose between low-output specialized machinery and higher-output,general-purpose machines.
D)general-purpose machines do not require skills that are built into a special-purpose machine.
E)that automated machinery is severely limited in flexibility regarding product variety and sizes,and general-purpose machines require skills that are built into a special-purpose machine.

Question 62

Backward vertical integration refers to:

A)the purchase of competitive firms.
B)the installation of production facilities to produce inputs for the production of final products.
C)the placing of minorities in charge of production processes.
D)the installation of production facilities to consume the outputs of the production system.

Question 63

Intermediate technology is:

A)technology between the capital- and labor-intensive processes.
B)synonymous with necessary technology.
C)older technology previously used by multinationals.
D)synonymous with cutting edge technology.

Question 64

Manufacturing rationalization is:

A)the allocation of scarce resources.
B)the division of production among several subsidiaries so that each produces only a limited number of components for all subsidiaries.
C)the concentration of production at one site to get economies of scale.
D)the production by a subsidiary for its own national market.

Question 65

Global standardization of operations:

A)eliminates the task of maintenance and production control.
B)allows home office personnel to quickly spot deviations from the norm.
C)enables reasonably accurate forecasts of time required to obtain permits and erect plants.
D)promotes the task of maintenance and production control.
E)enables inaccurate forecasts of time required to obtain permits and erect plants.

Question 66

For purchases of capital goods such as manufacturing equipment,many U.S.buying organizations now use _____ to analyze purchasing decisions,including trade-in or future estimated salvage value.

A)e-procurement.
B)activity-based costing.
C)total costing.
D)life-cycle costing.
E)e-logistics.

Question 67

Managerial functions associated with the movement of materials such as raw materials,work in progress,or finished goods are referred to as:

A)standards.
B)processes.
C)logistics.
D)value chains.
E)marketing mix.

Question 68

Quality control in foreign affiliates from the home office is less difficult when:

A)the quality inspectors are trained in the home office.
B)separate standards are used in each plant.
C)production equipment is similar.
D)the quality reports are sent to the home office at the same time.
E)homogenous standards are used in each plant.

Question 69

Documented agreements containing technical specifications or other precise criteria that will be used consistently as guidelines,rules,or definitions of the characteristics of a product,process,or service are referred to as:

A)standards.
B)processes.
C)logistics.
D)value chains.
E)marketing standards.

Question 70

Electronic procurement exchanges:

A)can facilitate efforts to obtain letters of credit.
B)can permit bid/quote systems for buyers and suppliers.
C)protect companies from potential loss of proprietary data.
D)can facilitate efforts to obtain letters of credit,and permit bid/quote systems for buyers and suppliers.
E)can facilitate efforts to obtain letters of debit.

Question 71

According to the text,the cost of importing a foreign sourced product:

A)is insignificant.
B)may range from 26% to 110% of the cost of the product.
C)may range from 10% to 12% of the cost of the product.
D)may not be charged if the terms of sale are CIF,port of entry.
E)may range from 43% to 143% of the cost of the product.

Question 72

Problems associated with e-procurement include:

A)it cannot be isolated from the company's overall business system.
B)it must be completed before the firm can engage in other purchasing functions,such as supplier determination and analysis.
C)It can expose the company to a wide range of potential security issues.
D)It can expose the company to a wide range of potential environmental hazards.
E)that it cannot be isolated from the company's overall business system,and it can expose the company to a wide range of potential security issues.

Question 73

Research found that suppliers cut invoice and ordering errors by an average of ___ percent when using an e-marketplace.

A)10
B)24
C)37
D)56
E)69

Question 74

What is supply chain management and why is it an important issue for a company's international competitiveness?

Question 75

Mass customization:

A)is enhanced by a company's use of computer-aided manufacturing systems to produce and deliver products and services in a batch size of one.
B)is usually appropriate in situations where there is the potential for differentiating a product for a particular customer.
C)typically requires the company to reconceptualize the design of its products as well as the design and integration of the processes used for producing and delivering the product to customers.
D)is enhanced by use of computer-aided systems to produce and deliver products and services in batch of one,it is also appropriate when there is potential for differentiating a product for a customer,and requires reconceptualizing the design of products,the design and integration of the processes used.
E)is usually not appropriate in situations where there is the potential for differentiating a product for a particular customer. Mass customization is enhanced by a company's use of computer-aided manufacturing systems to produce and deliver products and services in batch of one,is also appropriate in situations where there is potential for differentiating a product for a customer,and requires the company to reconceptualize the design of its products,the design and integration of the processes used.

Question 76

What are the reasons for sourcing globally,and what options are available to a firm that wishes to engage in global sourcing?

Question 77

Reasons for global standardization of manufacturing systems include:

A)simpler organization at headquarters.
B)less design time required for a new plant.
C)easier and more cost-effective purchasing.
D)include simpler organization at headquarters,less design time required for a new plant,and easier and more cost-effective purchasing.
E)less time required in travelling. Reasons for global standardization of manufacturing systems include simpler organization at headquarters,less design time required for a new plant,and easier and more cost-effective purchasing.

Question 78

What are the options for global electronic procurement and what are the benefits of such systems?

Question 79

Why is the design of products and services important to global supply chain management and what are the main design alternatives that are available?

Question 80

ISO 9000:

A)Is the most-used standard for quality in the United States.
B)Is a set of five universal standards for a quality assurance system agreed to by the ISO.
C)Ensures product quality.
D)Ensures timely delivery.
E)Is the most-used standard for quality in the China.