Question 1

Two product factors impact location decisions. These are (1) whether the product serves universal needs and (2)

Accepted Answer

Product value-to-weight ratio is an important factor in location decisions because it impacts transportation costs. Products with a high value-to-weight ratio are typically transported by air, which can be more expensive, while products with a low value-to-weight ratio can be transported by sea or land. This consideration becomes important in deciding whether to locate a production facility near the market or near the source of raw materials.

Question 2

According to the textbook, _________________ manufacturing technologies provide a company the ability to produce a wider variety of end products at a unit cost that at one time could be achieved only through the mass production of a standardized output.

Accepted Answer

The textbook describes flexible manufacturing technologies as providing a company the ability to produce a wider variety of end products at a unit cost that at one time could be achieved only through the mass production of a standardized output.

Question 3

There are two basic strategies for locating manufacturing facilities.These are:

Accepted Answer

Concentrating manufacturing facilities in the optimal location and serving the world market from there can lead to economies of scale and efficiency gains. However, decentralizing them in various regional or national locations that are close to major markets can also help to reduce transportation costs, tariffs, and other trade barriers. This approach allows firms to better respond to local customers' needs and tailor their products or services to local markets.

Question 4

Placing manufacturing facilities in one concentrated location makes sense for all of the following reasons except:

Accepted Answer

Placing manufacturing facilities in one concentrated location makes sense when trade barriers are low, as it allows for easier exportation and transportation of goods. However, if trade barriers are high, it may be more beneficial to have manufacturing facilities in various locations to avoid these barriers.

Question 5

Two product factors impact location decisions.These are:

Accepted Answer

The product's value-to-weight ratio is important because it affects transportation costs. Products with high value and low weight can be transported cost-effectively over long distances, whereas products with low value and high weight are often better produced closer to the market they will serve. The product serving universal needs is also important because it ensures that demand for the product will be consistent across different locations, making it easier to justify setting up production facilities in different areas.

Question 6

Many electronic components and pharmaceuticals have _________________ value-to-weight ratios, whereas refined sugar, paint, and petroleum products have ________________ value-to-weight ratios.

Accepted Answer

Electronic components and pharmaceuticals are high-value products with low weight, while refined sugar, paint, and petroleum products are low-value products with high weight.

Question 7

In terms of making a location decision, when fixed costs are substantial, the minimum efficient scale of production is high, and flexible manufacturing technologies are available, it makes sense to:

Accepted Answer

When fixed costs are substantial, it is more cost-effective to concentrate production at a few choice locations to achieve economies of scale. By producing at a larger scale, it is possible to spread the fixed costs over a larger number of units, leading to lower unit costs. Additionally, if the minimum efficient scale of production is high, it might not be feasible to produce in many small locations without incurring a high cost per unit. Finally, the availability of flexible manufacturing technologies means that production can be easily adjusted to meet demand changes, making it easier to rely on a few locations.

Question 8

_________________ customization implies that a firm may be able to customize its product range to suit the needs of different customer groups without bearing a cost penalty.

Accepted Answer

Mass customization allows a company to produce goods and services to meet individual customer needs with near mass production efficiency, meaning they can customize their products for different customer groups without a significant increase in cost.

Question 9

Which of the following is not one of the objectives of flexible manufacturing technology, or lean production?

Accepted Answer

Bringing a factory into compliance with ISO 9000 is not one of the objectives of flexible manufacturing technology or lean production. While ISO 9000 is a quality management standard, it is not specific to the concept of lean production or flexible manufacturing technology. The other options listed are all objectives of lean production or flexible manufacturing technology.

Question 10

When is decentralization of manufacturing appropriate?

Accepted Answer

Decentralization of manufacturing is appropriate when trade barriers are high, as it allows a company to produce goods within a specific market, avoiding tariffs and import restrictions.

Question 11

Concentration of manufacturing makes sense when:

Accepted Answer

When the product's value-to-weight ratio is high, concentrating manufacturing in one location makes sense because it reduces transportation costs. Products with high value-to-weight ratios are expensive relative to their weight, such as electronics and jewelry. This also allows companies to take advantage of economies of scale and reduces production costs.

Question 12

Initially, many foreign factories are established where:

Accepted Answer

Foreign factories are often established in countries where labor costs are low in order to save on manufacturing expenses. This is a common strategy for companies looking to increase their profit margins.

Question 13

All of the following are advantages of flexible manufacturing except:

Accepted Answer

The statement "flexible manufacturing technologies help firms standardize products for different national markets" is not an advantage of flexible manufacturing, as standardization may contradict the idea of flexibility. The other statements are advantages of flexible manufacturing.

Question 14

What refers to the ability to produce a wider variety of end products at a unit cost that at one time could be achieved only through the mass production of a standardized output?

Accepted Answer

Mass customization refers to the ability to produce a wider variety of end products at a unit cost that at one time could be achieved only through the mass production of a standardized output. This involves combining the benefits of mass production processes with customization to meet individual customer needs.

Question 15

Decentralization of the location of a firm's manufacturing locations makes sense for all of the following reasons except:

Accepted Answer

Decentralization is less about trade barriers being low and more about managing risks and exploiting local advantages. When trade barriers are low, it can actually be more efficient to centralize production in a location with the best comparative advantage and export to other countries, rather than decentralizing manufacturing.

Question 16

Needs that are the same all over the world are referred to as ______________ needs.

Accepted Answer

Universal needs refer to basic needs that are shared by all individuals regardless of their cultural or geographical background. Examples of universal needs include food, shelter, clothing, and safety. These needs are considered fundamental and essential for survival, and are the same across different cultures and societies.

Question 17

The following two factors that correctly depict the manufacturing attributes of a product that has universal needs are

Accepted Answer

Since there are few national differences in consumer taste and preferences for products that have universal needs, the need for local responsiveness is reduced. Therefore, manufacturing can be concentrated at an optimal location.

Question 18

One of Toyota's engineers, Ohno Taiichi, found many problems with the company's mass production system.Which of the following is not one of these problems?

Accepted Answer

The problem listed in option C, that the system ran too quickly resulting in employee frustration and high turnover, was not specifically mentioned as one of Ohno Taiichi's problems with the company's mass production system. The other options were mentioned as problems he found.

Question 19

What are manufacturing technologies that are designed to reduce setup times, increase use of individual machines through better scheduling, and improve quality control at all stages of manufacturing called?

Accepted Answer

The manufacturing technologies described in the question are key components of lean production. Lean production is a methodology that aims to eliminate waste and improve efficiency in all aspects of manufacturing. It includes techniques such as setup time reduction, improved scheduling, and quality control at all stages of production. Multifaceted, lateral, and temporal production are not established manufacturing methodologies, while six sigma is a separate quality control methodology that focuses primarily on reducing defects.

Question 20

What is a grouping of various types of machinery, a common materials handler, and a centralized cell controller?

Accepted Answer

The grouping of various types of machinery, a common materials handler, and a centralized cell controller is typically referred to as a flexible machine cell, making choice D the correct answer.

Quiz 15: Global Production, Outsourcing, and Logistics