Question 1

Define the term "materials management." Discuss the relationship between materials management and logistics.

Accepted Answer

The answer of Define the term "materials management." Discuss the...

Question 2

Technology unique to a firm is proprietary product technology.

Accepted Answer

Proprietary product technology is technology that is unique to a specific firm and is not readily available to its competitors.

Question 3

Needs that are the same all over the world are called global needs.

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Question 4

To economize on inventory holding costs by having materials arrive at a manufacturing plant just in time to enter the production process and not before is the basic philosophy of CAD.

Accepted Answer

The basic philosophy described is Just-In-Time (JIT) inventory management, not Computer-Aided Design (CAD). CAD refers to the use of computer systems to aid in the creation, modification, analysis, or optimization of a design.

Question 5

Concentrating a firm's manufacturing facilities in an optimal location and serving the world market from that single location makes sense when trade barriers are low.

Accepted Answer

When trade barriers are low, it becomes easier to transport goods across borders without incurring significant costs, making it more practical to concentrate a firm's manufacturing facilities in a single location and serve the global market from there. High trade barriers, on the other hand, can make it difficult to move goods across borders, forcing a firm to decentralize its manufacturing operations to meet local demand.

Question 6

Unique in their ability to help companies produce highly standardized products for a global clientele are flexible manufacturing technologies.

Accepted Answer

Flexible manufacturing technologies are designed to be adaptable, allowing companies to customize products and adjust production processes for different markets, rather than solely focusing on standardization for a global clientele.

Question 7

The greatest advantage of buying component parts from independent suppliers is that the firm can maintain its flexibility.

Accepted Answer

When a firm buys component parts from independent suppliers, it can easily switch between suppliers based on factors such as cost, quality, and lead time. This allows the firm to maintain its flexibility and adaptability, which is important in a dynamic business environment.

Question 8

Some businesses have been able to achieve the gains of vertical integration without encountering its problems by entering into strategic alliances with suppliers.

Accepted Answer

Strategic alliances with suppliers can allow businesses to benefit from vertical integration without necessarily needing to fully merge or acquire the supplier. This allows for greater collaboration and coordination between the two companies while also potentially reducing costs and improving efficiency.

Question 9

The arguments for concentrating production at a few choice locations are strong when fixed costs are substantial, the minimum efficient scale of production is high, and flexible manufacturing technologies are not available.

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Question 10

Increased utilization of JIT inventory systems, CAD, and CAM over the past 15 years seems to have decreased pressures for firms to establish long-term relationships with suppliers, but increased the pressure to establish short-term ones.

Accepted Answer

JIT, CAD, and CAM systems typically increase the need for long-term relationships with suppliers to ensure reliability, quality, and timely delivery, as these systems rely on precise coordination and integration with suppliers.

Question 11

Scheduling problems, for international businesses that source worldwide, are nonexistent, even though there is time and distance between the firm and its suppliers.

Accepted Answer

Scheduling problems can still arise, despite advancements in technology for communication and coordination, due to factors such as differing time zones, cultural differences, and unexpected disruptions in the supply chain.

Question 12

A product with a high value-to-weight ratio is expensive and does not weigh very much.

Accepted Answer

A high value-to-weight ratio means that the product is expensive in relation to its weight, so it is light and doesn't weigh very much.

Question 13

Flexible manufacturing technologies allow a company 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

Flexible manufacturing technologies provide the ability to produce a wider range of products at a cost that was only possible before through mass production of uniform output.

Question 14

The decision about whether a firm should make or buy the component parts that go into the final product is referred to as a sourcing decision.

Accepted Answer

This statement is true. The decision to make or buy parts is a sourcing decision.

Question 15

Pressures from the centre to improve a factory's cost structure and/or customize a product to the demands of consumers in a particular nation can start a chain of events that ultimately leads to development of additional capabilities at that factory.

Accepted Answer

Pressures to improve cost structure and customize products can lead to development of additional capabilities at a factory.

Question 16

When the product's value-to-weight ratio is high decentralizing a firm's manufacturing facilities in various regional or national markets that are close to major markets makes sense.

Accepted Answer

The answer of When the product's value-to-weight ratio is high...

Question 17

The benefits of manufacturing components in-house seem to be greatest when highly specialized assets are involved, when vertical integration is necessary for protecting proprietary technology, or when the firm is simply more efficient than external suppliers at performing a particular activity.

Accepted Answer

The statement accurately describes the benefits of in-house manufacturing in certain situations where the firm has specialized assets, requires vertical integration to protect proprietary technology, or is more efficient than external suppliers in performing a particular activity.

Question 18

Make-or buy decisions are even more problematic for international businesses.

Accepted Answer

International businesses have to consider additional factors such as transportation costs, import/export regulations, cultural differences, and exchange rate fluctuations when making make-or-buy decisions, which makes the decision even more complicated.

Question 19

A source of improvement in the capabilities of a foreign factory can be the indreasing abundance of advanced factors of production in the nation where the factory is located.

Accepted Answer

If a foreign factory is located in a nation where there are increasing availability and accessibility of advanced factors of production, it can definitely contribute to the improvement of the factory's capabilities. The factory can potentially benefit from utilizing and integrating advanced technologies, skilled labor, and other advanced resources available in the nation, leading to better performance and competitiveness.

Question 20

Good EDI systems can help a firm decentralize materials management decisions to the plant level by giving corporate-level managers the information they need for coordinating and controlling decentralized materials management groups.

Accepted Answer

Good EDI systems provide visibility and transparency across different levels of the organization, allowing corporate-level managers to monitor and coordinate materials management activities at the plant level. This promotes decentralization by empowering plant managers to make informed decisions based on real-time data and insights.

Quiz 15: Global Production, Outsourcing, and Logistics