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.

Accepted Answer

False

Question 2

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

Accepted Answer

One of the primary reasons for sourcing globally is to access lower prices due to factors such as lower labor costs, cheaper raw materials, and economies of scale.

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.

Accepted Answer

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.

Accepted Answer

The answer of Outsourcing decisions,except for the decision to use...

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.

Accepted Answer

Emerging industry-based B2B exchanges connect multiple organizations within a supply chain network, allowing for optimization and coordination of resources and operations beyond 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.

Accepted Answer

This statement is true. According to data from the Bureau of Economic Analysis, the cost of materials and supplies as a percentage of total manufacturing costs has been steadily increasing since the 1980s.

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.

Accepted Answer

The answer of Supply chains are an integral part of...

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.

Accepted Answer

If the U.S. dollar loses value against the Euro, quoting prices in Euros would make the products more expensive for the American importer. To avoid price increases, the importer should require quotes in U.S. dollars.

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.

Accepted Answer

Effective supply chain management can help a company to comply with regulations, maintain social responsibility, and reduce environmental impact, both in domestic and global markets. Therefore, it can enhance a company's ability to manage these pressures.

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.

Accepted Answer

The statement incorrectly labels the procurement of goods and services that are part of finished goods as "indirect procurement." In fact, this describes "direct procurement." Indirect procurement refers to purchasing goods and services not directly incorporated into a finished product, such as office supplies or consulting services.

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.

Accepted Answer

Many companies consider outsourcing the purchasing function and E-procurement accelerates this trend.

Question 12

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

Accepted Answer

Indirect procurement refers to the acquisition of goods and services that are not directly incorporated into a product being manufactured, such as office supplies, maintenance and repair services, and software. Raw materials and components, however, are considered direct procurement because they are directly used in the production of goods.

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.

Accepted Answer

The level of standardization in a company's products and services across different countries or regions is an important factor to consider in design.

Question 14

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

Accepted Answer

Outsourcing refers to contracting out certain business functions or processes to a third-party company, which can be domestic or international. Relocating activities to a foreign location specifically is called offshoring.

Question 15

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

Accepted Answer

Outsourcing complex activities can lead to challenges such as loss of control, quality issues, and dependency on the vendor, which might not always result in better cost benefits. It's often more beneficial for companies to retain core and complex activities in-house to maintain control and ensure quality.

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.

Accepted Answer

Inventory ties up money, which is a cost to the organization. Effective supply chain management systems aim to reduce this cost by reducing inventory levels at every stage in the supply chain. Therefore, 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.

Accepted Answer

The text states that global sourcing arrangements can 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.

Accepted Answer

The process described is called supply chain management, not operations management. Operations management focuses on the efficient and effective processes within a company to produce goods or services.

Question 19

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

Accepted Answer

The text states that outsourcing is the act of 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.

Accepted Answer

The "over-the-wall" approach involves a sequential process in which the designers pass their designs to the manufacturing team without further interaction or feedback, which can lead to delays and errors in product development.

Quiz 15: Global Operations and Supply Chain Management