Question 1

A statistically based philosophy that aims to reduce defects,boost productivity,eliminate waste and cut costs throughout a company is called:

Accepted Answer

The statistically based philosophy that aims to reduce defects, boost productivity, eliminate waste, and cut costs throughout a company is called Six Sigma. ISO 1900 and ISO 900 are standards for quality management systems, but they do not specifically focus on statistical methods to reduce defects and waste. Zero Sigma is not a recognized term in quality management.

Question 2

What system has a drawback that leaves a firm without a buffer stock of inventory?

Accepted Answer

The just-in-time (JIT) system focuses on producing goods and delivering them to customers just in time, without storing excess inventory. While this can help reduce costs and improve efficiency, it also leaves firms without a buffer stock of inventory. If there is a disruption in the supply chain, such as a delay in shipments or an unexpected increase in demand, the firm may not have enough inventory to meet its customers' needs. Therefore, the JIT system has a drawback that leaves a firm without a buffer stock of inventory.

Question 3

What can a firm limit by the commitments it makes to its alliance partners when it enters long-term alliances?

Accepted Answer

When a firm makes commitments to its alliance partners in a long-term alliance, it can limit its strategic flexibility. The firm may become too dependent on the alliance partner, and may not have the freedom to pursue other strategic options. Therefore, choice D, strategic flexibility, is the best answer. Choices A, B, and C are not directly affected by commitments made in an alliance.

Question 4

In the context of materials management,the acronym JIT stands for:

Accepted Answer

JIT stands for Just-In-Time which is a material management strategy where materials are ordered and delivered exactly when needed in the production process in order to minimize inventory carrying cost and increase efficiency.

Question 5

According to the textbook,the benefits of manufacturing components in-house seem to be greatest when all of the following factors are involved,except:

Accepted Answer

Manufacturing in-house is less beneficial when maximum flexibility is necessary, as in-house production can limit a firm's ability to quickly adapt to changes.

Question 6

According to the textbook,what systems require internet-based computer links between a firm,its suppliers and its shippers?

Accepted Answer

Electronic data interchange (EDI) is a system that requires internet-based computer links between a firm, its suppliers, and its shippers. It enables the exchange of business documents between different companies in a standardized electronic format. EDI helps in improving the efficiency of supply chain management by reducing errors, improving the speed of transactions and reducing costs.

Question 7

The key decision factors that pertain to where an international firm locates its manufacturing facilities can be grouped under three broad headings.These are:

Accepted Answer

Country factors (such as market size, infrastructure, and workforce availability), technological factors (such as access to technology and the level of innovation), and product factors (such as the nature of the product and its production requirements) are the three main decision factors that determine where an international firm locates its manufacturing facilities. Political, economic, legal, language, cultural, and transportation factors are also relevant, but they are subcategories of the three key factors mentioned.

Question 8

The larger the minimum efficient scale of a plant relative to total global demand,_____________________________________.

Accepted Answer

If the minimum efficient scale of a plant is larger relative to total global demand, it suggests that the plant is highly productive and can meet a significant portion of the demand on its own. Therefore, centralizing production in a single location or a limited number of locations would make sense as it would allow for economies of scale and cost savings. Decentralizing production in multiple locations would result in smaller plants that may not be as efficient or cost-effective.

Question 9

___________ encompasses the activities necessary to get materials to a manufacturing facility,through the manufacturing process,and out through a distribution system to the end user.

Accepted Answer

Logistics involves the planning, coordination, and management of the flow of goods and services from the point of origin to the point of consumption. This includes transportation, inventory management, warehousing, and distribution. Bureaucracy refers to the administrative processes and procedures that govern an organization, while production refers to the actual manufacturing or creation of goods. "Wares operations" is not a commonly used term and does not accurately describe the process described in the question.

Question 10

In the context of materials management,the acronym EDI stands for:

Accepted Answer

EDI stands for Electronic Data Interchange, which refers to the electronic exchange of information between organizations in a standardized format. It is commonly used in materials management to automate processes such as ordering, invoicing, and inventory management.

Question 11

Under a more traditional system,as opposed to a JIT system,warehousing parts for weeks before they are used:

Accepted Answer

Warehousing parts for weeks before they are used in a traditional system can lead to the production of defective parts without the problem being recognized. This is because the parts are not inspected until they are needed for production, which can result in a higher level of defective parts being produced. Therefore, option B is the best choice. Options A, C, and D are incorrect as they do not provide any benefits for warehousing parts for weeks before they are used in a traditional system.

Question 12

Strategic alliances with suppliers was pioneered in:

Accepted Answer

Strategic alliances with suppliers were pioneered in Japan by large auto companies such as Toyota. This approach, known as keiretsu, involved forming long-term relationships with suppliers and working closely with them to improve quality and reduce costs. This model became a key part of Japan's success in the global automotive industry in the 1980s and 1990s. While other regions and industries have since adopted similar strategies, Japan was the originator of this approach to supply chain management.

Question 13

What are manufacturing technologies 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 all part of the Lean Production system. Lean production focuses on minimizing waste and increasing efficiency by reducing setup times, improving scheduling, and implementing quality control measures throughout the manufacturing process.

Question 14

In general,the trends towards just-in-time systems (JIT),computer-aided design (CAD)and computer-aided manufacturing (CAM)seem to have increased pressures for firms to establish _______ relationships with their suppliers.

Accepted Answer

JIT, CAD and CAM systems require close coordination and communication between suppliers and firms in order to operate effectively. This suggests a need for long-term, mutually beneficial relationships that prioritize quality and reliability. Strictly arms-length relationships (A) may not provide the necessary level of collaboration, while intermediate-term (B) and short-term (D) relationships may not allow for the necessary investment and development of trust and shared understanding between the parties.

Question 15

Wide product variety makes it difficult for a company to increase its production efficiency and _______________.

Accepted Answer

Wide product variety can lead to more complicated production processes and higher costs, which makes reducing unit costs difficult. Therefore, the best answer is C.

Question 16

One of the most difficult decisions international businesses face is (i)when to perform value creation activities themselves or (ii)outsource it to another entity.This is called:

Accepted Answer

The decision of whether to perform value creation activities in-house or outsource to another entity is commonly known as the "make or buy" decision. This decision is critical for international businesses as it affects their efficiency, cost structure, and competitiveness in the market. Outsourcing or buying helps to reduce costs and improve operational efficiency, while performing activities in-house enables the business to have greater control and customization. However, the best choice depends on various factors such as the company's core competencies, market conditions, and the availability of outsourcing partners. Thus, a case-by-case analysis is needed to decide whether to make or buy value creation activities.

Question 17

The major cost savings from JIT inventory systems comes from:

Accepted Answer

The major cost savings from JIT inventory systems come from speeding up inventory turnover. This means that companies can reduce the amount of inventory they hold, which can lead to lower costs associated with storage, financing, and handling. JIT systems also allow for better forecasting and communication, which can reduce the risk of overproduction and obsolete inventory. Lowering costs by sacrificing quality is not a benefit of JIT, and increasing productivity of workers is a potential benefit, but not the major cost saving factor. Slowing down inventory turnover would actually increase costs as it would require holding more inventory.

Question 18

In 2009,Hewlett-Packard (HP),headquartered in Palo Alto,California,was number one in computer sales in the world.While being praised for many innovations in the computer age,the one ubiquitous invention that HP gave to the world was the:

Accepted Answer

The answer of In 2009,Hewlett-Packard (HP),headquartered in Palo Alto,California,was number...

Question 19

Incentive problems do not arise when the firm uses ______uppliers.

Accepted Answer

Incentive problems arise when suppliers have a dependent relationship with the firm, meaning they rely on the firm for a significant portion of their business. This can lead to conflicts of interest and reduced supplier motivation to provide the highest quality goods or services at the lowest cost. Independent suppliers, on the other hand, are not reliant on the firm and are more likely to act in their own self-interest, including providing high-quality goods and services at the lowest possible cost. Therefore, incentive problems are less likely to arise with independent suppliers.

Question 20

For the typical manufacturing enterprise,_________ costs account for between 50 and 70 per cent of revenues,depending on the industry.

Accepted Answer

Material costs typically include the cost of raw materials and components used in the manufacturing process. Given that these costs account for a large percentage of revenue in the manufacturing industry, it is the most suitable choice.

Quiz 13: International Production, Outsourcing and Logistics