Deck 13: International Production, Outsourcing and Logistics

Question 1

Improved manufacturing techniques at Dell Computers paved the way to achieve two goals simultaneously that were once thought to be incompatible.This is known as:

A)lean and mean production.
B)flexible and tight manufacturing.
C)customised product in mass markets.
D)low cost and differentiation.

Answer 1

C

Question 2

Activities involved in creating a product and that which controls the transmission of physical materials through the value chain,from procurement through production and into distribution,is called:

A)production and logistics.
B)manufacturing and production.
C)development and promotion.
D)trade sourcing and control.

Answer 2

A

Question 3

In the decision to 'make' or 'buy',an argument that supports making all or part of a product in-house is by adopting the principle of:

A)horizontal integration.
B)conglomerate integration.
C)seasonal integration.
D)vertical integration.

Answer 3

D

Question 4

Greater product quality which lowers warranty costs,scrap costs and the need to higher rework is the result of improved quality control.

Question 5

ISO 9000 is the international standard for product manufacturing firms.

Question 6

Improving quality control reduces costs by:

A)increasing sales.
B)lowering rework and scrap costs.
C)eliminating warranty claims.
D)implementing internal audits.

Question 7

The traditional role of an operations manager is to ensure the timely production and delivery of the right product at the right quality and price.With globalisation and the increasing use of outsourcing and production alliances,the role for some operational mangers has:

A)expanded with new responsibilities and new skills.
B)contracted due to organisational downsizing.
C)become superfluous when seen through the lens of strategic leaders
D)been integrated with logistics and finance management

Question 8

Owners of some very well-known global brands contract with Li & Fung to have their products manufactured.This makes Li & Fung one of the largest _________ companies in the world.

A)outsourced
B)manufacturing
C)logistics
D)trade-sourcing

Question 9

Efficient supply chain management reduces the amount of inventory in the system and increases inventory turnover.

Question 10

The objectives of reducing costs and increasing quality are not:

A)statistically correlated.
B)conversely linked.
C)independent of each other.
D)feasibly possible.

Question 11

Two important objectives shared by both production and logistics are to simultaneously increase quality and increase revenues.

Question 12

In production theory,improved quality reduces costs.

Question 13

The main management technique that companies are utilising to boost their product quality is process re-engineering.

Question 14

W.Edwards Deming,was one of the founding members of the Total Quality Management (TQM)movement in the 1980s.Deming identified a number of steps that should be part of any TQM program.He argued that management should embrace the philosophy that mistakes,defects and poor-quality materials are not acceptable and should be eliminated.

Question 15

Logistics is the activity that controls the transportation of physical materials through the value chain,from procurement through production and into distribution.

Question 16

Improved performance reliability has been shown to produce:

A)increased profits but at the expense of quality produce.
B)increased warranty costs as well as increases to rework and scrap costs.
C)lackadaisical work practices and bipartisan attitudes towards growth.
D)increased productivity whilst lowering manufacturing costs.

Question 17

It was W.Edwards Deming,not Michael Porter,who argued that management should embrace the philosophy that mistakes,defects and poor-quality materials are not acceptable and should be eliminated.

Question 18

The level of output at which most plant-level economies of scale are exhausted is referred to as the:

A)efficiency frontier.
B)minimum efficient scale.
C)differential efficiency.
D)maximum efficiency scale.

Question 19

Logistics is the expanded terminology for distribution.

Question 20

The manufacturing technology designed to reduce set-up time and improve job scheduling and quality control is called:

A)differential stage manufacturing.
B)flexible manufacturing technology.
C)ISO 14000.
D)Six Sigma.

Question 21

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

A)ISO 1900
B)ISO 900
C)Six Sigma
D)Zero Sigma

Question 22

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

A)total quality management
B)just-in-time
C)management by objectives
D)re-engineering system

Question 23

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

A)choice of suppliers
B)trade availability
C)decision freedom
D)strategic flexibility

Question 24

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

A)Jobber-In-Training.
B)Job-In-Transit.
C)Joint-In-Transpiration.
D)Just-In-Time.

Question 25

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

A)when highly specialised assets are involved.
B)when the firm is simply more efficient than external suppliers at performing a particular activity.
C)when maximum flexibility is necessary.
D)when vertical integration is necessary for protecting proprietary technology.

Question 26

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

A)electronic data interchange
B)electronic data intelligence
C)elastic data interchange
D)elastic demographic interchange

Question 27

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

A)political factors,economic factors and legal factors.
B)country factors,technological factors and product factors.
C)product factors,service factors and labour factors.
D)language factors,cultural factors and transportation factors.

Question 28

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

A)the greater the argument for decentralising production in multiple locations
B)the greater the argument for centralising production in a single location or a limited number of locations
C)the greater the argument for decentralising production in a single location or a limited number of locations
D)the greater the argument for centralising production in multiple locations

Question 29

___________ 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.

A)Logistics
B)Bureaucracy
C)Production
D)Wares operations

Question 30

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

A)Electronic Data Intelligence.
B)Eliminate Distribution Intermediaries.
C)Eastern Distribution Interchange.
D)Electronic Data Interchange.

Question 31

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

A)becomes more efficient for the firm.
B)allows defective parts to be produced before a problem is recognised.
C)increases transportation costs for the firm.
D)increases the level of quality awareness within a firm.

Question 32

Strategic alliances with suppliers was pioneered in:

A)America by large chemical producers like Dow.
B)Japan by large auto companies such as Toyota.
C)Europe by large electronics firms like Philips.
D)Germany by telecommunications companies like Deutsche Telekom.

Question 33

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?

A)multifaceted production
B)lean production
C)lateral production
D)temporal production

Question 34

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.

A)strictly arms-length
B)intermediate-term
C)long-term
D)short-term

Question 35

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

A)reduce its profitability
B)increase its product sales
C)reduce its unit costs
D)improve marketing efficiency

Question 36

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:

A)make-or-break decisions.
B)convergent-or-divergent decisions.
C)make-or-buy decisions.
D)divest-or-expropriate decisions.

Question 37

The major cost savings from JIT inventory systems comes from:

A)lowering costs by sacrificing quality.
B)increasing productivity of workers.
C)speeding up inventory turnover.
D)slowing down inventory turnover.

Question 38

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:

A)laser printer.
B)inkjet printer.
C)LCD calculator.
D)iPhone.

Question 39

Incentive problems do not arise when the firm uses ______uppliers.

A)internal
B)independent
C)dependent
D)home-grown

Question 40

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

A)defect
B)administrative
C)labour
D)material

Question 41

What are the decisions about whether a firm should make or outsource the component parts that go into the final product called?

A)end-user
B)synergistic
C)make-or-buy
D)feed-forward

Question 42

By tracking component parts as they make their way across the globe towards an assembly plant,______ systems enable a firm to optimise production scheduling according to when components are expected to arrive.

A)information
B)data
C)logistics
D)transportation

Question 43

When one firm must invest in specialised assets to supply another,__________ is created.

A)a symbiotic relationship
B)a business relationship
C)mutual dependency
D)an alliance

Question 44

If Ford developed a high-performance,high-quality fuel injection system that no other competitor in the industry can match,what would be the best strategy for Ford?

A)patent the technology and sit on it
B)develop and produce the technology in-house
C)outsource the technology
D)sell the technology to competitors

Question 45

If a firm possesses proprietary technology,the best option for that firm would be to:

A)produce that technology in-house so that competitors do not obtain it.
B)produce that technology in-house to lower costs.
C)outsource that technology to lower costs.
D)outsource that technology to increase the level of competitiveness in the industry.

Question 46

The arguments that support making component parts in-house (i.e.vertical integration)are four-fold:

A)lower costs facilitates investments in highly specialised assets,protects proprietary product technology and facilitates the scheduling of adjacent processes
B)greater flexibility helps a firm capture orders from international customers,facilitates investments in highly standardised assets and facilitates the scheduling of adjacent processes
C)helps a firm capture orders from international customers,lower costs,facilitates investments in highly standardised assets and facilitates the scheduling of adjacent processes
D)lower costs,greater flexibility,facilitates the scheduling of adjacent customers and facilitates investments in highly specialised assets

Question 47

The improved scheduling that results from making components in-house as opposed to outsourcing is particularly important in firms with:

A)highly labour-intensive production.
B)highly mechanised production.
C)information systems.
D)just-in-time inventory systems.

Question 48

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

A)concentrate them in the optimal location and serve the world market from there,and concentrate them in markets that are parts of major trade blocks.
B)locate at least one manufacturing facility in each continent in which the firm is active,and concentrate manufacturing at an optimal location.
C)concentrate them in the optimal location and serve the world market from there,and decentralise them in various regional or national locations that are close to major markets.
D)concentrate them in markets that are part of major trade blocks,and centralise them at a single location.

Question 49

Buying component parts from independent suppliers gives the firm which of the following advantages?

A)may help the firm to capture orders from international customers,facilitates the scheduling of adjacent processes and greater flexibility
B)greater flexibility,facilitates the scheduling of adjacent processes and protects proprietary production technology
C)facilitates investments in highly specialised assets,protects proprietary product technology and facilitates the scheduling of adjacent processes
D)greater flexibility,it can help drive down the firm's cost structure and it may help the firm to capture orders from international customers

Question 50

Which of the following is a consequence of an EDI system?

A)Production costs are increased.
B)Most paperwork between suppliers,shippers and the purchasing firm is eliminated.
C)It is difficult for suppliers,shippers and the purchasing firm to communicate due to the complexity and slowness of the system.
D)Flexibility and responsiveness of the supply system is decreaseD.