Deck 18: Global Operations and Supply-Chain Management

Question 1

Daffodil Inc. ,an American publishing company,began outsourcing content writing work to Pride Inc. ,a content services company in Mildrid,a country in Southeast Asia.Tensions arose between the two companies when Pride failed to deliver content to Daffodil on a predecided date.Even though Pride continues to be Daffodil's outsourcing vendor,the relationship between the two companies has become problematic.This scenario illustrates that Daffodil is subjected to high _____.

A)operational risk
B)structural risk
C)credit risk
D)liquidity risk

Answer 1

B

Question 2

Acacia Inc. ,an Australian textile company,imports cotton from Lebristar,a country in Southeast Asia.It can be said that:

A)Acacia should use just-in-time (JIT)manufacturing to carry excess inventory.
B)Acacia is likely to evade import duties.
C)Acacia is likely to save costs and become more competitive.
D)Acacia should follow a rigid cost-plus pricing strategy.

Answer 2

C

Question 3

The practice of using a company's internal employees or other resources to accomplish a task is known as _____.

A)outsourcing
B)insourcing
C)offshoring
D)dejobbing

Answer 3

B

Question 4

Komelia,a country in southern Europe,imports rubber and plastic products from China.It can be said that Komelia is engaged in _____.

A)global procurement
B)vertical integration
C)privatization
D)insourcing

Question 5

Cooper Inc. ,an American computer manufacturing company,procures motherboards for its computers from Chinese motherboard manufacturers instead of producing them internally.Given this information,it can be said that:

A)Cooper is likely to evade import tariffs.
B)Cooper is likely to save on transportation costs.
C)Cooper is likely to save millions of dollars of investment.
D)Cooper is unlikely to face communication challenges with its vendors.

Question 6

Dolphin Inc. ,a Spanish transportation company,purchased buses from Anderson Inc. ,an American automobile company.In return,the Spanish government asked Anderson to purchase parts for the buses from or assemble portions of the buses in Spain.This scenario illustrates a(n)_____ between Anderson and the Spanish government.

A)tenancy agreement
B)offset agreement
C)double taxation agreement
D)free trade agreement

Question 7

Oasis Inc. ,a multinational hotel chain,uses rooms,gym facilities,swimming pools,beds,food,drinks,entertainment,and staff in its hotels worldwide to provide a hospitable environment to its guests.All these factors are components of Oasis's _____.

A)production system
B)logistics system
C)research system
D)marketing system

Question 8

Alpha Inc. ,a car manufacturing company,uses a just-in-time (JIT)manufacturing system.By using the JIT system,_____.

A)Alpha can use the same mix of marketing strategies in its foreign and domestic markets
B)Alpha can gather all relevant information into a single database,represent all business functions in a module,and gain access to data in real time
C)Alpha can easily document the work of its overseas employees in the production process
D)Alpha can carefully plan the whole production process from start to finish in order to avoid carrying excess inventory

Question 9

To ensure the quality of its products,Hexagon Inc. ,an American apparel company,produces its products in-house instead of outsourcing production.Given this information,it can be said that Hexagon is engaged in _____.

A)rightsizing
B)offshoring
C)insourcing
D)dejobbing

Question 10

Herald Inc. ,an American steel manufacturing company,spends significant time acquiring iron ore from China.Given this information,it can be said that Herald is involved in the _____.

A)privatization process
B)offshoring process
C)procurement process
D)insourcing process

Question 11

Desmond is the chief executive officer of Topaz Inc. ,a computer manufacturing company.He is contemplating whether to buy chipsets from external suppliers or make them in-house.Desmond's contemplation illustrates a(n)_____.

A)advertising decision
B)marketing decision
C)pricing decision
D)sourcing decision

Question 12

Azure Inc. ,an American publishing company,has business tie-ups with companies in India that provide content services to Azure.Given this information,it can be said that Azure is engaged in _____.

A)insourcing
B)outsourcing
C)farmshoring
E)homeshoring

Question 13

Harrison is a manager at Delta Inc. ,a computer manufacturing company.He believes that Delta should produce all computer components in-house rather than buying them elsewhere.Which of the following is a true statement that supports his belief?

A)Making components in-house can help a firm maintain control of sensitive knowledge.
B)Producing components in-house can help a firm develop production expertise with minimum time and effort.
C)Producing components in-house can make it easy for a firm to achieve economies of scale.
D)In-house producers have the same incentives as external suppliers to produce high-quality products.

Question 14

Obtaining a good or service from an external supplier,often in international markets,is known as _____.

A)insourcing
B)rightsizing
C)outsourcing
D)homeshoring

Question 15

Dillon Inc. ,an automobile company,wants to make its supply chain efficient and avoid carrying excess inventory.Dillon can do so by using a _____.

A)Gantt chart
B)PEST analysis tool
C)just-in-time manufacturing system
D)push production strategy

Question 16

Orchid Inc. ,a consumer electronics company,has adopted a supply-chain management system.The supply-chain management system can help Orchid:

A)use the same mix of marketing strategies in its foreign and domestic markets.
B)reduce costs and increase revenues.
C)use a single pricing strategy in all its markets.
D)avoid government intervention.

Question 17

Nick is the chief executive officer of Helium Inc. ,a smartphone manufacturing company.He is considering the time and money required to develop chipsets internally and is comparing the advantages of producing them in-house over purchasing them from a global supplier.Given this information,it can be said that Nick is involved in the _____.

A)channel-design process
B)marketing process
C)price-setting decision process
D)make-or-buy decision process

Question 18

Ivory Inc. ,an American publishing company,outsources content writing work to Kuber Inc. ,an Indian content services company.Ivory is unable to document the work that employees of Kuber do in the production process.Moreover,it finds it difficult to stipulate what the actions of these employees should be in the production process.This scenario illustrates that Ivory is subjected to high _____.

A)operational risk
B)structural risk
C)reputational risk
D)contractual risk

Question 19

Thistle Inc. ,an American steel manufacturing company,procures limestone from China.Which of the following is a challenge that Thistle is likely to face by engaging in global procurement?

A)High transportation costs
B)Increased fixed costs
C)Difficulty in focusing on its core capabilities
D)Exposure to product safety concerns

Question 20

Magnolia Inc. ,an American software development company,has opened a call center in India.The company has hired Indian employees to work in the call center.This scenario is an example of _____.

A)offshoring
B)insourcing
C)dejobbing
D)homeshoring

Question 21

Tangerine Inc. ,a computer manufacturing company,makes all computer components in-house.It can be said that:

A)Tangerine is likely to develop production expertise with minimum time and effort.
B)Tangerine is likely to reduce its fixed costs.
C)Tangerine is likely to achieve economies of scale.
D)Tangerine is likely to have more control over production time frames and deliveries.

Question 22

Which of the following is an important consideration for locating a firm's production?

A)The price of the firm's product compared to its weight and volume
B)The life cycle of the firm's product
C)The firm's culture and organizational hierarchy
D)The gray market activities in a location

Question 23

Aaron is a manager at Crimson Inc. ,an American consumer electronics company.He believes that to make in-house production worthwhile,Crimson must make at least the minimum efficient scale.Which of the following is an accurate statement that supports Aaron's belief?

A)Crimson needs to plan its production process from start to finish in order to avoid carrying excess inventory.
B)Crimson needs to consider whether it can produce enough of the product to make an investment in the production process.
C)Crimson needs to make its products internally to achieve economies of scale.
D)Crimson needs to customize its products for different target markets.

Question 24

Darren,a manager at Bronze Inc. ,believes that it is better to produce offshore than domestically.Which of the following is a true statement that supports his belief?

A)A company can take advantage of low labor costs in offshore locations.
B)A company can follow a single pricing strategy in all markets by producing offshore.
C)A company can evade taxation in offshore locations.
D)A company can avoid government intervention in offshore locations.

Question 25

Which of the following can influence a firm's choice of production location?

A)The firm's organizational hierarchy
B)The gray market activities in a location
C)The degree to which the firm's product is standardized
D)The life cycle of the firm's product

Question 26

Moving production from outside a country back to the home country is known as _____.

A)homeshoring
B)insourcing
C)outsourcing
D)reshoring

Question 27

Magenta Inc. ,an Australian consumer electronics company,produces certain products in-house to ensure quality and availability.It also purchases the same products from suppliers to force competition and push innovation within the in-house unit.Given this information,it can be said that Magenta is engaged in _____.

A)global branding
B)dual sourcing
C)offshoring
D)rightsizing

Question 28

_____ are a major factor that makes certain areas more desirable as manufacturing locations.

A)Offset agreements
B)Foreign exchange rates
C)Value-added taxes
D)Turnkey projects

Question 29

Maroon Inc.is a smartphone manufacturing company.All its activities related to transforming components into products for the end user,including the transfer of money and information,constitute its _____.

A)supply chain
B)marketing mix
C)product line
D)brand equity

Question 30

Amber Inc. ,a smartphone manufacturing company,produces high-quality,low-cost products.It effectively manages its supply chain.Its supply-chain members use environmentally friendly work practices.It can be said that Amber's supply chain is most likely to enable Amber to:

A)proactively manage product safety concerns.
B)use the same mix of marketing strategies in its foreign and domestic markets.
C)use a flexible cost-plus pricing strategy.
D)maintain its reputation as an ethical organization.

Question 31

To minimize costs while maximizing value for end users,Argon Inc. ,a consumer electronics company,manages all the activities related to the transformation of individual components into products for the end users internally.Given this information,it can be said that Argon is most likely engaged in _____.

A)human resources management
B)financial management
C)supply-chain management
D)marketing management

Question 32

Chestnut Inc. ,a computer manufacturing company,effectively manages its supply chain.It can be said that Chestnut's supply chain is most likely to enable Chestnut to:

A)qualify for lower tariffs in foreign markets by reclassifying its products.
B)produce high-quality,low-cost products.
C)use the same mix of marketing strategies in its foreign and domestic markets.
D)use a flexible cost-plus pricing strategy.

Question 33

Chandler is a manager at Zion Inc. ,a Canadian smartphone manufacturing company.Chandler believes that Zion should procure smartphone components from abroad instead of producing them in-house.Which of the following statements supports his belief?

A)Making components in-house requires a company to standardize its products and processes that leads to increased production costs.
B)Making components in-house does not offer a company control of sensitive knowledge.
C)Making components in-house requires a company to develop production expertise that takes considerable time and effort.
D)Making components in-house prevents companies from making stable price estimates.

Question 34

Which of the following is an important consideration for a company when choosing a location for producing its product?

A)The image of the company's product and how that image relates to the production location
B)The price of the company's product compared to the price of its competitors' products in the market of the production location
C)The price of the company's product compared to the product's life cycle
D)The organizational hierarchy in the company

Question 35

To make in-house production worthwhile,a company must make at least the _____.

A)minimum efficient scale
B)minimum wage scale
C)minimum pay scale
D)minimum time scale

Question 36

Salmon Inc. ,an American apparel company,has decided to move production from overseas back to the United States.Given this information,it can be said that Salmon is _____.

A)rightsizing
B)offshoring
C)outsourcing
D)reshoring

Question 37

Which of the following factors affects a firm's decision about production location?

A)The life cycle of the firm's product
B)The gray market of a location
C)The economic climate of a location
D)The firm's organizational hierarchy

Question 38

It is important to manufacture products geographically close to the final customer when they have a:

A)high weight-to-volume ratio.
B)high value-to-weight ratio.
C)low value-to-weight ratio.
D)low weight-to-volume ratio.

Question 39

It is less important to manufacture products geographically close to the end consumer when they have a:

A)high weight-to-volume ratio.
B)high value-to-weight ratio.
C)low value-to-weight ratio.
D)low weight-to-volume ratio.

Question 40

Which of the following products should be produced close to the final customer?

A)Gasoline
B)Coffee
C)Tea
D)Silk

Question 41

Chestnut Inc. ,an American retail company,has developed a supply-chain network that maps out a production process from beginning to end,including purchasing,production,warehousing,transportation,and inventory.In which of the following ways can it optimize its supply chain?

A)By adopting global branding
B)By mass customization
C)By applying data analytics
D)By outsourcing

Question 42

Neptune Inc. ,a business consulting firm,analyzes extremely large data sets to uncover statistical patterns,trends,and associations that might otherwise go unnoticed because of the volume of data.Given this information,it can be said that Neptune uses _____.

A)a datagram
B)big data
C)metadata
D)raw data

Question 43

Do you think a firm can optimize its supply chain by applying data analytics? Give reasons to support your answer.

Question 44

Asterisk Inc. ,a car manufacturing company,wants to have an efficient and globally coordinated supply chain.It can achieve this by using:

A)a market basket analysis.
B)a Likert scale.
C)Internet-based applications.
D)PEST analysis tools.

Question 45

Do you think making products or components in-house can be disadvantageous to a firm? Give reasons to support your answer.

Question 46

Which of the following has become critical for supply-chain managers to ensure reliability and keep costs down while simultaneously monitoring the overall operation of the global supply chain?

A)Split testing
B)Cognitive geography
C)Virtual reality
D)Data analytics

Question 47

Do you think while making decisions about production location,a firm must take into consideration the price of its product compared to the product's weight and volume? Give reasons to support your answer.

Question 48

Do you think global procurement can sometimes be disadvantageous to a firm? Give reasons to support your answer.

Question 49

_____ has been used to analyze epidemics,design more efficient cities,predict where crimes are most likely to occur,and even forecast the results of Supreme Court rulings.

A)Robotics
B)Virtual reality
C)Cloud computing
D)Big data

Question 50

Fulcrum Inc. ,an American consumer electronics company,uses data analytics to continually collect information from all its global suppliers and put that information to use immediately to make necessary changes in its production processes.Given this information,it can be said that by using data analytics,Fulcrum can:

A)use the same pricing strategy in all its markets.
B)qualify for lower tariffs in foreign markets by reclassifying its products.
C)improve its understanding of the inventories that exist across countries.
D)use the same mix of marketing strategies in its foreign and domestic markets.

Question 51

Cumulus Inc. ,a clothing company,has implemented data analysis within its supply chain.It can be said that by using data analysis in its supply chain,Cumulus can:

A)use the same mix of marketing strategies in its foreign and domestic markets.
B)take less time from order to delivery.
C)qualify for lower tariffs in foreign markets by reclassifying its products.
D)use the same pricing strategy in all its markets.

Question 52

Clive Inc. ,an American software development company,uses a technology that helps it collate all relevant information into a single database,represent all business functions in a module,and provide access to data in real time.Given this information,it can be said that Clive uses a(n)_____.

A)Likert scale
B)PEST analysis tool
C)enterprise resource-planning system
D)just-in-time system

Question 53

_____ has opened a world of opportunity for supply-chain managers,giving them the freedom to produce each component of a product in the best location.

A)Commodification
B)Subsidization
C)Globalization
D)Nationalization

Question 54

Krystal Inc. ,a multinational software development company,uses an enterprise resource-planning (ERP)system.It can be said that the ERP system can enable Krystal to:

A)use the same mix of marketing strategies in its foreign and domestic markets.
B)standardize its processes to improve control over its products.
C)push products to customers by using the just-in-time manufacturing system.
D)select which language to apply,which nation's accounting standards to follow,and which currency to use.

Question 55

Which of the following firms is most likely using supply-chain management effectively?

A)Galaxy Inc. ,which uses its supply chain to maintain its reputation as an ethical organization
B)Herald Inc. ,which uses its supply chain to produce low-quality,low-cost products
C)Topaz Inc. ,which uses its supply chain to reduce the touchpoints between its customers and its employees
D)Carter Inc. ,which uses its supply chain to produce small batches of products to initiate planned obsolescence

Question 56

Justify the argument that supply chains and their management are crucial for success in today's business world.

Question 57

_____ can help a firm implement an exact formula for procuring materials in the most efficient,cost-effective way possible and can update variables in real time to compensate for any changes in conditions.

A)Codetermination
B)Data analytics
C)Outsourcing
D)Mass customization

Question 58

_____ perform any number of disparate functions and enable companies to coordinate data,schedules,performance metrics,and plans in real time.

A)Likert scales
B)Cloud-based applications
C)Just-in-time manufacturing systems
D)PEST analysis tools

Question 59

Do you think the decision to outsource and/or offshore some aspect of a firm's operations can have major strategic consequences for the firm? Give reasons to support your answer.

Question 60

Mantle Inc. ,a consumer electronics company,wants to expand its customer base.Which of the following can help Mantle analyze and predict consumer behavior?

A)Big data
B)Virtual reality
C)A Likert scale
D)A Gantt chart