Question 1

Finder Technologies Inc. has manufacturing units in Canada. The country's stable economic and political environment helps the firm gain competitive advantage by lowering production costs and improving product quality. Other things being equal, the benefits realized from such a strategy can be typically referred to as

Accepted Answer

Location economies refer to the cost advantages that firms obtain by locating their production facilities in countries with favorable economic and political environments, which can lead to lower production costs and improved product quality.

Question 2

One objective of lean production is to

Accepted Answer

Lean production aims to improve efficiency by reducing setup times, which helps in minimizing waste and increasing productivity.

Question 3

Sound-Rite Audio wants to enter the European market but realizes that consumer tastes are not uniform across countries. To be able to accommodate demands for local responsiveness, Sound-Rite Audio should

Accepted Answer

Decentralizing production activities allows Sound-Rite Audio to tailor products to meet local consumer preferences and demands, which vary across different European countries.

Question 4

A business would incorporate the Six Sigma philosophy as a way to

Accepted Answer

Six Sigma is a set of techniques and tools for process improvement, primarily focused on reducing defects and eliminating waste to improve quality and efficiency.

Question 5

What is a consequence of using flexible machine cells?

Accepted Answer

Flexible machine cells improve capacity utilization and reduce wastes by allowing for quick adaptation to different production needs, minimizing downtime and excess inventory.

Question 6

Mass customization provides companies with the ability to meet which two goals?

Accepted Answer

Mass customization allows companies to offer customized products at a low cost by using flexible manufacturing systems and technology, combining the benefits of low-cost production with the ability to tailor products to individual customer preferences.

Question 7

Posh Pools Inc. was ready to sign an agreement to build a new facility in a foreign nation when it learned that the local currency in that nation had appreciated significantly in the past week. How might this affect the company's decision to build the new facility?

Accepted Answer

An appreciation of the local currency makes it more expensive for foreign companies to invest and operate in that country, thus diminishing its attractiveness as a manufacturing base.

Question 8

A-1 Athletic Shoes has wide variety in its product line. A firm with a wide product variety will find it

Accepted Answer

A wide product variety often leads to increased complexity in production, which can make it difficult to reduce unit costs due to less standardization and increased changeover times.

Question 9

A ________ includes a grouping of various types of machinery, a common materials handler, and a computer to control the production of a family of parts or products.

Accepted Answer

A flexible machine cell is a system that includes various types of machinery, a common materials handler, and a computer to control the production of a family of parts or products, allowing for efficient and adaptable manufacturing processes.

Question 10

SuspendHers Inc., a maker of fashionable belts and accessories for women, plans to expand in the EU marketplace. To do so, the EU requires the company to

Accepted Answer

The EU often requires companies to certify their products under ISO 9000 to ensure quality management standards are met for market entry.

Question 11

As the global market for eyeglass products has become extremely competitive in recent months, U-See Products' newly appointed CFO believes the company should address its minimum efficient scale and attempt to lower it. What is a consequence of a low minimum efficient scale?

Accepted Answer

A low minimum efficient scale allows a firm to produce efficiently at smaller volumes, enabling it to manufacture in multiple locations, which can help hedge against currency risk.

Question 12

Producing a standardized product in large volumes will

Accepted Answer

Producing a standardized product in large volumes will increase production efficiency because it allows for specialization of labor, the use of specialized machinery, and the ability to purchase inputs in bulk.

Question 13

When a company achieves mass customization via flexible manufacturing technologies, it increases the company's

Accepted Answer

Mass customization allows a company to tailor products to individual customer needs, thereby increasing customer responsiveness.

Question 14

The level of output at which most plant-level scale economies are exhausted is known as

Accepted Answer

Minimum efficient scale is the level of output at which most plant-level scale economies are exhausted, meaning the firm is operating at the lowest point on its long-run average cost curve.

Question 15

The cost to manufacture one unit of Killian Audio Products' best-selling hearing aid, the Zone, is $67.50. The CFO of the company determines that if the company expands the output of its biggest U.S. plant by 20 percent, the unit cost would be only $42.50. This analysis is based on the concept of

Accepted Answer

Economies of scale refer to the cost advantage that arises with increased output of a product, as the fixed costs are spread over more units, reducing the cost per unit.

Question 16

When considering foreign direct investment in a country, what is one situation that will benefit a company?

Accepted Answer

The presence of supporting industries can create a conducive environment for a company by providing necessary resources, services, and infrastructure, which can enhance efficiency and reduce costs.

Question 17

What is an accurate depiction of Six Sigma?

Accepted Answer

Six Sigma aims for near perfection, with a goal of no more than 3.4 defects per million opportunities, making it challenging but not impossible to achieve.

Question 18

What is a drawback of ISO 9000 certification?

Accepted Answer

ISO 9000 certification can be bureaucratic and costly, especially for smaller firms, due to the extensive documentation and processes required to maintain compliance.

Question 19

One problem with a mass production system is that it

Accepted Answer

Mass production often leads to the creation of large inventories, which require significant storage space, as products are produced in large quantities to achieve economies of scale.

Question 20

Calvin Manufacturing purchased new equipment that reduces setup times when employees change templates between production runs. This equipment has also improved quality control measures throughout the entire manufacturing process. What type of technology is Calvin Manufacturing using?

Accepted Answer

Lean production focuses on reducing waste and improving efficiency, which aligns with the equipment's ability to reduce setup times and improve quality control.

Quiz 15: Global Production and Supply Chain Management