Scenario: Hafstrom Motors
Based in Kentucky, Hafstrom Motors has always used spare parts made in America for its automobiles. However, sales and profits have slumped over the past three years. A senior manager at the company comes up with new strategies for improving the firm's production activities.
-The senior manager recommends that Hafstrom obtain auto parts from a country where production activities would generate more value than it would generate elsewhere.He wants to take advantage of ________.
A) just-in-time manufacturing
B) facilities layout planning
C) process planning
D) location economies

Question

Quizplus · Accepted Answer

The senior manager's recommendation is to obtain auto parts from a country where production activities would generate more value than it would generate elsewhere. This suggests the use of location economies, which refers to the strategy of locating different stages of a production process in different countries where they can be done most efficiently and profitably. Just-in-time manufacturing, facilities layout planning, and process planning are not directly relevant to the recommendation provided by the senior manager.

Scenario: Hafstrom Motors Based in Kentucky, Hafstrom Motors Has Always Used Spare Parts