Question 1

According to the text, Zara's strategy focuses on continual renewal of its clothing lines.

Accepted Answer

The text states that Zara's strategy is based on "continual renewal of its clothing lines" in order to keep up with fast-changing fashion trends.

Question 2

According to the text, Zara's strategy of speed and flexibility has enabled the company to eliminate inventory.

Accepted Answer

Zara's strategy of speed and flexibility significantly reduces inventory levels but does not eliminate inventory entirely. The approach allows for rapid response to market demands but still requires some level of inventory to operate effectively.

Question 3

As discussed in the text, global sourcing arrangements include overseas joint ventures, independent overseas manufacturers, and wholly owned subsidiaries.

Accepted Answer

The statement is true. Global sourcing can involve various arrangements such as joint ventures, independent manufacturers, or wholly owned subsidiaries located overseas.

Question 4

When possible, it is better for companies to initially outsource complex activities in order to achieve better cost benefits.

Accepted Answer

Outsourcing complex activities can lead to challenges such as loss of control, quality issues, and dependency on the vendor, which might not always result in better cost benefits. It's often more beneficial for companies to retain core and complex activities in-house to maintain control and ensure quality.

Question 5

The "over-the-wall" approach to product design involves an initial step in which the designers prepare the product's design, followed by sending the newly created design to the company's manufacturing engineers.

Accepted Answer

The "over-the-wall" approach to product design indeed involves an initial step in which the designers prepare the product's design, followed by sending the newly created design to the company's manufacturing engineers, without much interaction between the two groups.

Question 6

Supply chains are an integral part of global quality and cost management initiatives, since a typical company's supply chain costs can represent over 80 percent of assets.

Accepted Answer

The answer of Supply chains are an integral part of...

Question 7

According to the text, the process of coordinating and integrating the flow of materials, information, finances, and services within and among companies in the value chain is called operations management.

Accepted Answer

The process described is called supply chain management, not operations management. Operations management focuses on the efficient and effective processes within a company to produce goods or services.

Question 8

According to the text, shorter and less predictable product life cycles have placed reduced emphasis on supply chains and their performance.

Accepted Answer

Shorter and less predictable product life cycles have actually increased the emphasis on supply chains and their performance, as companies need to quickly adjust their supply chain strategies to meet changing demand and market conditions.

Question 9

Outsourcing is the relocation of some or all of a business's activities or processes to a foreign location.

Accepted Answer

Outsourcing involves contracting out certain business activities or processes to a third party, which can be located domestically or internationally, not necessarily involving relocation to a foreign location.

Question 10

According to the text, a concurrent engineering approach to design promotes cross-functional participation in the design process and thereby helps to identify and avoid many of the potential sourcing, manufacturing, and other difficulties that can be associated with a particular design.

Accepted Answer

The text states that concurrent engineering approach promotes cross-functional participation in the design process, which helps to identify and avoid potential difficulties in sourcing, manufacturing, and other areas that may be associated with a particular design.

Question 11

Because inventory is carried at each stage in the supply chain, and because inventory ties up money, it has been argued that the ultimate goal of effective supply chain management systems is to reduce inventory.

Accepted Answer

Inventory ties up money and is carried at each stage in the supply chain. Therefore, effective supply chain management systems aim to reduce inventory in order to save costs and improve efficiency.

Question 12

In U.S. industry, the proportion of purchased materials in the overall cost of goods sold has been rising for several decades.

Accepted Answer

This statement is true. According to a report by the National Bureau of Economic Research, the proportion of purchased materials in the overall cost of goods sold has increased from 45% in the 1980s to 67% in 2013.

Question 13

In the case of the United States, intrafirm trade accounts for 30 to 40 percent of exports of goods.

Accepted Answer

Intrafirm trade, also known as intra-company trade or trade between related entities, has become increasingly common in global trade. According to the U.S. Bureau of Economic Analysis, intrafirm trade accounted for approximately 35 percent of U.S. exports of goods in 2019.

Question 14

According to the text, outsourcing is hiring others to do noncore activities.

Accepted Answer

The text states that outsourcing means hiring others to do noncore activities.

Question 15

According to the text, any activity in the value chain can be outsourced except for strategy and management.

Accepted Answer

The text does not explicitly state that strategy and management cannot be outsourced, therefore the statement is false.

Question 16

An important consideration in design is the extent to which the international company's products and services will be standardized across nations or regions.

Accepted Answer

Standardization of products and services across nations or regions is an important consideration in international design as it can save costs and increase efficiency for the company. However, it may also require adaptation to local cultural, legal, and technical requirements.

Question 17

Outsourcing decisions, except for the decision to use global sources of supply, are extensions of the make-or-buy decisions of earlier eras.

Accepted Answer

The answer of Outsourcing decisions, except for the decision to...

Question 18

According to the text, when a company offshores activities, it relocates those activities to the facilities of another company that is located in a foreign location.

Accepted Answer

Offshoring refers to relocating a company's own activities to a foreign location, not necessarily to another company's facilities.

Question 19

Effective supply chain management can enhance a company's ability to manage regulatory, social, and other environmental pressures, both within a nation and globally.

Accepted Answer

Effective supply chain management can help a company stay compliant with regulations, ensure ethical and socially responsible practices in sourcing and manufacturing, and reduce its environmental impact. This can improve the company's reputation and ability to operate in markets both domestically and internationally.

Question 20

The primary reason for sourcing globally is to obtain lower prices.

Accepted Answer

The primary reason for sourcing globally is indeed to obtain lower prices. By sourcing products or components from countries where labor and production costs are lower, companies can save money and remain competitive in their respective industries. However, sourcing globally also involves other factors such as access to specialized skills or technologies, diversification of suppliers, and proximity to target markets.

Quiz 16: Global Operations and Supply Chain Management