Question 1

Other things being equal, if the fixed costs of setting up a production plant are very high, _____ can make sense.

Accepted Answer

In some cases the fixed costs of setting up a production plant are so high that a firm must serve the world market from a single location or from a very few locations.In this scenario,other things being equal,serving the world market from a single plant sited at a single (optimal)location can make sense.

Question 2

The Six Sigma methodology is a direct descendant of the _____ philosophy that was widely adopted,first by Japanese companies and then American companies during the 1980s and early 1990s.

Accepted Answer

The principal tool that most managers now use to increase the reliability of their product offering is the Six Sigma quality improvement methodology.The Six Sigma methodology is a direct descendant of the total quality management (TQM)philosophy.

Question 3

The opening case in the text that profiles the rise of the automobile industry in India mentions that Nissan has invested in a new factory close to Hyundai's in the southern city of Chennai.If it were to be assumed that Nissan chose the manufacturing location based on the ready availability of an appropriately skilled labor pool and supporting industries,it could be said that Nissan was leveraging:

Accepted Answer

Externalities include the presence of an appropriately skilled labor pool and supporting industries.Such externalities can play an important role in deciding where to locate manufacturing activities.

Question 4

The higher the number of "sigmas":

Accepted Answer

The higher the number of "sigmas" the smaller the number of errors.

Question 5

The key decision factors that pertain to where an international firm locates its manufacturing facilities can be grouped under three broad headings: country factors,technological factors,and _____.

Accepted Answer

For the firm contemplating international production,a number of factors must be considered.These factors can be grouped under three broad headings: country factors,technological factors,and product factors.

Question 6

According to the text,the level of fixed costs,the minimum efficient scale,and _____ are three characteristics of a manufacturing technology that are particularly interesting to international firms when making manufacturing location decisions.

Accepted Answer

The type of technology a firm uses to perform specific manufacturing activities can be pivotal in location decisions.Three characteristics of a manufacturing technology are of interest here: the level of fixed costs,the minimum efficient scale,and the flexibility of the technology.

Question 7

One drawback of ISO 9000 certification is that it has proved to be:

Accepted Answer

Although the ISO 9000 certification process has proved to be somewhat bureaucratic and costly for many firms,it does focus management attention on the need to improve the quality of products and processes.

Question 8

Which of the following is a result of improved quality control?

Accepted Answer

The firm that improves its quality control will also reduce its costs of value creation.Improved quality control reduces costs by: increasing productivity because time is not wasted producing poor-quality products that cannot be sold,leading to a direct reduction in unit costs;lowering rework and scrap costs associated with defective products;reducing the warranty costs and time associated with fixing defective products.

Question 9

The TQM philosophy was developed by a number of American consultants.Which of the following individuals is one of them?

Accepted Answer

The TQM philosophy was developed by a number of American consultants such as W.Edward Deming,Joseph Juran,and A.V.Feigenbaum.

Question 10

_____,one of the American consultants credited with developing TQM,argued that management should embrace the philosophy that mistakes,defects,and poor-quality materials are not acceptable and should be eliminated.

Accepted Answer

Deming argued that management should embrace the philosophy that mistakes,defects,and poor-quality materials are not acceptable and should be eliminated.

Question 11

Under _____,Deming believed that achieving better quality requires the commitment of everyone in the company.

Accepted Answer

Deming believed that achieving better quality requires the commitment of everyone in the company.

Question 12

_____ include(s)the presence of an appropriately skilled labor pool and supporting industries that can play an important role in deciding where to locate manufacturing activities.

Accepted Answer

Externalities include the presence of an appropriately skilled labor pool and supporting industries.Such externalities can play an important role in deciding where to locate manufacturing activities.

Question 13

The _____ declines with output until a certain output level is reached,at which point further increases in output realize little reduction in unit costs.

Accepted Answer

The "unit cost curve" declines with output until a certain output level is reached,at which point further increases in output realize little reduction in unit costs.

Question 14

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

Accepted Answer

Efficient supply chain management reduces the amount of inventory in the system and increases inventory turnover,which means the firm has to invest less working capital in inventory and is less likely to find excess inventory on hand that cannot be sold and has to be written off.

Question 15

Which of the following is an advantage related to both relatively low level of fixed costs and low minimum efficient scale?

Accepted Answer

As in the case of low fixed costs,the advantages of a low minimum efficient scale include allowing the firm to accommodate demands for local responsiveness or to hedge against currency risk by manufacturing the same product in several locations.

Question 16

Which of the following is a step in TQM suggested by Deming?

Accepted Answer

Deming argued that management has the responsibility to train employees in new skills to keep pace with changes in the workplace.

Question 17

The European Union requires that the quality of a firm's manufacturing processes and products be certified under a quality standard known as _____ before the firm is allowed access to the EU marketplace.

Accepted Answer

The European Union requires that the quality of a firm's manufacturing processes and products be certified under a quality standard known as ISO 9000 before the firm is allowed access to the EU marketplace.

Question 18

Which of the following is true about Six Sigma?

Accepted Answer

The higher the number of "sigmas" the smaller the number of errors.At Six Sigma,a production process would be 99.99966 percent accurate,creating just 3.4 defects per million units.While it is almost impossible for a company to achieve such perfection,Six Sigma quality is a goal that several strive toward.

Question 19

The principal tool that most managers now use to increase the reliability of their product offering is _____,a statistically based methodology for improving product quality.

Accepted Answer