Question 1

One production facility will usually be favored when
A) fixed costs are low.
B) demand is higher than the minimum efficient scale.
C) goods have a low value-to-weight ratio.
D) unemployment is very low.
E) a company is extremely profitable.

Accepted Answer

Fixed costs are the costs that do not change with the level of output. When fixed costs are low, it is more economical to have one production facility because the fixed costs are spread over a larger number of units.

Question 2

When considering the one-versus-many location for production facilities for components and raw materials some of the most important considerations are: fixed costs,minimum efficient scale and its comparison to demand,and the value-to-weight ratio.

Accepted Answer

These are indeed important considerations when deciding on a one-versus-many location for production facilities for components and raw materials.

Question 3

The production system of a hair and nail salon would be called a manufacturing system.

Accepted Answer

A manufacturing system typically involves the creation of physical products through a series of steps or processes. A hair and nail salon provides services rather than physical products, and therefore does not fit the definition of a manufacturing system. A more appropriate term for the salon's production system might be a service delivery system.

Question 4

One advantage of global procurement is that the firm can maximize its flexibility by allocating its orders among suppliers in a dynamic way and the firm has access to more suppliers that can generally provide lower costs than domestic suppliers.

Accepted Answer

Global procurement allows a firm to choose from a wider pool of suppliers, which can create opportunities for cost savings and increase flexibility in how orders are allocated. Domestic suppliers may have limited capacity or may not be able to offer competitive pricing.

Question 5

When the demand is equal or lower than the minimum efficient scale,multiple production facility locations are preferred.

Accepted Answer

When demand is equal or lower than the minimum efficient scale, it is more efficient to concentrate production in a single location to minimize costs and avoid inefficiencies of operating multiple facilities below their most efficient scale.

Question 6

In operations management,the acquisition of goods and services is referred to as logistics.

Accepted Answer

Logistics refers to the entire process of planning, implementing, and controlling the movement of goods and services from the point of origin to the point of consumption, while acquisition refers specifically to the process of obtaining goods and services.

Question 7

The supply chains of global businesses such as Boeing,Ford,United Airlines,and the pharmaceutical companies Merck and Pfizer are known as _____ supply chains.
A) environmental
B) global
C) enterprise
D) telecommunication
E) multi-national

Accepted Answer

The term "global" accurately describes the supply chains of these businesses, as they involve sourcing materials and components from various countries, manufacturing and assembly in different locations, and distributing products to global markets. The other choices do not accurately describe the supply chains of these specific businesses.

Question 8

A production system is a system that businesses use to create the goods and services or to produce the products.

Accepted Answer

A production system is defined as a system used by businesses to produce goods and services or manufacture products.

Question 9

ERP systems aim to
A) store all information in multiple databases.
B) represent each business function by a module.
C) design the system as a collection of functions.
D) eliminate the need for internetworking networks.
E) reduce a business's reliance on software.

Accepted Answer

ERP systems are designed to represent each business function by a module, allowing for a comprehensive and integrated view of the business processes. The other choices do not accurately describe the purpose of an ERP system.

Question 10

The three major considerations for deciding the location of production facilities for products are: does the product serve the needs of all customers around the world,proximity to market and proximity to suppliers,and the effect on product's image being produced in that location.

Accepted Answer

These are the three major considerations for deciding the location of production facilities for products.

Question 11

Software packages designed to integrate the majority of a firm's business processes,execute all transactions related to the firm's business processes being integrated,store each piece of data only once in an enterprise-wide database,allow access to data and information in real time,and operate in a client-server environment,traditional or web-based are called enterprise resource planning systems.

Accepted Answer

This statement accurately describes enterprise resource planning systems.

Question 12

A supply chain encompasses all the activities associated with the flow and transformation of goods and services from raw material to the end user.

Accepted Answer

This is a correct definition of a supply chain. It includes activities such as sourcing, manufacturing, transportation, distribution, and customer service.

Question 13

The practice of producing components and raw materials in-house AND purchasing them from suppliers is referred to as a supply-chain malfunction.

Accepted Answer

The practice of producing components and raw materials in-house AND purchasing them from suppliers is known as a dual-sourcing strategy, not a supply-chain malfunction.

Question 14

Boeing buying from thousands of suppliers in more than 100 countries,but only having production facilities in the U.S.is an example of global procurement and domestic production.

Accepted Answer

Boeing's procurement strategy involves sourcing materials and parts from suppliers all over the world, but its final assembly and production facilities are located in the United States. This is a common example of global procurement and domestic production.

Question 15

The activities in operations management can be grouped into four business functions: procurement,production,logistics,and research and development.

Accepted Answer

The activities in operations management are generally grouped into these four functions.

Question 16

______ refers to the management of the direct resources that are involved in the production system of a business organization.
A) Procurement management
B) Operations management
C) Logistics management
D) Research and development
E) Marketing management

Accepted Answer

Operations management involves managing the resources involved in the production system of a business organization, such as raw materials, equipment, and labor. Procurement management involves the purchasing of these resources, logistics management involves the transportation and distribution of finished products, research and development focuses on creating new products, and marketing management involves promoting and selling products.

Question 17

Most of the activities in operations management can be grouped into the following business functions EXCEPT:
A) procurement
B) logistics
C) production
D) research and development
E) selling

Accepted Answer

Selling is not a business function in operations management.

Question 18

A major advantage of making components and raw materials in-house is that the firm is not required to honor protections of intellectual property.

Accepted Answer

Making components and raw materials in-house does not exempt the firm from honoring intellectual property protections. The firm is still obligated to respect the intellectual property rights of others.

Question 19

The property of ERP systems to handle the accounting standards of multiple countries is called the multi-currency property.

Accepted Answer

The ability to handle the accounting standards of multiple countries is referred to as multi-language or multi-legislation capability, not multi-currency. Multi-currency refers to the ability to handle transactions in various currencies.

Question 20

When a firm has been making goods and services in-house,and then decides to buy these goods and services from suppliers is referred to as offshoring.

Accepted Answer

Offshoring refers to the practice of a company relocating its business process to another country. When a firm decides to buy goods and services from suppliers instead of producing them in-house, it is referred to as outsourcing.

Quiz 13: Global Operations and Supply-Chain Management

One production facility will usually be favored when