Deck 14: Global Supply Chain and Service Integration

Question 1

A multinational corporation is a business enterprise that manages production establishments in at least five countries.

Answer 1

False

Question 2

Variations in currency exchange rates can affect both the demand for and the supply of goods across the world.

Answer 2

True

Question 3

Outsourcing noncore activities allows firms to focus on the activities that they do best and improve the overall performance of the organization.

Answer 3

True

Question 4

The major risk that can arise out of outsourcing is trademark infringement.

Question 5

The only reason for global production of goods is to access cheaper labor and operating cost in developing nations.

Question 6

While manufactured goods can be delivered anywhere in the world,due to the nature of services,they can only be delivered locally.

Question 7

Outsourcing has few risks,since production is being turned over to another company.

Question 8

Traditional outsourcing focuses on achieving higher performance,greater flexibility,and reduced costs.

Question 9

Outsourcing is the same as offshoring.

Question 10

Advances in technology,communication,and transportation since World War II has reduced the costs of trade and international production.

Question 11

Offshoring can be accomplished without outsourcing.

Question 12

A source factory is established to produce a specific item at low costs and has very limited capabilities.

Question 13

As long as a sound contract is produced and requirements are clear,cultural differences should not be a limitation of offshoring.

Question 14

McDonald's is an example of a horizontally integrated MNC that produces the same product in different countries.

Question 15

Security issues should be a key factor when evaluating outsourcing partners.

Question 16

Loss of direct control is a key source of problems with outsourcing.

Question 17

Customer service over the phone or Internet is commonly provided globally.

Question 18

When outsourcing,a firm should retain its core domain knowledge.

Question 19

Procurement is one production function that is seldom global.

Question 20

Globalization is a recent trend and has only been practical in the last 50 years.

Question 21

Tax-related issues are seldom a reason for globalization.

Question 22

According to the Foreign Policy Magazine Globalization Index,Mexico is considered one of the most global countries.

Question 23

Which of the following is not a "flattener" identified by Thomas Friedman in his book,The World is Flat: A Brief History of the Twenty-First Century?

A)Collapse of the Berlin Wall
B)Rise of the Web browser
C)Open source collaboration
D)Outsourcing
E)Higher education levels

Question 24

The adaptation approach to globalization achieves economies of scale by creating global operations.

Question 25

An operations strategy in which a distribution company performs a variety of services on behalf of another company is identified by what term by Thomas Friedman?

A)Outsourcing
B)Offshoring
C)Insourcing
D)In-forming
E)Open-sourcing

Question 26

Which of the following is not a reason for outsourcing?

A)Reduce costs
B)Gain access to needed skills
C)Focus on core business
D)Better quality control
E)Flexibility

Question 27

When McDonald's restaurants open in a foreign country and serve products similar to domestic products,it is an example of

A)A horizontally integrated MNC
B)A vertically integrated MNC
C)A diversified MNC
D)A virtually integrated MNC
E)A modernized MNC

Question 28

The arbitrage approach to globalization exploits the differences among national markets by locating separate parts of supply chains in different places.

Question 29

What type of factory is one established to produce specific items at low cost known as?

A)Offshore
B)Source
C)Server
D)Contributor
E)Outpost

Question 30

What is one benefit of outsourcing?

A)Converts fixed costs into variable costs
B)Increase costs
C)Increases control
D)Reduced transportation costs
E)Decreased responsibility

Question 31

Which is not an example of business process outsourcing?

A)Payroll services
B)Accounts payable
C)Insurance
D)Property accounting
E)Quality audits

Question 32

Manufacturing products at locations far from the home country is one of the most common functions of a global firm.

Question 33

A company explores global production for all the following reasons except when

A)Accessing cheaper labor costs.
B)Accessing new markets.
C)Accessing knowledge or skills.
D)Accessing resources.
E)All of these options are reasons.

Question 34

New product innovation is a business function that is difficult to globalize.

Question 35

The United States is considered to be a highly globalized country.

Question 36

Which of the following is not a typical function that can easily be globalized?

A)Manufacturing
B)Procurement
C)Maintenance and monitoring of equipment
D)Customer support
E)Inspections

Question 37

As long as the new firm has a good track record,creating appropriate performance measures at the onset of a new relationship is not important.

Question 38

Technology is increasingly allowing maintenance and monitoring of equipment from remote locations.

Question 39

Current employees should not be involved or told about efforts to outsource.

Question 40

What type of factory can individual international production facilities eventually become as they gain additional competence?

A)Server
B)Outpost
C)Lead
D)Contributor
E)Source

Question 41

What type of factory are Mexican production facilities known as maquiladoras examples of?

A)Offshore factory
B)Source factory
C)Server factory
D)Contributor factory
E)Outpost factory

Question 42

While companies now outsource many services,the initial reason companies started outsourcing the manufacturing of components in the 1970s was to minimize

A)Transportation costs..
B)Production costs
C)Inspection costs.
D)Managerial costs.
E)Accounting costs.

Question 43

What is one common way that emerging nations encourage development in the country by a MNC?

A)Establishing tax-free production zones
B)Free transportation
C)Matching salaries
D)Supplemental advertising
E)Research collaboration

Question 44

When a firm uses this approach to globalization they are attempting to boost revenue and market share by maximizing its local presence in a country.

A)Aggregation
B)Adaptation
C)Annexation
D)Arbitrage
E)Animation

Question 45

Nokia makes mobile phones in plants around the world to serve a global customer base.Nokia is an example of what?

A)A horizontally integrated MNC
B)A vertically integrated MNC
C)A diversified MNC
D)A virtually integrated MNC
E)A modernized MNC

Question 46

Which of the following would not be a goal of outsourcing?

A)To focus on core strategies
B)To reduce costs and improve functionality
C)To improve competitiveness
D)To improve flexibility
E)Increasing control of production quality

Question 47

What is the most common reason for locating production facilities overseas?

A)Access to cheaper labor and operating costs
B)Gain access to specific skills
C)Access to additional resources
D)Exposure to new markets
E)Opportunity for financial incentives

Question 48

Which distribution facility normally plays a key role in facilitating global production?

A)Large distribution facilities
B)International sea port
C)Rail lines
D)Good highways
E)Airports

Question 49

Which of the following is not a benefit of the globalization of industries?

A)Production of goods worldwide
B)Broader access to manufactured goods
C)Broader access to services
D)Wider access to investment funds
E)Reduced competition

Question 50

A factory that is put in a foreign country to serve that specific country or region is a/an ____.

A)Source factory
B)Contributor factory
C)Server factory
D)Outpost factory
E)Lead factory

Question 51

When a firm locates a production facility in a country,provides employment,and participates in community activities,what advantage might the company achieve?

A)Reduce transportation expenses
B)Exploit local resources
C)Minimize labor costs
D)Allow the company to transform from a "foreign" firm to a local firm
E)Save on taxes

Question 52

What effect on productivity do most IT organizations experience during the first year of an offshoring agreement?

A)No change
B)20% increase in productivity
C)20% decrease in productivity
D)100% increase in productivity
E)100% decrease in productivity

Question 53

The basic premise of Thons Friedman's book,The World is Flat: A Brief History of the Twenty-First Century,is that the competitive playing fields between industrial and emerging market countries are changing.What describes the change?

A)Industrial countries are maintaining an advantage.
B)Emerging markets are maintaining an advantage.
C)Emerging markets are gaining an advantage.
D)Industrial countries are gaining an advantage.
E)The playing fields are leveling.

Question 54

When an organization wants to begin international production,what is the classification of the type of factory they would probably use?

A)Offshore
B)Source
C)Server
D)Outpost
E)Lead

Question 55

Which of the following business process activities is least likely to be outsourced?

A)Research and development
B)Payroll
C)Accounts payable
D)Insurance
E)Benefits administration

Question 56

If a firm uses the arbitrage approach to globalization,with respect to coordination,how should the company's international operations be connected?

A)By function,with emphasis on vertical relationships
B)By business,with emphasis on horizontal relationships
C)By country
D)By region
E)By scope,through standardization

Question 57

When did the "first era of globalization," characterized by rapid growth in international trade and investment,occur?

A)18th century
B)19th century
C)20th century
D)Before the 18th century
E)After the 20th century

Question 58

Rapid innovations in technology outsourcing require companies to

A)Invest heavily in new technology.
B)Maintain intensive research and development facilities.
C)Estimate needs at least three years in advance.
D)Hire recent college graduates.
E)Invest in continuous education.

Question 59

Which of the following is not a factor that can contribute to a successful offshoring relationship?

A)People (knowledge,language)
B)The product being delivered
C)Technical infrastructure
D)Client interface
E)Business infrastructure

Question 60

Examples of problems that often arise from outsourcing include all the following except

A)System fragmentation.
B)Internal coherence.
C)Improved development times.
D)Employee morale.
E)Impact on job security.

Question 61

Which of the following statements is not supported by Thomas Friedman's triple convergence concept?

A)The proposed "flatteners" converged around the year 2000.
B)The "flatteners" required firms to collaborate horizontally.
C)The Soviet economic plan was rejected.
D)The fall of the Berlin Wall added brainpower to the global playing field.
E)The "flatteners" operate independently from one another.

Question 62

Describe three broad groups of multinational corporations.

Question 63

Which of the following is not a supply chain risk associated with offshoring?

A)Shipping delays
B)Unavailability of shipping capacity
C)Issues with customs
D)Cost variations from foreign exchange fluctuations
E)Outdated technology

Question 64

Identify and describe six distinct categories for international production facilities.

Question 65

Identify four production functions that are often globalized.

Question 66

In his book,Thomas Friedman identifies Wal-Mart as an example of a company that uses what very effectively to streamline item sales,distribution,logistics,and shipping?

A)Oil futures
B)Technology
C)Marketing leverage
D)Clout with suppliers
E)Personnel

Question 67

Describe the difference between outsourcing and offshoring.

Question 68

What term refers to an increasing global connectivity,integration,and interdependence in the economic,social,technological,cultural,political,and ecological spheres?

A)Aggregation
B)Homogenization
C)Globalization
D)Hegemonism
E)Recombination

Question 69

Identify four commonly offshored functions.

Question 70

Identify three items that should be evaluated very carefully when considering to outsource.

Question 71

Provide four reasons a company might have for exploring global production?

Question 72

Identify three goals of outsourcing a particular product or service.

Question 73

Which of the following is not an example of a financial factor that contributes to the success of an offshoring relationship?

A)Workers' language skills
B)Intellectual property protection
C)Tax laws
D)Customs laws
E)Telecom regulations

Question 74

Identify four "flatteners" described by Thomas Friedman in The World is Flat: A Brief History of the Twenty-First Century.

Question 75

Define the three approaches to global integration.