Deck 15: Global Manufacturing and Materials Management

Question 1

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

A) Deming
B) Juran
C) Vernon
D) Krugman
E) Porter

Answer 1

A

Question 2

Saving time by not producing poor quality products that cannot be sold,lowering rework costs,lowering scrap costs,and lowering warranty costs are the intended results of:

A) total feature management
B) reengineering
C) logistics
D) total quality management
E) materials management

Answer 2

D

Question 3

Which of the following is not a suggestion from Deming?

A) management should create an environment in which employees will not fear reporting problems or recommending improvements
B) work standards should be defined as number or quotas
C) quality of supervision should be improved by allowing more time for supervisors to work with employees and by providing them with the tools they need to do the job
D) achieving better quality requires the commitment of everyone in the company
E) work standards should be defined to include some standard of quality

Answer 3

B

Question 4

Two important objectives shared by both manufacturing and materials management are to simultaneously:

A) increase quality and increase revenues
B) increase product awareness and lower costs
C) lower costs and increase quality
D) increase revenues and decrease customer complaints
E) increase quality and reduce inventories

Question 5

(1)The level of its fixed costs,(2)its minimum efficient scale,and (3)_______________ are three characteristics of a manufacturing technology that are particularly interesting to international firms when making manufacturing location decisions.

A) its flexibility
B) its variable costs
C) the technological sophistication of the manufacturing process
D) the cost of moving manufacturing executives overseas
E) its factors of production

Question 6

The larger the minimum efficient scale of a plant,the greater the argument for centralizing production in a single location or a limited number of locations is the implication of the _____________ concept.

A) consumer input
B) economies of scale
C) production
D) materials management
E) TQM

Question 7

Which of these in relation to materials management refers to the procurement and physical transmission of material through the supply chain,from suppliers to consumers?

A) interchange
B) logistics
C) reciprocation
D) conveyance
E) operations

Question 8

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

A) component expense curve
B) unit expense line
C) unit cost curve
D) component cost slope
E) marginal cost curve

Question 9

_____________ is the activity that controls the transportation of physical materials through the value chain,from procurement through production and into distribution.

A) operations
B) production
C) materials management
D) bureaucracy
E) logistics

Question 10

Which of the following is not a result of improved quality control?

A) greater product quality means lower warranty costs
B) increased product quality means lower scrap costs
C) increased quality leads to lower unit costs
D) productivity increases because time is not wasted manufacturing poor-quality products that cannot be sold
E) increased product quality means higher rework

Question 11

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

A) Internalities
B) Externalities
C) Management
D) Administration
E) Factors of production

Question 12

A firm should locate its various manufacturing activities where the economic,political,and cultural conditions are _____________ to the performance of those activities.

A) beneficial
B) challenging
C) indifferent
D) government-protected
E) extraneous

Question 13

The key decision factors that pertain to where an international firm locates its manufacturing facilities can be grouped under three broad headings.These are:

A) political factors, economic factors, and legal factors
B) country factors, technological factors, and product factors
C) product factors, service factors, and labour factors
D) language factors, cultural factors, and transportation factors
E) market factors, production factors, and logistics factors

Question 14

The concept of economies of scale tells us that as plant output expands unit costs do what?

A) increase
B) decrease
C) remain the same
D) expand exponentially
E) decrease exponentially

Question 15

In some cases the _______________ costs of setting up a manufacturing plant are so high that a firm must serve the world market from a single location or from a very few locations.

A) changeable
B) reoccurring
C) fixed
D) variable
E) destination

Question 16

The main management technique that companies are utilizing to boost their product quality is:

A) total quality management
B) materials management
C) reengineering
D) logistics
E) Deming quality management system

Question 17

What is the process of creating a product called?

A) bureaucracy
B) materials management
C) production
D) administration
E) R&D

Question 18

Before the firm is allowed access to the European marketplace,the European Union requires that the quality of a firm's manufacturing processes and products be certified under a quality standard known as __________________.

A) total quality management
B) reengineering
C) BT 12000
D) ISO 9000
E) QM 15000

Question 19

Demands for local responsiveness creates pressures to ____________ the major national or regional markets in which the firm does business or to implement flexible manufacturing processes that enable the firm to customize the product coming out of a factory according to the market in which it is to be sold.

A) receive supplies from
B) market to
C) centralize logistic processes to
D) decentralize manufacturing activities to
E) increase customization for

Question 20

The opening case on LCD TVs shows what?

A) how long-term relationships work with new international retailers
B) the benefits of a tightly managed and coordinated global manufacturing and logistics system
C) the use of Cad/Cam systems
D) the change in international tracking system
E) the in-house/outsourcing balance

Question 21

According to the textbook,_________________ manufacturing technologies provide a company the ability to produce a wider variety of end products at a unit cost that at one time could be achieved only through the mass production of a standardized output.

A) multifaceted
B) lateral
C) side by side
D) flexible
E) mass customization

Question 22

What refers to the ability to produce a wider variety of end products at a unit cost that at one time could be achieved only through the mass production of a standardized output?

A) assembly-line like customization
B) standardized customization
C) mass customization
D) economies of customization
E) product customization

Question 23

All of the following are advantages of flexible manufacturing except:

A) improved efficiency
B) flexible manufacturing technologies allow companies to customize products to suite the unique demands of small consumer groups
C) increase customer responsiveness
D) flexible manufacturing technologies help firms standardize products for different national markets
E) small production runs are economical

Question 24

Which of the following is not one of the objectives of flexible manufacturing technology,or lean production?

A) reduce setup times for complex equipment
B) bring a factory into compliance with ISO 9000
C) improve quality control at all stages of the manufacturing process
D) increase utilization of individual machines through scheduling
E) none of these answers is correct

Question 25

Many electronic components and pharmaceuticals have _________________ value-to-weight ratios,whereas refined sugar,paint,and petroleum products have ________________ value-to-weight ratios.

A) high; low
B) low; high
C) low; no
D) no; high
E) insignificant; significant

Question 26

Initially,many foreign factories are established where:

A) labour costs are high
B) labour costs are low
C) labour costs are on par with the manufacturer's typical costs
D) labour intensive manufacturing is the exception rather than the norm
E) labour is more productive

Question 27

Needs that are the same all over the world are referred to as ______________ needs.

A) specific
B) domestic
C) universal
D) individualistic
E) global

Question 28

What is a grouping of various types of machinery,a common materials handler,and a centralized cell controller?

A) malleable manufacturing unit
B) elastic manufacturing station
C) rigid machine unit
D) flexible machine cell
E) adaptive manufacturing module

Question 29

Concentration of manufacturing makes sense when:

A) trade barriers are high
B) the product's value-to-weight ratio is high
C) the product's value-to-weight ratio is low
D) the product does not serve universal needs
E) the product's value-to-volume ratio is high

Question 30

In terms of making a location decision,when fixed costs are substantial,the minimum efficient scale of production is high,and flexible manufacturing technologies are available,it makes sense to:

A) manufacture the product in every country in which it is sold
B) concentrate production at a few choice locations
C) spread production over as many locations as possible
D) outsource production to a third party
E) disperse distribution centres and maintain higher minimum inventories

Question 31

What are manufacturing technologies that are designed to reduce setup times,increase use of individual machines through better scheduling,and improve quality control at all stages of manufacturing called?

A) multifaceted production
B) lean production
C) lateral production
D) temporal production
E) six sigma

Question 32

Two product factors impact location decisions.These are:

A) the product's value-to-weight ratio and whether the product serves universal needs
B) the product's shape and the product's weight
C) the product's content and the product's point-of-origin
D) the product's technological sophistication and the product's shape
E) product's packaging and durability

Question 33

Decentralization of the location of a firm's manufacturing locations makes sense for all of the following reasons except:

A) trade barriers are low
B) volatility in important exchange rates is expected
C) the production technology has low fixed costs, low minimum efficient scale or a flexible manufacturing technology exists
D) the product does not serve universal needs
E) the product's value-to-weight ratio is low

Question 34

_________________ customization implies that a firm may be able to customize its product range to suit the needs of different customer groups without bearing a cost penalty.

A) Assembly-like
B) Standardized
C) Economic
D) Mass
E) Manufacturing

Question 35

Two product factors impact location decisions.These are (1)whether the product serves universal needs and (2)_____________.

A) the product's shape
B) the product's point-of-origin
C) the product's weight
D) the product's value-to-weight ratio
E) the product's volume

Question 36

There are two basic strategies for locating manufacturing facilities.These are:

A) concentrating them in the optimal location and serve the world market from there and, concentrate them in markets that are parts of major trade blocks
B) locate at least one manufacturing facility in each continent in which the firm is active and, concentrate manufacturing at an optimal location
C) decentralize them in major trading blocks, but not in smaller markets
D) concentrate them in markets that are part of major trade blocks and, centralizing them at a single location
E) concentrate them in the optimal location and serve the world market from there and, decentralizing them in various regional or national locations that are close to major markets

Question 37

One of Toyota's engineers,Ohno Taiichi,found many problems with the company's mass production system.Which of the following is not one of these problems?

A) the system was unable to accommodate consumer preferences for product diversity
B) long production runs created massive inventories that had to be stored in large warehouses which was expensive
C) the system ran too quickly for the employees to keep up which created a high turnover due to frustration and low evaluations
D) if the initial machine settings were wrong, long production runs resulted in the production of a large number of defects
E) small production runs were uneconomical

Question 38

The following two factors that correctly depict the manufacturing attributes of a product that has universal needs are:

A) since there are few national differences in consumer taste and preferences for such products, the need for local responsiveness is reduced, manufacturing should be concentrated at an optimal location
B) since there are many national differences in consumer taste and preferences for such products, the need for local responsiveness is reduced, manufacturing should be concentrated at an optimal location
C) since there are few national differences in consumer taste and preferences for such products, the need for local responsiveness is increased, manufacturing should take place in each major market in which the firm is active
D) since there are many national differences in consumer taste and preferences for such products, the need for local responsiveness is increased, manufacturing should take place in each major market in which the firm is active
E) since there are some national differences in consumer behaviour, but not in needs and perceived benefits, there is only moderate demand for local responsiveness and manufacturing needs only to be moderately dispersed

Question 39

Placing manufacturing facilities in one concentrated location makes sense for all of the following reasons except:

A) trade barriers are high
B) the product serves universal needs
C) important exchange rates are expected to remain relatively stable
D) the production technology has high fixed costs or a high minimum efficient scale or a flexible manufacturing technology exists
E) product's value-to-weight ratio is high

Question 40

When is decentralization of manufacturing appropriate?

A) the product serves universal needs
B) important exchange rates are expected to remain relatively stable
C) the product's value-to-weight ratio is high
D) trade barriers are high
E) high minimum efficient scale

Question 41

The arguments that support making component parts in-house (i.e.vertical integration)are fourfold:

A) lower costs, facilitates investments in highly specialized assets, protects proprietary product technology and, facilitates the scheduling of adjacent processes
B) greater flexibility, helps a firm capture orders from international customers, facilitates investments in highly standardized assets and, facilitates the scheduling of adjacent processes
C) helps a firm capture orders from international customers, lower costs, facilitates investments in highly standardized assets and, facilitates the scheduling of adjacent processes
D) lower costs, greater flexibility, facilitates the scheduling of adjacent customers and, facilitates investments in highly specialized assets
E) greater efficiencies, better quality control, protects against technology theft, and more responsive to customers

Question 42

In general,the trends toward just-in-time systems (JIT),computer-aided design (CAD),and computer-aided manufacturing (CAM)seem to have increased pressures for firms to establish __________ relationships with their suppliers.

A) strictly arms-length
B) intermediate term
C) long-term
D) short-term
E) closer

Question 43

Technology that is ______________ is proprietary product technology.

A) widely shared among firms
B) unique to a country
C) unique to the firm
D) unique to a particular industry
E) unique to the location

Question 44

Since issues of strategic flexibility and organizational control loom even larger for international businesses than purely domestic ones,international business should be particularly wary of _______ into component part manufacture.

A) horizontal integration
B) increased diversification
C) vertical integration
D) strategic integration
E) global integration

Question 45

The term __________ refers to the practice of outsourcing the production of some component parts to a foreign country in hopes that it may help the firm capture more orders from that country.

A) reciprocal trade tactic
B) neutralize trade
C) countertrade
D) offset
E) buyback

Question 46

In general,when substantial investments in specialized assets are required to manufacture a component,a firm will:

A) re-engineer the component to reduce costs
B) find a alternative method of manufacturing the component
C) contract out the production of the component rather than make it internally
D) discontinue making the product that the component goes into
E) prefer to make the component internally rather than contract it out to a supplier

Question 47

According to the textbook,the benefits of manufacturing components in-house seem to be greatest when all of the following factors are involved except:

A) when highly specialized assets are involved
B) when the firm is simply more efficient than external suppliers at performing a particular activity
C) when maximum flexibility is necessary
D) when vertical integration is necessary for protecting proprietary technology
E) when trade barriers are low

Question 48

An example of a(n)__________ relationships is Kodak's cooperative relationships with Canon.

A) operating arrangement
B) firm-to-firm cooperative arrangement
C) integral form of integration
D) strategic alliance
E) supplier alliance

Question 49

According to the textbook,for the typical manufacturing firm,material costs account for between __________ percent of revenues depending on the industry.

A) 15-25
B) 30-40
C) 50-70
D) 70-80
E) 80-90

Question 50

The two sources of improvement in the capabilities of a foreign factory are:

A) the increasing abundance of advanced factors of production in the nation in which the factory is located and pressure from the centre to improve a factory's cost structure and/or customize a product to the demands of consumers in a particular nation can start a chain of events that ultimately leads to development of additional capabilities at that factory
B) the increasing abundance of advanced factors of production in the nation in which the factory is located and the large amount of skilled workers in the area of which the factory is located
C) pressure from the centre to improve a factory's cost structure and/or customize a product to the demands of consumers in a particular nation can start a chain of events that ultimately leads to development of additional capabilities at that factory and increasing government regulations that benefit the factory
D) the large amount of skilled workers in the area of which the factory is located and increasing government regulations that benefit the factory
E) productivity improvements leads to excess manufacturing capacity that can be used elsewhere and increasing expertise of workers due to learning effects

Question 51

What are the type of decisions about whether a firm should make or buy the component parts that go into the final product known as?

A) end-user
B) synergistic
C) sourcing
D) quality
E) cost

Question 52

Although vertical integration is often undertaken to ____________,it may have the opposite effect.

A) increase customers
B) lower costs
C) find new suppliers
D) market internationally
E) improve quality

Question 53

Vertical integrating the manufacture of component parts increases an organization's scope,and the resulting increase in organizational complexity can raise a firm's cost structure.Which of the following is not a reason for this?

A) vertically integrated firms have to determine appropriate prices for goods transferred to subunits within the firm
B) the greater the number of subunits in an organization, the greater are the problems of coordinating and controlling those units
C) the firm that vertically integrates into component part manufacture may find that because its internal suppliers have a captive customer in the firm, they lack an incentive to reduce costs
D) vertically integrated firms have to find a way to distribute supplies to each subunit within a reasonable time frame
E) the greater the number of subunits the greater the amount of information that must be managed

Question 54

The advantages of buying component parts from independent suppliers are that it gives the firm the following advantages:

A) it may help the firm to capture orders from international customers, facilitates the scheduling of adjacent processes and, greater flexibility
B) greater flexibility, facilitates the scheduling of adjacent processes and, protects proprietary production technology
C) facilitates investments in highly specialized assets, protects proprietary product technology and, facilitates the scheduling of adjacent processes
D) greater flexibility, it can help drive down the firm's cost structure and, it may help the firm to capture orders from international customers
E) provides offsets, improved costs and new technologies

Question 55

The strategic role of foreign factories is typically to:

A) produce labour-intensive products at as low a cost as possible
B) appease foreign governments by producing jobs in their countries
C) increase product quality
D) provide domestic managers with foreign experience
E) increase market penetration by reducing source effects

Question 56

Strategic alliances ______ between the firm and its suppliers.

A) help in hiring
B) always work
C) expand slowly
D) increase revenue
E) build trust

Question 57

The greatest advantage of buying component parts from independent suppliers is:

A) lower costs
B) offsets
C) supports TQM
D) strategic flexibility
E) increased market penetration

Question 58

A major aspect of a transnational strategy is a belief in _____________--the idea that valuable knowledge does not reside just in a firm's domestic operations.

A) information sharing
B) knowledge effects
C) global learning
D) transnational sharing
E) intellectual equality

Question 59

For international businesses that source worldwide,scheduling problems can be worsened by the _________________ between the firm and its suppliers.

A) time and distance
B) differences in regulations
C) cultural differences
D) political conflicts
E) geographic distance and trade restrictions

Question 60

What is the potential for reducing costs through more efficient materials management?

A) enormous
B) moderate
C) minor
D) insignificant
E) unknown

Question 61

_______ enable a firm to optimize its production scheduling according to when components are expected to arrive by tracking component parts as they are shipped to an assembly plant.

A) Management systems
B) Information systems
C) Suppliers
D) Distributors
E) Collaborative intranets

Question 62

In the context of materials management,the acronym JIT stands for:

A) Jobber-In-Training
B) Job-In-Transit
C) Joint-In-Transpiration
D) Just-In-Time
E) Join-Integrate-Transfer

Question 63

What can a firm end up limiting by the commitments it makes to its alliance partners when it enters long-term alliances?

A) choice of suppliers
B) trade availability
C) decision freedom
D) strategic flexibility
E) financial risk

Question 64

The basic philosophy behind ____________ is to economize on inventory holding costs by having materials arrive at a manufacturing plant when needed to enter the production process?

A) management by objectives
B) reengineering
C) just-in-time
D) total quality management
E) CAD/CAM

Question 65

What are computer-aided design and computer-aided manufacturing systems known as?

A) total-quality management
B) just-in-time
C) management by objectives
D) reengineering system
E) CAD/CAM

Question 66

ISO 9000 is an Asian quality certification process.

Question 67

Unlike in a traditional system,_______ are spotted right away under a JIT system.

A) defective inputs
B) increasing costs
C) illegal operations
D) machinery problems
E) wastage

Question 68

In the context of materials management,the acronym EDI stands for:

A) Electronic Data Intelligence
B) Eliminate Distribution Intermediaries
C) Eastern Distribution Interchange
D) Effective Data Interchange
E) Electronic Data Interchange

Question 69

Suppliers typically use a(n)__________ link to send invoices to purchasers.

A) elastic demographic interchange
B) elastic data interchange
C) electronic data intelligence
D) electronic data interchange
E) internet

Question 70

Two important objectives shared by manufacturing and materials management are to lower costs and to simultaneously increase product quality.

Question 71

Pioneered by __________ firms during the 1950s and 1960s,just-in-time inventory systems now play a major role in most manufacturing firms.

A) German
B) American
C) Japanese
D) British
E) Canadian

Question 72

What system has a drawback that leaves a firm without a buffer stock of inventory?

A) total-quality management
B) just-in-time
C) management by objectives
D) reengineering system
E) CAD/CAM

Question 73

A standard designed to assure the quality of products and processes is referred to as ISO 9000.

Question 74

The name for the quid pro quo system found in international business,where the firm captures more orders from a country,is called what?

A) total-quality management
B) just-in-time
C) management by objectives
D) reengineering system
E) offsets

Question 75

Reengineering is the main management technique that companies are using to boost their product quality.

Question 76

Materials management is the activity that controls the transmission of physical materials through the value chain,from procurement through production and into distribution.

Question 77

Under a __________ system,parts enter the manufacturing process immediately; they are not warehoused.

A) just-in-time
B) reengineering
C) soft manufacturing
D) maximum fluency
E) flexible manufacturing

Question 78

Which of the following is a consequence of an EDI system?

A) production costs are increased
B) most paperwork between suppliers, shippers, and the purchasing firm is eliminated
C) it is difficult for suppliers, shippers, and the purchasing firm to communicate due to the complexity and slowness of the system
D) flexibility and responsiveness of the supply system is decreased
E) the potential for industrial espionage increases

Question 79

In 2012,the share of LCD TVs made by outsourced manufacturers dropped.

Question 80

According to the textbook,what systems require Internet-based computer links between a firm,its suppliers,and its shippers?

A) electronic data interchange
B) electronic data intelligence
C) elastic data interchange
D) elastic demographic interchange
E) effective data interchange