Deck 11: Global Location Decisions

Question 1

Facility location is a business decision that will ultimately impact issues like project cost,shareholder and customer reaction,as well as lead times and customer service levels.

Answer 1

True

Question 2

According to the textbook,two models that utilize quantitative data,which can help determine the attractiveness of one location versus another,are the Break-Even Model and the Extrapolated Average Cost Model.

Answer 2

False

Question 3

Regional trade agreements and the World Trade Organization provide a framework for managers in terms of investigating important facility location elements like tariffs,costs,and the free flow of goods and services in different regions of the world.

Answer 3

True

Question 4

A list of quality-of-life factors would most likely include proximity to customers,proximity to suppliers,tariff rates,and currency stability.

Question 5

A "lead factory" is set up in a location with an abundance of advanced suppliers,competitors,research facilities and knowledge centers in order to have access to the most current information on materials,components,technologies and products.

Question 6

A country that imposes high tariffs encourages foreign-based companies to import goods.

Question 7

Startup and other smaller firms do not typically benefit from locating in cluster areas.

Question 8

Global location decisions are made to optimize the performance of the supply chain and be consistent with the firm's competitive strategy.

Question 9

While the development and proliferation of the Internet and web-based commerce has not completely eliminated the relevancy of facilities location,because of the Internet,the speed of delivery and cost in serving the customer are no longer factors in determining the strategic location of an organization's facilities.

Question 10

According to the text,with increasing globalization the access to global markets and corporate networks makes the role of location less important as a source of competitive advantage.

Question 11

While business clusters seem logical in well-established areas with developed economies like Silicon Valley and Hollywood,California,because companies can easily collaborate,compete,and share knowledge,some high-tech clusters have developed in areas with emerging economies such as Costa Rica,the Philippines,and Uganda.

Question 12

Many multinational corporations are moving their facilities and headquarters out of Taiwan and some Southeast Asian countries in order to take advantage of the proximity to customers.The more attractive customer markets are developing in China.

Question 13

China's economy is shifting from labor-intensive industries to areas like marketing and the production of high technology products that typically provide higher levels of value.

Question 14

The critical issues in sustainable development are energy consumption/production,air pollution and climate change.

Question 15

The Americas have two primary regional trade agreements,NAFTA,an agreement between the United States,Canada,and Mexico,and COMESA,an agreement between all of the South American countries.

Question 16

The European Union (EU)created the world's largest free trade area.

Question 17

Using the weighted-factor rating model,the location with the lowest total weighted score is the recommended location.

Question 18

While many developing countries are attractive to companies seeking out low labor costs,there are other important factors such as productivity levels,employee skill and education levels,turnover rates,and employment trends that certain industries find just as important,if not more important,in determining facilities' location.

Question 19

A project with environmental implications is the Keystone XL pipeline.

Question 20

According to the text,the primary objective of an offshore factory is to take advantage of low labor costs.

Question 21

Which of the following is a project that has environmental implications concerning public health and climate change?

A)​MERCOSUR
B)​Development Alliance
C)​Microsoft Project
D)​Keystone XL pipeline

Question 22

When a number of interconnected companies and institutions from a particular field are located in a single geographic location,that location is referred to is a(n):

A)​Business cluster
B)​Metroplex
C)​Regional business center
D)​Industrial point

Question 23

Examples of regional trade agreements include all of the following EXCEPT:

A)​Association of Southeast Asian Nations (ASEAN)
B)​European Union (EU)
C)​Association of African Markets (AAM)
D)​Southern Common Market (MERCOSUR)

Question 24

Organizations that primarily compete on speed of delivery,such as FedEx and UPS,utilize which of the following approaches for location determination:

A)​Sourcing center
B)​Hub and spoke
C)​Air and ground
D)​LTL consolidation

Question 25

Which of the following is a critical issue in sustainable development?

A)​Labor and legal problems
B)​Energy consumption/production
C)​Countertrade
D)​Supply base optimization

Question 26

Consideration of regional trade agreements is critical to the facility location decision process because of their impact on which of the following?:

A)​Tariffs
B)​Costs
C)​Free flow of goods and services
D)​All of these

Question 27

Some companies import components,use them in the production of their end items,and ultimately export them to other countries.If a company wanted to import the components duty-free,use those components in the production of their end items,and then export them to other countries,they would most likely utilize a(n):

A)​Duty-free Territory
B)​Foreign Trade Zone
C)​International Cross Docking Zone
D)​International Processing Center

Question 28

Which of the following trade agreements was set up after WWII and originally consisted of six countries?

A)​Association of Southeast Asian Nations (ASEAN)
B)​European Union (EU)
C)​Association of African Markets (AAM)
D)​Southern Common Market (MERCOSUR)

Question 29

According to the text,when the location of a factory is dictated by low production costs,fairly developed infrastructure and availability of skilled workers the factory is referred to as a(n):

A)​Offshore factory
B)​Source factory
C)​Server factory
D)​Lead factory

Question 30

Which of the following strategic foreign facilities is set-up primarily to avoid tariff barriers,minimize exchange risk,and/or take advantage of government incentives? Ultimately the factory operates as most normal factories making only minor improvements in either the products or processes.

A)​Offshore factory​
B)​Server factory
C)​Source factory
D)​Outpost factory

Question 31

Your company needs to determine the appropriate location of a factory in order to take advantage of government incentives and avoid tariff barriers,the type of factory needed can be referred to as a(n):

A)​Offshore factory
B)​Source factory
C)​Server Factory
D)​Lead Factory

Question 32

Which of the following would be considered a quality of life factor?

A)​Education
B)​Arts,culture,and recreation
C)​Community safety
D)​All of these

Question 33

Which of the following regional trade agreements is paired with the appropriate region of the world?

A)​NAFTA - Southeast Asian Nations
B)​COMESA - United States,Canada,and Mexico
C)​MERCOSUR - Argentina,Brazil,Paraguay,and Uruguay
D)​EU - Middle East nations,not including Israel

Question 34

The Brundtland Commission defines ____ as the ability to meet the needs of the present without compromising the ability of future generations to meet their own needs.

A)​Lean manufacturing
B)​Sustainable development
C)​Six Sigma manufacturing
D)​Progressive design

Question 35

Which of the following issues is (are)important to consider when trying to determine the location of a firm's facilities?

A)​The stability in the location considered
B)​Environmental issues regulated by domestic laws or international trade agreements
C)​Access to suppliers from the location considered
D)​All of these

Question 36

Which of the following is a factor in choosing a location?

A)​Currency Stability
B)​Proximity to Markets
C)​Access to Suppliers
D)​All of these

Question 37

Which of the following factors serves as a magnet for business clusters?

A)​Property taxes
B)​Research parks
C)​Low manufacturing costs
D)​Low utility costs

Question 38

Which of the following is NOT a reason for locating in a business cluster?

A)​Technology sharing
B)​Supply chain improvements
C)​Sophisticated retailers
D)​Competition

Question 39

Which of the following strategic foreign facilities is set-up primarily produce products at a low cost with minimal technical and managerial resources? The items produced at these factories are often exported to countries where costs to produce similar items would be higher.

A)​Offshore factory
B)​Server factory
C)​Source factory
D)​Outpost factory

Question 40

Which of the following secures the right of employees to decide whether or not to join or financially support a union?

A)​Union shop laws
B)​Union planning forums
C)​Ethical union initiatives
D)​Right-to-work laws