Deck 10: Supply Chain Design and Location Planning

Question 1

15)McDonald's and ______ have enjoyed remarkable long-term success operating around the world.

A)Kroger
B)Kohl's
C)Wal-Mart
D)Whataburger

Answer 1

C

Question 2

13)Total Cost = ______.

A)(Fixed Cost)x (Production Volume)+ (Variable Cost Per Unit)
B)(Fixed Cost)+ (Production Volume)+ (Variable Cost Per Unit)
C)(Fixed Cost)+ (Production Volume)x (Variable Cost Per Unit)
D)(Fixed Cost)x (Production Volume)x (Variable Cost Per Unit)

Answer 2

C

Question 3

12)______ is an innovation hub for firms in the pharmaceutical industry.

A)Sweden
B)United States
C)Finland
D)Australia

Answer 3

B

Question 4

19)Which of the following is NOT an example of logistical and transportation problems faced by companies that have operations in overseas locations?

A)congestion in ports
B)security risks from terrorism
C)dock strikes
D)risk of demand uncertainty

Question 5

7)Firms that focus on ______ often locate their facilities in reasonable proximity to the new market that they are planning.

A)accessing materials and resources
B)lowering the firm's cost
C)growing the firm's business
D)developing innovative products

Question 6

17)All of the following is true with regard to cultural issues when locating in foreign countries except ______.

A)it is critical to understand the religious and cultural practices in overseas locations
B)companies have to deal with gender differences in labor practices and in promoting products that can be sold to consumers
C)a firm's managers need to be fluent in the foreign country's language
D)it is critical to assume that every product will appeal to consumers in other cultures

Question 7

11)The phenomenon called ______ often occurs when there is a concentration of critical resources in a particular region.

A)clustering
B)grouping
C)categorization
D)classification

Question 8

5)Trade agreements such as ______ have made it attractive to companies to locate abroad.

A)FICO
B)GATT
C)PATT
D)WTA

Question 9

3)The decisions about each of the following can be changed fairly easily except decisions related to ______.

A)transportation
B)where to locate facilities
C)inventory
D)information Sharing

Question 10

18)Many ______ are not uncovered until the products reach the hands of consumers.

A)transportation Issues
B)quality and safety issues
C)currency and exchange rate risks
D)import/export restrictions

Question 11

10)Which of the following is an example of a business that is often forced to relocate to tap into new supplies of resources?

A)automotive manufacturing plant
B)petroleum business
C)paper mill
D)retail store

Question 12

6)Companies such as GM,GE,and Motorola have facilities in China and India mainly because of the ______.

A)tax incentives
B)well-established Infrastructure
C)lower labor costs
D)availability of natural resources

Question 13

4)A firm has no control over ______ factors that influence supply chain and location decisions.

A)technological
B)environmental
C)internal
D)infrastructural

Question 14

9)Many companies have been able to extend the life cycles of their ______ products by offering them in foreign countries.

A)mature
B)introductory
C)growth
D)decline

Question 15

1)Which of the following is NOT a key advantage of locating a plant in Mexico?

A)China's manufacturing wages are up to 30% lower than in Mexico.
B)The North American Free Trade agreement makes it easier.
C)Mexican manufacturers pay far less for natural gas than Chinese manufacturers.
D)Mexican businesses are able to take advantage of reduced transportation costs.

Question 16

8)BMW,Mercedes-Benz,Lexus,and Acura have all built plants in North America because ______.

A)of tax incentives
B)they want to enhance their local market opportunities
C)of lower labor costs
D)of the establishment of European Union

Question 17

14)Many American companies have moved their headquarters abroad in order to escape ______.

A)property taxes
B)tax rebates
C)favorable tax rates
D)financial incentives

Question 18

16)Supply chain and location decisions sometimes backfire because of all of the following except ______.

A)cultural issues
B)transportation issues
C)the potential loss of proprietary technology
D)location decisions are sequential and made in three stages

Question 19

2)In Aguascalientes,______ built a 21 million square-foot factory.

A)Honda
B)Ford
C)Toyota
D)Nissan

Question 20

20)______ is a reduction in the value of the currencies.

A)Inflation
B)Deflation
C)Distention
D)Devaluation

Question 21

32)Location decisions are ______.

A)nonsequential
B)made in four stages
C)made in six steps
D)sequential

Question 22

31)The objective in the last phase of the supply chain design and facility location process is to ______.

A)consider the availability of the necessary infrastructure
B)determine the number of facilities needed for the supply chain
C)come up with a final supply chain design that will maximize the profits for the company
D)determine the role each facility would play in meeting the market requirements

Question 23

30)Once the firm decides on the regions where facilities would be located (in Phase III),it must then ______.

A)determine the configuration of regional facilities
B)identify any internal constraints on its available capital
C)identify potential sites within each region for setting up these facilities
D)determine if the firm's future growth can be accomplished with its existing facilities

Question 24

39)With regard to location,which of the following is NOT true?

A)Companies seldom find an ideal location.
B)Companies typically find several satisfactory or acceptable locations to choose from.
C)Location decisions are nonsequential.
D)Location decisions are made in three stages.

Question 25

33)Stage 2 in the location decision is to select the ______.

A)country
B)city
C)site
D)region

Question 26

29)The overall objective of Phase II in the supply chain design and facility location process includes all of the following except ______.

A)the regions where the facilities will be located
B)the availability of the necessary infrastructure
C)the role each facility would play in meeting the market requirements
D)the number of facilities needed for the supply chain

Question 27

25)Phase III of the supply chain design and facility location process is to ______.

A)determine the configuration of regional facilities
B)determine location choices
C)design the supply chain
D)select potential sites for locating facilities

Question 28

35)For location decisions,in contrast to service companies manufacturing firms generally look for ______.

A)revenues
B)cost minimization
C)volumes sold
D)traffic volumes and patterns

Question 29

40)Which of the following is a more advanced quantitative technique for location analysis?

A)breakeven analysis
B)factor rating method
C)the transportation method
D)center-of-gravity method

Question 30

27)The third input to supply chain design is ______.

A)the firm's operational strategy
B)the identification of any internal constraints
C)the forecast of the potential global competition
D)the firm's competitive strategy

Question 31

37)A critical success factor at Stage 2 of location decisions is ______.

A)space to expand
B)visibility and traffic patterns
C)availability and cost of utilities
D)construction and land costs

Question 32

22)In reference to protection of private and intellectual property rights,IPRI stands for ______.

A)Intellectual Property Rights Index
B)Internal Property Rights Index
C)International Proprietary Reference Index
D)International Property Rights Index

Question 33

34)In Stage 1 of location decisions,the choice of a country generally depends on all of the following except ______.

A)market conditions
B)economic conditions
C)environmental restrictions
D)the legal system

Question 34

26)The second input to supply chain design is ______.

A)the firm's operational strategy
B)the forecast of the potential global competition that is likely to exist in each of the firm's markets
C)the firm's competitive strategy
D)the identification of any internal constraints on its available capital

Question 35

38)All of the following are critical success factors at Stage 3 of location decisions except ______.

A)size of site
B)visibility and traffic patterns
C)labor climate
D)space to expand

Question 36

28)If customer requirements vary,the firm would need ______.

A)a few large consolidated facilities
B)several smaller localized facilities
C)a few smaller localized facilities
D)several large consolidated facilities

Question 37

24)Phase II of the supply chain design and facility location process is to ______.

A)determine the configuration of regional facilities
B)design the supply chain
C)determine location choices
D)select potential sites for locating facilities

Question 38

23)There are ______ Phases in the Supply Chain Design and Location Decision-Making Process.

A)three
B)five
C)four
D)two

Question 39

21)The United States has ______ the amount of steel and lumber that can be ______ in order to prevent the domestic producers from being pushed out of the market.

A)restricted,exported
B)relaxed,manufactured
C)restricted,imported
D)relaxed,imported

Question 40

36)A critical success factor at Stage 1 of location decisions is ______.

A)proximity to raw materials
B)transportation costs
C)space to expand
D)proximity to markets

Question 41

58)Which of the following is NOT a drawback associated with global supply chain design and location?

A)cultural issues
B)product quality and safety problems
C)transportation issues
D)lack of demand for product

Question 42

42)By performing a ______,we can find the location that has lowest total cost for a given volume range.

A)factor rating method
B)breakeven analysis
C)center-of-gravity method
D)GIS method

Question 43

59)Devaluation refers to ______.

A)reduction in the value of a currency
B)drop in market value for a company
C)reduction in the price of a product
D)loss of market share for a product

Question 44

52)Which of the following is NOT a decision that has to do with supply chains?

A)what and how much of a product to produce at each stage of the supply chain process
B)how much inventory is to be held at each stage
C)how and what type of information should be shared among supply chain partners
D)what price to be charged for products

Question 45

41)Which of the following is true with regard to factor rating method?

A)Rate the importance of each factor on a scale of 1 to 5 (with 1 being low and 5 being very highly important).
B)Identify the one factor that is common to all locations.
C)For each factor and each location,compute a score by summing the factor rating and the location rating.
D)The location with the highest subjective rating is chosen.

Question 46

51)The factor rating method has ______ steps.

A)five
B)seven
C)six
D)eight

Question 47

54)Which of the following is LEAST likely to influence location decisions?

A)environmental conditions
B)technological factors
C)production technologies
D)employment levels in economy

Question 48

55)Which of the following is NOT a political factor?

A)political stability of a country
B)the existence of well-established legal system
C)rules of commerce
D)humanitarian requirements

Question 49

43)The ______ is a quantitative technique used to determine the location of a single warehouse or distribution center in order to minimize its distribution costs.

A)breakeven analysis
B)factor rating method
C)center-of-gravity method
D)GIS method

Question 50

50)In Step 2 of breakeven analysis,plot the ______ on the vertical axis and the ______ on the horizontal axis.

A)fixed costs,variable costs
B)total costs,annual production volume
C)annual production volume,variable costs
D)variable costs,fixed costs

Question 51

49)Which of the following is NOT an analytical method managers use to evaluate locations?

A)factor rating method
B)breakeven analysis
C)center-of-gravity method
D)geometric analysis system

Question 52

45)The GIS method in location decisions stands for ______.

A)global information system
B)geometric information system
C)geographic information system
D)global information service

Question 53

60)Which of the following is considered to be an exchange rate risk?

A)devaluation
B)loss of market share
C)failure of supplier to deliver
D)obsolescence

Question 54

44)The center-of-gravity method assumes that distribution costs are a linear function of ______.

A)distance and quantity shipped
B)weight of a product and quantity shipped
C)distance and speed
D)quantity shipped and speed

Question 55

53)Which of the following is a supply chain decision that is not easy to change?

A)the decision about transportation
B)the decision about location
C)the decision about information sharing
D)the decision about inventory

Question 56

48)Mexico is poised to become the largest auto manufacturing location in the world,thanks to its ______.

A)infrastructure
B)political environment
C)liberal free trade policies
D)legal system

Question 57

56)Which of the following may NOT be considered a firm's competitive strategy?

A)lowering the firm's costs
B)growing the firm's business
C)avoiding quality inspections
D)accessing new sources of materials and resources

Question 58

46)______ result from choices that companies have to make between doing what is right and doing what is good for business.

A)Sustainability questions
B)Ethical dilemmas
C)Cultural issues
D)Legal issues

Question 59

47)Intangible costs include ______.

A)distribution costs
B)utilities cost
C)lack of customer responsiveness to the company's business
D)taxes

Question 60

57)Clustering occurs where ______.

A)there is a concentration of critical resources in a particular region
B)population is sparse
C)there are not many consumers
D)government requires production facilities to be located

Question 61

71)Which of the following is NOT a contributor to distribution costs?

A)the weight of a product
B)the quantity of it shipped
C)the distance the product must travel
D)the quality of the product shipped

Question 62

76)Which of the following is NOT a consequence faced by Detroit as a result of foreign competition and outsourcing?

A)a serious budget deficit
B)declining services
C)high levels of unemployment
D)alarming levels of industrial pollution

Question 63

61)Restrictions to prevent foreign producers from dumpling low-cost lumber and steel in the United States are considered to be ______.

A)government inspections
B)market risks
C)import restrictions
D)exchange rate risks

Question 64

79)Which of the following is NOT a factor that influences the choice of a global location?

A)political risk
B)governmental regulations
C)ISO requirements
D)free trade zones

Question 65

62)Which of the following is an industry where violations of intellectual property rights are still prevalent in China?

A)electronics industry
B)food-retailing industry
C)book-publishing industry
D)furniture-making industry

Question 66

78)Which of the following is NOT a factor that influences the choice of a global location?

A)host country market size
B)total cost
C)infrastructure
D)lead time

Question 67

80)Which of the following is NOT an industry that would need to relocate due to depleted raw materials or natural resources?

A)mining
B)fishing
C)logging
D)bicycle manufacturing

Question 68

64)Which of the following is NOT a critical success factor in locating facilities in the service sector?

A)proximity of competitors
B)convenient access for customers
C)traffic volumes and patterns
D)frequency of government inspections

Question 69

68)Which of the following is a model used to evaluate a location?

A)Pareto analysis
B)center-of-gravity method
C)clustering technique
D)cause-and-effect diagram

Question 70

67)Which of the following is NOT a critical success factor associated with the decision to locate on a particular site?

A)size of site
B)proximity to raw materials
C)construction and land costs
D)zoning and environmental restrictions

Question 71

74)Which of the following is NOT a relevant question for a firm in terms of sustainability?

A)Does the facility have access to fossil fuels?
B)Does the facility have access to recycling opportunities for the company's waste?
C)Does the facility meet all applicable environmental laws and regulations?
D)Is the facility cost effective,given that the location is sustainable?

Question 72

72)Which of the following is true of the center-of-gravity method used to evaluate a location?

A)It is a qualitative technique.
B)It assumes that distribution costs are a linear function of only the distance and the quantity shipped.
C)It makes use of satellite and geographic positioning systems.
D)It ignores distribution costs.

Question 73

73)Which of the following is NOT a relevant question for a firm in terms of sustainability?

A)Is the facility in the right location for protecting natural resources?
B)Does the facility have an efficient transportation infrastructure that can help minimize transportation activities in order to reduce carbon emissions?
C)Does the facility have access to renewable energy sources,such as wind and solar energy?
D)Is the product priced appropriately for its target market?

Question 74

75)Which of the following is a consequence of NAFTA?

A)Hundreds of thousands of American jobs were lost.
B)U.S.manufacturers who had their manufacturing plants in Mexico moved them back to the United States.
C)Prices of many products manufactured in Canada fell significantly.
D)Mexican companies lost market share to European manufacturers.

Question 75

63)Which of the following is NOT a step in the supply chain design and location decision-making process?

A)Design the supply chain.
B)Determine the configuration of regional facilities.
C)Identify the market for its products.
D)Select potential sites for locating facilities.

Question 76

65)Which of the following is NOT a critical success factor associated with the decision to locate in a particular country?

A)markets and customer proximity
B)proximity to suppliers and resources
C)competitors' locations
D)customer safety

Question 77

69)When we use breakeven analysis to find a location for a manufacturing facility,we take into account ______.

A)revenues
B)profits
C)costs
D)production quality

Question 78

70)Which of the following is true with regard to fixed costs and variable costs?

A)Fixed costs are those costs that remain constant regardless of the volume produced.
B)Variable costs are those costs that remain constant irrespective of the output level.
C)Variable costs are those costs that remain constant regardless of the time of manufacture.
D)Variable costs are those costs that remain constant regardless of the price of the product.

Question 79

77)Which of the following is NOT a consequence faced by companies that relocate their facilities?

A)relocation costs
B)bad publicity
C)drop in market share
D)loss of goodwill from consumers

Question 80

66)Which of the following is NOT a critical success factor associated with the decision to locate in a particular region?

A)proximity to markets
B)proximity to raw materials
C)space to expand
D)availability and cost of utilities