Question 1

Posh Pools Inc. was ready to sign an agreement to build a new facility in a foreign nation when it learned that the local currency in that nation had appreciated significantly in the past week. How might this affect the company's decision to build the new facility?

Accepted Answer

A)   The company will want to make more foreign direct investment in that country.
B)   There will be a decrease in the dollar cost of products exported from that nation which benefits Posh Pools.
C)   This will diminish the attractiveness of this country as a manufacturing base for Posh Pools.
D)   This will transform the country into a low-cost location and make it more desirable for manufacturing.
E)   This will decrease the amount of imports brought into the country and make it more attractive for manufacturing.F) None of the above
G) A) and E)

Question 2

Sweet Stuff Sugar Source ships product all over the world. Since the product it ships has a low value-to-weight ratio, transportation costs are

Accepted Answer

A)   taxed by both the importer and exporter.
B)   a large percentage of the total cost.
C)   absorbed by the importer.
D)   not factored into the total cost.
E)   a small percentage of the total cost.F) B) and D)
G) D) and E)

Question 3

Since refined sugar has a low value-to-weight ratio, even if it is shipped halfway around the world, the transportation costs would account for a very small percentage of total costs.

Accepted Answer

A) True 
 B)False

Question 4

Describe the members of the upstream and the downstream portions of the global supply chain.

Accepted Answer

The upstream supply chain includes all o...

Question 5

A business that supplies parts to a manufacturer would be part of the downstream supply chain.

Accepted Answer

A) True 
 B)False

Question 6

Describe the five strategic levels that can be undertaken by a global company.

Accepted Answer

Level I is simply companies engaging in ...

Question 7

Compare and contrast the six different types of strategic roles associated with a foreign factory.

Accepted Answer

Foreign factories can have one of a numb...

Question 8

What is the role of information technology and the Internet in modern materials management?

Accepted Answer

Web- and cloud-based information systems...

Question 9

The relationship between the number of "sigmas" and the number of errors in the Six Sigma approach is best described as

Accepted Answer

A)   the higher the number of "sigmas," the greater the number of errors.
B)   if the number of "sigmas" is a positive value, then the number of errors is always a negative value.
C)   the higher the number of "sigmas," the smaller the number of errors.
D)   the number of "sigmas" is independent of the number of errors.
E)   if the number of "sigmas" is a negative value, then the number of errors is always positive.F) B) and C)
G) A) and E)

Question 10

Supply chain management involves the coordination of the logistics, purchasing, operations, and market channel activities of a company.

Accepted Answer

A) True 
 B)False

Question 11

The cost to manufacture one unit of Killian Audio Products' best-selling hearing aid, the Zone, is $67.50. The CFO of the company determines that if the company expands the output of its biggest U.S. plant by 20 percent, the unit cost would be only $42.50. This analysis is based on the concept of

Accepted Answer

A)   minimum efficient scale.
B)   lean production.
C)   Six Sigma.
D)   economies of scale.
E)   total quality management.F) B) and C)
G) C) and D)

Question 12

If a firm possesses proprietary product technology, the best option for that firm would be to

Accepted Answer

A)   manufacture the product in-house so that it does not lose its competitive advantage.
B)   outsource the production activities to independent suppliers in order to realize economies of scale.
C)   merge with competitors to reduce investments on technology.
D)   share the technology to make the industry more competitive.
E)   transfer the technology to less developed countries.F) None of the above
G) A) and E)

Question 13

Kyle accepted a job at Brenton Manufacturing. During his training, he was told that defective and poor-quality products were unacceptable, and the goal is to manufacture goods that met 100 percent of standards. What methodology does this company use?

Accepted Answer

A)   TQM
B)   lean manufacturing
C)   JIT
D)   ISO 9000
E)   mass customizationF) None of the above
G) A) and E)

Question 14

When determining the location decision for industrial products like steel, what should a company keep in mind?

Accepted Answer

A)   They serve needs that are the same all over the world.
B)   They have drastic national differences in consumer taste and preference.
C)   The need for local responsiveness for these products is more than consumer products.
D)   It makes sense to produce these products in multiple locations close to major markets.
E)   A plant must operate at the highest minimum efficient scale of output for these products.F) D) and E)
G) B) and D)

Question 15

When considering foreign direct investment in a country, what is one situation that will benefit a company?

Accepted Answer

A)   presence of supporting industries
B)   market with many other foreign competitors
C)   lack of intellectual property rights laws
D)   presence of a communist political system
E)   appreciation of local currencyF) A) and B)
G) All of the above

Question 16

A second strategic objective shared by production and supply chain management is to increase product quality. In this context, quality means

Accepted Answer

A)   affordability.
B)   flexibility.
C)   reliability.
D)   adaptability.
E)   patentability.F) B) and D)
G) A) and B)

Question 17

As the global market for eyeglass products has become extremely competitive in recent months, U-See Products' newly appointed CFO believes the company should address its minimum efficient scale and attempt to lower it. What is a consequence of a low minimum efficient scale?

Accepted Answer

A)   prevents a firm from utilizing capital equipment fully
B)   leads to centralized production in a single location or a limited number of locations
C)   prevents a firm from accommodating demands for local responsiveness
D)   increases the unit cost of products
E)   allows a firm to hedge against currency risk by manufacturing the same product in several locationsF) B) and E)
G) B) and C)

Question 18

The drawback of a just-in-time inventory system is that it

Accepted Answer

A)   increases the total capital required by a firm.
B)   leaves a firm without a buffer stock of inventory.
C)   increases inventory holding costs, such as warehousing and storage costs.
D)   is less efficient than traditional system in spotting and fixing defective inputs.
E)   lowers a company's profitability as measured by return on capital invested.F) None of the above
G) C) and D)

Question 19

As the inventory control manager for a group of retail stores, Henry calls the DoubleBlue Jeans warehouse when he needs to restock this product because the manufacturer stores all of its products there. Another name for this warehouse would be a(n)

Accepted Answer

A)   wholesaler.
B)   offshoring site.
C)   acquisition.
D)   distribution center.
E)   franchisee.F) D) and E)
G) C) and E)

Question 20

A "make" decision is favored when there is a chance that supply cannot be guaranteed if the firm moves production overseas.

Accepted Answer

A) True 
 B)False

Exam 15: Global Production and Supply Chain Management

Compare and contrast the six different types of strategic roles associated with a foreign factory.

Correct AnswerverifiedForeign factories can have one of a numb...View AnswerShow Answer

If a firm possesses proprietary product technology, the best option for that firm would be to

Correct AnswerverifiedShow Answer

When considering foreign direct investment in a country, what is one situation that will benefit a company?

Correct AnswerverifiedShow Answer

Describe the five strategic levels that can be undertaken by a global company.

Correct AnswerverifiedLevel I is simply companies engaging in ...View AnswerShow Answer

A second strategic objective shared by production and supply chain management is to increase product quality. In this context, quality means

Correct AnswerverifiedShow Answer

Posh Pools Inc. was ready to sign an agreement to build a new facility in a foreign nation when it learned that the local currency in that nation had appreciated significantly in the past week. How might this affect the company's decision to build the new facility?

Correct AnswerverifiedShow Answer

Sweet Stuff Sugar Source ships product all over the world. Since the product it ships has a low value-to-weight ratio, transportation costs are

Correct AnswerverifiedShow Answer

When determining the location decision for industrial products like steel, what should a company keep in mind?

Correct AnswerverifiedShow Answer

What is the role of information technology and the Internet in modern materials management?

Correct AnswerverifiedWeb- and cloud-based information systems...View AnswerShow Answer

A "make" decision is favored when there is a chance that supply cannot be guaranteed if the firm moves production overseas.

Correct AnswerverifiedShow Answer

Describe the members of the upstream and the downstream portions of the global supply chain.

Correct AnswerverifiedThe upstream supply chain includes all o...View AnswerShow Answer

A business that supplies parts to a manufacturer would be part of the downstream supply chain.

Correct AnswerverifiedShow Answer

The drawback of a just-in-time inventory system is that it

Correct AnswerverifiedShow Answer

As the inventory control manager for a group of retail stores, Henry calls the DoubleBlue Jeans warehouse when he needs to restock this product because the manufacturer stores all of its products there. Another name for this warehouse would be a(n)

Correct AnswerverifiedShow Answer

Kyle accepted a job at Brenton Manufacturing. During his training, he was told that defective and poor-quality products were unacceptable, and the goal is to manufacture goods that met 100 percent of standards. What methodology does this company use?

Correct AnswerverifiedShow Answer

Supply chain management involves the coordination of the logistics, purchasing, operations, and market channel activities of a company.

Correct AnswerverifiedShow Answer

As the global market for eyeglass products has become extremely competitive in recent months, U-See Products' newly appointed CFO believes the company should address its minimum efficient scale and attempt to lower it. What is a consequence of a low minimum efficient scale?

Correct AnswerverifiedShow Answer

The relationship between the number of "sigmas" and the number of errors in the Six Sigma approach is best described as

Correct AnswerverifiedShow Answer

The cost to manufacture one unit of Killian Audio Products' best-selling hearing aid, the Zone, is $67.50. The CFO of the company determines that if the company expands the output of its biggest U.S. plant by 20 percent, the unit cost would be only $42.50. This analysis is based on the concept of

Correct AnswerverifiedShow Answer

Since refined sugar has a low value-to-weight ratio, even if it is shipped halfway around the world, the transportation costs would account for a very small percentage of total costs.

Correct AnswerverifiedShow Answer

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Foreign factories can have one of a numb...
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Level I is simply companies engaging in ...
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Web- and cloud-based information systems...
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The upstream supply chain includes all o...
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Correct Answer
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