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International Business, 12e (Hill)
1) Production is also sometimes referred to as operations as part of a global supply chain.
2) Logistics includes the buying of raw materials and component parts.
3) The upstream portion of the global supply chain includes all of the organizations and resources
in the supply chain.
2
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written consent of McGraw-Hill Education.
4) Six Sigma is a qualitative alternative to total quality management that focuses primarily on
managing human resources to improve profitability.
5) Other things being equal, a firm should locate its various manufacturing activities where the
relative factor costs are conducive to the performance of those activities.
6) The argument for centralizing production will be greater if the minimum efficient scale of a
plant relative to total global demand is low.
7) Mass customization facilitates product customization at low costs.
8) Flexible manufacturing technologies enable companies to customize products to the demands of
small consumer groups.
9) Products such as electronic components and pharmaceuticals have low value-to-weight ratios.
10) Organizations are under pressure to produce products in the optimal location and to serve the
world market from there if their products have low value-to-weight ratios.
11) Modern consumer products such as personal computers serve universal needs.
12) Poor product quality and low productivity are hidden costs associated with basing production
in a foreign location.
13) Concentration of production should be avoided when important exchange rates are expected to
remain relatively stable.
14) Decentralization of production is appropriate when the product does not serve universal needs.
15) Managers in a source factory operate in essentially the same way that managers in an offshore
factory operate. They have very little say in purchasing or logistics decisions.
16) Global learning refers to the idea that valuable knowledge does not reside just in a firm's
domestic operations.
17) Make-or-buy decisions are decisions that concern the components to be used in a production
process.
18) Firms would prefer buying component parts, or an entire product, from independent suppliers
to protect proprietary product technologies.
19) The firm that sources from independent suppliers has less inventory to manage.
20) Buying a product from external vendors is highly appropriate when a firm intends to protect
proprietary technology.
21) The term distribution center is rarely used today in a global context.
22) In the context of a tube of toothpaste, the box in which the toothpaste is shipped to the store
from the warehouse is the primary packaging.
23) In global purchasing, Level I involves domestic purchasing activities only.
24) Just-in-time systems are used to economize on inventory holding costs by having materials
arrive at a manufacturing plant just in time to enter the production process and not before.
25) Just-in-time systems reduce product quality although it brings about huge cost savings.
26) One way to reduce risks associated with a JIT global supply chain is to source inputs from
several suppliers located in different countries.
27) Logistics is the activity that controls the
A) effective flows of physical materials through the value chain.
B) customer contact points of a business.
C) activities involved in creating a product.
D) information flows between a business and its customers.
28) The Six Sigma methodology
A) is used to compare and benchmark the performances of competing firms.
B) gives more importance to productivity than product quality.
C) is a direct descendant of the total quality management philosophy.
D) says that at six sigmas, there would be only 3.4 defects per million units.
29) Deming argued that to keep pace with changes in the workplace
A) work standards should be defined only as quotas and numbers.
B) supervision is not essential for quality improvements.
C) management should train employees in new skills.
D) products should be certified with standards such as ISO 9000.
