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30) Before a firm is allowed access to the European marketplace, the European Union requires that
the quality of the firm's manufacturing processes and products be certified under a quality standard
known as
A) Six Sigma.
B) ISO 9000.
C) Kaizen.
D) total quality management.
31) At six sigmas, a production process would be highly accurate and create just
A) 3.4 defects per hundred thousand units.
B) 6.8 defects per million units.
C) 3.4 defects per million units.
D) 6.8 defects per hundred thousand units.
32) Which of the following statements is true of Six Sigma?
A) It is a statistically based philosophy to reduce defects and boost productivity.
B) At six sigmas, a production process will have 6.6 defects per million units.
C) At six sigmas, a production process would be 100 percent accurate.
D) A company can achieve Six Sigma perfection by reducing the number of defects to one in
6,000.
33) Which of the following statements is true of the country factors that govern international
business?
A) Relative factor costs should be considered when selecting a country for production.
B) Centralized production is the most suitable method of doing international business.
C) Exchange rates are not a significant factor that determines the selection of a country.
D) Decentralized manufacturing is the most suitable method of doing international business.
34) Which of the following is a factor that transforms a low-cost location to a high-cost location?
A) appreciation of local currency
B) use of fixed exchange rates
C) use of pegged exchange rates
D) implementation of free trade regime
35) Which of the following is a characteristic of manufacturing technology that can be pivotal in
deciding where to locate an international business?
A) exchange rates that govern the business
B) relative factors cost in the locality
C) availability of a skilled labor pool
D) fixed costs of setting up a production plant
36) Which of the following makes being dependent on one location particularly risky?
A) governmental intervention in exchange rates
B) floating exchange rates
C) fixed exchange rates
D) preferential treatment of domestic industries
37) According to the concept of economies of scale, as plant output expands
A) productivity declines.
B) total costs decrease.
C) unit costs decrease.
D) utilization of capital declines.
38) Identify an advantage of adopting a low minimum efficient scale.
A) It helps companies reduce the level of initial capital required for business.
B) It allows the firm to accommodate demands for local responsiveness.
C) It allows firms to discount political risks and other global capital risks.
D) A minimum efficient scale of a plant allows decentralization of production.
39) Central to the concept of economies of scale is the idea that the best way to achieve high
efficiency, and hence low unit costs, is through the
A) customization of products for each individual market.
B) mass production of a standardized output.
C) production of goods that vary from one another.
D) production of small volumes of high-quality products.
40) Flexible manufacturing technology is also known as
A) Six Sigma production.
B) line production.
C) standardization.
D) lean production.
41) Which of the following is a desired outcome of flexible manufacturing technology?
A) minimizing the utilization of individual machines
B) reducing setup times for complex equipment
C) standardizing the output of a system
D) implementing specialized equipment in production
42) ________ allows the company 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) Standardization
B) Kaizen
C) Six Sigma
D) Lean production
43) The term ________ has been coined to describe the ability of companies to use flexible
manufacturing technology to reconcile the goals of low cost and product personalization.
A) assembly-line production
B) product standardization
C) mass customization
D) Six Sigma production
44) ________ is a grouping of various types of machinery, a common materials handler, and a
centralized cell controller.
A) A flexible machine cell
B) A Six Sigma
C) An assembly line
D) A minimum efficient scale
45) Which of the following statements is true of products with high value-to-weight ratios?
A) Transportation costs usually account for a large percentage of their total costs.
B) They are relatively inexpensive and weigh a lot.
C) They are usually produced in multiple locations close to major markets.
D) Their transportation accounts for a very small percentage of the total costs.
46) Which of the following products will most likely have high value-to-weight ratios?
A) pharmaceuticals
B) refined sugar
C) bulk chemicals
D) petroleum products
47) When a company's product has a low value-to-weight ratio, the company should
A) acquire a shipping company and manufacture nearby.
B) manufacture products from a centralized location.
C) ignore transportation costs as they would only be a minor part.
D) produce the product in multiple locations close to major markets.
48) Which of the following products will have low value-to-weight ratios?
A) pharmaceuticals
B) refined sugar
C) microprocessor
D) electronic items
49) Concentration of production is appropriate when
A) the product serves universal needs.
B) the product does not serve universal needs.
C) the product's value-to-weight ratio is low.
D) volatility in important exchange rates is expected.
