49) Which of the following is a sourcing strategy in the global context?
A) use only local purchasing agents
B) establish local purchasing offices
C) purchase only from global suppliers
D) assign domestic buyers for international purchasing
50) Jeff manages global purchasing for his employer and needs to select a new supplier. Jeff should
most likely ________.
A) implement e-commerce
B) focus mainly on purchase price
C) establish clear performance expectations
D) maintain the same type of relationship with every supplier
51) At Fidelity Enterprises, raw materials, parts, and components are acquired from suppliers as they are
needed in the manufacturing process so that Fidelity does not have to store large inventories. Which of
the following does Fidelity most likely use?
A) just-in-time (JIT)
B) total quality management (TQM)
C) six Sigma
D) acceptable quality level (AQL)
52) Gibson Enterprises is an MNE that relies on just-in-time inventory management and lean
manufacturing systems to optimize quality and efficiency. For the last few years, Gibson has used the
same foreign sources for its raw materials. What is the most likely risk faced by Gibson because of
foreign sourcing?
A) quality of incoming inventory
B) uncertainty of arriving parts
C) few available suppliers
D) high inventory costs
53) A kanban system is best described as a system that ________.
A) uses special locations for storing imported inventory to avoid paying duties
B) seeks to improve quality by setting a rigorous goal of zero defects
C) electronically links together suppliers, customers, and intermediaries
D) facilitates JIT by using cards to control the flow of production through a factory
54) ________ are special locations for storing domestic and imported inventory in order to avoid paying
duties until the inventory is sold.
A) Foreign trade zones (FTZs)
B) Ports of entry
C) Duty-free zones
D) Customs areas
55) Which of the following is one of the main purposes of FTZs?
A) discouraging companies to locate in the host country
B) forcing countries to pay extra duties
C) discouraging companies from using JIT
D) allowing countries to defer duties
56) Foreign trade zones (FTZs) can be divided into ________ and ________.
A) domestic zones; global zones
B) import zones; export zones
C) general-purpose zones; subzones
D) foreign-goods zones; domestic-materials zones
57) ________ is a particularly important consideration in the establishment of a transportation network.
A) Warehouse configuration
B) ISO 9000
C) Rationalization
D) The kanban system
58) Which of the following is a current trend with regards to transportation networks?
A) increased simplicity of transporting goods internationally
B) decreased use of third-party intermediaries to store and transport goods
C) increased use of third-party intermediaries to store and transport goods
D) decreased risks of managing longer global supply chains
59) All of the following are benefits of using free trade zones EXCEPT ________.
A) streamlined customs procedures
B) reduced or eliminated duties
C) deferred or eliminated taxes
D) improved quality of goods
60) In a global supply chain, suppliers must be part of the manufacturer’s organizational structure.
61) Inbound logistics is also known as materials management.
62) The success of a global manufacturing strategy depends on compatibility, configuration,
coordination, and control.
63) Configuration is the linking or integrating of activities into a unified system.
64) Cost-minimization strategies force MNEs to establish economies of scale in manufacturing.
65) Innovation is the ability of the production process to make different kinds of products and to adjust
the volume of output.
66) Offshore manufacturing is attractive because it offers high labor costs, cheap materials and
components, and proximity to markets.
67) When firms estimate the costs of outsourcing to low-wage countries, they often overlook elements
such as shipping distances.
68) Centralized manufacturing is most widely used when customers have widely varying localized
needs.
69) Rationalization is the process of specializing in manufacturing according to product or process.
70) A comprehensive supply chain strategy should include good inventory management.
71) EDI is software that can link information flows from different parts of a business and from different
geographic areas.
72) Electronic data interchange (EDI) is an online collaboration model that brings manufacturers,
distributors, value-added retailers, and customers together to execute trading transactions.
73) Independent suppliers can connect to a company’s intranet to help automate and organize delivery of
components to that company.
74) The Malcolm Baldrige National Quality Award is an example of a general standard that is presented
annually to companies that demonstrate quality strategies and achievements.
75) The three levels of quality standards are general, international, and industry-specific.
76) Most U.S. companies have moved from a total quality management (TQM) approach to an
acceptable quality level (AQL) approach.
77) Six Sigma is a highly focused system of quality control that scrutinizes a company’s entire
production system.
78) Sourcing in the home country enables a company to avoid numerous problems associated with
global sourcing.
79) A company would most likely outsource abroad in order to gain access to more domestic products.
80) Keiretsu is one of the two major configurations of sourcing.
81) Vertical integration occurs when the company owns the entire supplier network or at least a
significant part of it.
82) The make-or-buy decision applies only to domestic firms.
83) A company may use outsourcing as an implied threat to underperforming employees.
84) The use of JIT does not depend on the quality of incoming parts or the time of their arrival.
85) JIT is the process of sourcing raw materials and parts just as they are needed in the manufacturing
process.
86) Foreign trade zones (FTZs) can be either general-purpose zones or subzones.
87) Duty-free zones are special locations for storing domestic and imported inventory in order to avoid
paying duties until the inventory is sold.
88) Fewer and fewer companies are using third-party intermediaries to store and transport goods.
89) Warehouse configuration is a particularly important consideration in the establishment of a
transportation network.
90) What is a supply chain? How does a supply chain differ from materials management and logistics?
91) What are the roles of compatibility, configuration, coordination, and control in a global
manufacturing strategy? Describe each of these four factors.
92) How has technology altered supply chain management? Discuss some of the available tools.
93) Describe total quality management.
94) What are the advantages and disadvantages of global and domestic sourcing? What role does quality
play in deciding between global and domestic sourcing?
95) What is a just-in-time inventory system? What are the implications of JIT for firms that use global
sourcing?
96) What are foreign trade zones? How are they used?
97) What factors complicate the international transportation of goods? How can a firm make the process
more efficient?
98) What has been the influence of Japan on supply chain management? In your answer, discuss the
concepts of industrial clustering and quality.
99) Why are the concepts of dependability and quality important when developing a global
manufacturing strategy?