Global Business Exam Help Sheet Part 2, International Business Help Sheet

Rinker Audio Products wants to adopt the total quality management (TQM) philosophy as developed by, among others, W. Edwards Deming. The company employees are, however, confused as to what TQM entails. As a consultant, you are helping Rinker's employees understand TQM as it would impact them. Which of the following is true of W. Edward Deming's beliefs about the total quality management philosophy? A. Quality of supervision should be improved by allowing more time for supervisors to work with employees. B. Management should embrace the philosophy that mistakes are often acceptable. C. Work standards should be defined only as numbers or quotas. D. Achieving better quality requires commitment more at the top management than at any other level. E. Management should create an environment in which employees will follow recommendations rather than recommend changes.

A. Quality of supervision should be improved by allowing more time for supervisors to work with employees

Rinker Audio Products has had recurring problems in its product quality. The company's manufacturing vice president suggests that Rinker use a statistically based methodology that aims to reduce defects, boost productivity, eliminate waste, and cut costs throughout the company and whose ultimate goal would be to have just 3.4 defects per million units that Rinker produces. What is the methodology that the manufacturing vice president is considering? A. Six Sigma B. lean manufacturing C. just-in-time inventory D. ISO 9000 E. mass customization

A. Six Sigma

Which of the following statements is true of industrial products such as steel? 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.

A. They serve needs that are the same all over the world

The total quality management philosophy was developed by a number of American consultants. Which of the following individuals is one of them? A. W. Edward Deming B. Philip Kotler C. Michael Porter D. Henry Ford E. Valerie Zeithaml

A. W. Edward Deming

Rinker Audio Products is uncertain whether or not to introduce a just-in-time (JIT) inventory system. While the head of manufacturing is opposed to it, its CFO is pushing for its adoption. The basic philosophy behind just-in-time (JIT) inventory systems is to A. economize on inventory holding costs. B. reduce inventory turnover. C. create a buffer stock of inventory. D. reduce costs by reducing quality. E. increase the total working capital requirement.

A. economize on inventory holding costs

Which of the following allows suppliers, shippers, and the purchasing firm to communicate with each other via the Internet with no time delay? A. electronic data interchange system B. data warehousing system C. batch processing system D. skills inventory system E. just-in-time inventory system

A. electronic data interchange system

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

A. manufacture the product in-house so that it does not lose its competitive advantage

Rinker Audio Products is looking to enter Europe. Toward this, the company is studying various European countries to see which ones to invest in. Which of the following location externalities is favorable for Rinker's foreign direct investment in a country? 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 currency

A. presence of supporting industries

Two product features impact location decisions. Which of the two reduces the need for local responsiveness? A. product's ability to serve universal needs B. product's life cycle C. product's packaging D. product's flexible manufacturing technology E. product's value-to-weight ratio

A. product's ability to serve universal needs

Which of the following is a philosophy that was widely adopted, first by Japanese companies and then American companies during the 1980s and early 1990s and from which the Six Sigma methodology directly descended? A. total quality management B. enterprise resource planning C. business process reengineering D. just-in-time E. business process outsourcing

A. total quality management

Concentration of production makes most sense when A. trade barriers are low. B. the product's value-to-weight ratio is low. C. important exchange rates are volatile. D. flexible manufacturing technology does not exist. E. the production technology has low fixed costs.

A. trade barriers are low

A product's value-to-weight ratio affects location decisions primarily because of its influence on A. transportation costs. B. shelf life. C. work-in-progress inventory. D. inventory turnover. E. capacity utilization.

A. transportation costs

Uvicon Inc. and Bionor Inc. are firms that compete against each other in the global market. Uvicon has a high level of fixed costs and high minimum efficient scale, whereas Bionor has a low level of fixed costs and low minimum efficient scale. In this scenario, which of the following is true? A. Uvicon will be better prepared to hedge against potential adverse moves in currencies than Bionor. B. Uvicon will benefit from centralizing its production activities and Bionor from decentralizing. C. Uvicon will have more bargaining power over contract manufacturers than Bionor. D. Uvicon will be better enabled to adapt to changes in consumer demand in regional markets than Bionor. E. Uvicon will be better prepared to accommodate demands for local responsiveness than Bionor.

B. Uvicon will benefit from centralizing its production activities and Bionor from decentralizing

Under a more traditional system as opposed to a just-in-time inventory system, warehousing parts for weeks before they are used will A. reduce the total working capital required by a firm. B. allow many defective parts to be produced before a problem is recognized. C. result in a near error-free production process. D. reduce the costs related to inventory holding. E. reduce the need to write off excess unsold inventory against earnings.

B. allow many defective parts to be produced before a problem in recognized

Rinker Audio Products wants to enter the European market but realizes that European consumer tastes are not uniform across countries. To be able to accommodate demands for local responsiveness, Rinker should A. ignore national differences in consumer tastes and preferences. B. decentralize production activities to the major national or regional markets. C. ensure that the manufacturing processes in all units are identical. D. standardize the product coming out of all manufacturing units. E. refrain from hiring host country managers.

B. decentralize production activities to the major national or regional markets

The effect of improved quality control is to lower the costs of value creation by reducing production costs and A. decreasing inventory turnover. B. decreasing after-sales service costs. C. increasing scrap costs. D. increasing warranty costs. E. increasing time spent on fixing defects.

B. decreasing after-sales service costs

Producing a standardized product in large volumes will A. result in diseconomies of scale. B. increase production efficiency. C. increase production costs. D. result in shorter production runs. E. result in a high minimum efficient scale of output.

B. increase production efficiency

Adopting flexible manufacturing technology to produce a wide variety of end products results in A. increased setup times for complex equipment. B. increased utilization of individual machines. C. reduced quality control. D. increased unit cost of products. E. lesser need for scheduling.

B. increased utilization of individual machines

Under a just-in-time (JIT) inventory system, it is likely that the _____ will increase. A. amount of working capital for inventory B. inventory turnover C. number of defective parts D. inventory holding costs E. storage costs

B. inventory turnover

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

B. leaves a firm without a buffer stock of inventory

Uniway Technologies Inc. has based its manufacturing units in the country of Lanthania. The country's stable economic and political environment has helped the firm gain competitive advantage by lowering its production costs and improving product quality. Other things being equal, the benefits realized from such a strategy can be typically referred to as A. economies of scope. B. location economies. C. diseconomies of scale. D. economies of power. E. learning economies.

B. location economies

Champion Works Inc. is an animation company, headquartered in the United States. The CEO of the company has decided to outsource some of the production to companies in developing countries, as the firm seems to be losing out on its competitive advantage. This decision to shift functions or processes to less developed countries is most likely due to their A. strong intellectual property rights laws. B. lower labor costs. C. accessibility to better technology. D. sophisticated infrastructure. E. currency appreciation.

B. lower labor costs

Which of the following is an objective of logistics? A. increase the cost of value creation B. manage a firm's global supply chain at a low cost C. reduce inventory turnover D. reduce a firm's customer responsiveness E. increase inventory holding costs

B. manage a firm's global supply chain at a low cost

Which of the following products is best manufactured in multiple locations close to major markets to reduce transportation costs? A. pharmaceuticals B. petroleum products C. books D. magazines E. electronics

B. petroleum products

Which of the following is an objective of lean production? A. reducing the quality of a product to keep unit costs low B. reducing setup times for complex equipment C. replacing product variety with standardized output D. decreasing utilization of individual machines through scheduling E. increasing the level of minimum efficient scale of output

B. reducing setup times for complex equipment

Which of the following is the process of planning, implementing, and controlling the efficient, cost-effective flow of raw materials, in-process inventory, finished goods, and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal? A. just-in-time inventory system B. reverse logistics C. upstream system D. downstream system E. total Quality Management (TQM)

B. reverse logistics

Technological factors are making it feasible for firms to concentrate manufacturing facilities at optimal locations. The major brakes on this trend are A. differences in endowment factors. B. transportation costs and trade barriers. C. rising national differences in consumer tastes and preferences. D. growing free trade areas and democracy. E. declining fluctuations in exchange rates.

B. transportation costs and trade barriers

Which of the following is a consequence of using flexible machine cells? A. It fails to adapt to the production of different products. B. It generally results in stockpiles of partly finished products. C. It improves capacity utilization and reduces wastes. D. It increases setup time for complex equipment. E. It adds to the cost structure of a firm.

C. It improves capacity utilization and reduces wastes

Which of the following is true of a product that serves universal needs? A. It becomes necessary to customize the product to suit small consumer groups. B. It becomes necessary to accommodate demands for local responsiveness. C. It increases the attractiveness of concentrating production at an optimal location. D. It is difficult to serve national differences in consumer taste and preference. E. It is always attractive to globally disperse production to all major markets.

C. It increases the attractiveness of concentrating produciton at an optimal location

Rinker Audio Products has a fully-staffed purchasing department that procures various inputs. It also has various domestic manufacturing facilities that coordinate with the purchasing department. Rinker's distribution function coordinates the shipment of finished products. Taken together, Rinker Audio Products' purchasing, manufacturing, and distribution functions constitute the company's A. promotion. B. recruitment. C. logistics. D. benchmarking. E. inshoring.

C. Logistics

_____ is a hidden cost to basing production in a foreign location. A. Low employee turnover B. Low labor costs C. Poor product quality D. Expensive higher education system E. Low inventory turnover

C. Poor product quality

Which of the following firms should spread its production over decentralized locations? A. Univion Inc. operates in an industry where national differences in political economy and culture have a substantial impact on its cost of production. B. Saturn Inc. operates in an industry where volatile fluctuations in important exchange rates are expected. C. Brew Technology manufactures industrial machines and equipment that serve universal needs. D. Gold Dreams Inc. customizes jewelry in precious metal and stones with the aid of flexible manufacturing technologies. E. Uniton Inc. uses a production technology that has high fixed costs and high minimum efficient scale.

C. Saturn Inc. operates in an industry where volatile fluctuations in important exchange rates are expected

_____ is a statistically based philosophy that aims to reduce defects, boost productivity, eliminate waste, and cut costs throughout a company. A. ISO 9000 B. Just-in-time C. Six Sigma D. Lean production E. Upstreaming

C. Six Sigma

Which of the following best describes the relationship between the number of "sigmas" and the number of errors? 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.

C. The higher the number of "sigmas", the smaller the number of errors

_____ has caused proprietary software solutions to implement electronic data interchange systems become obsolete. A. A just-in-time inventory system B. Flexible machine technology C. The Internet D. Dynamic capabilities E. Social Networking

C. The internet

When a company achieves mass customization via flexible manufacturing technologies, it increases the company's A. cost structure. B. waste. C. customer responsiveness. D. learning effects. E. externalities.

C. customer responsiveness

Rinker Audio Products has wide product variety in its product line. A firm with a wide product variety will find it A. difficult to achieve shorter product runs. B. difficult to increase its product sales. C. difficult to reduce its unit costs. D. easy to realize economies of scale. E. easy to reach optimum production efficiency.

C. difficult to reduce its unit costs

In studying various European countries to identify the one where Rinker Audio Products can manufacture and use as the base for a pan-Europe launch, the company found out that the country of Marunia changed its foreign exchange rate that resulted in a significant appreciation of the Marun, its local currency. Which of the following is a consequence of Marunia's change in exchange rate that results in appreciation of the local currency? A. more foreign direct investment into Marunia B. decrease in the dollar cost of products exported from Marunia C. diminishing of Marunia's attractiveness as a manufacturing base D. transformation of Marunia into a low-cost location E. decrease in the amount of imports brought into Marunia

C. diminishing of Marunia's attractiveness as a manufacturing base

Rinker Audio Products stores its finished goods in various warehouses around the United States and in international locations. The company's sales function coordinates with 47 wholesalers who, in turn, ensure that Rinker's products are available in 750 retail outlets worldwide. When taken together, what portion of Rinker's global supply chain do its distributors and retailers constitute? A. upstream B. horizontal C. downstream D. inward-facing E. process

C. downstream

An important objective shared by both production and logistics functions of an international firm is to A. increase profits by lowering quality. B. increase foreign competition. C. lower costs by dispersing production activities. D. decrease inventory turnover. E. stock excess inventory on hand.

C. lower costs by dispersing production activities

Which of the following terms refers to the production of a variety of end products at a unit cost that could once be achieved only through bulk production of a standardized output? A. lean production B. just-in-time inventory C. mass customization D. specialized asset E. dynamic capability

C. mass customization

The level of output at which most plant-level scale economies are exhausted is known as A. mass customization. B. break-even point. C. minimum efficient scale. D. just-in-time. E. lean production.

C. minimum efficient scale

A second strategic objective shared by production and supply chain management is to increase product quality. In this context, quality means A. affordability. B. flexibility. C. reliability. D. adaptability. E. patentability.

C. reliability

A major cost saving from just-in-time inventory systems comes from A. a shift in focus away from quality. B. increasing productivity of workers. C. speeding up inventory turnover. D. creating a buffer stock of inventory. E. writing off excess unsold inventory against earnings.

C. speeding up inventory turnover

Rinker Audio Products sources raw materials from six different suppliers around the world. These inputs are stored in Rinker-owned warehouses close to its manufacturing facility in Canton, Ohio. What part of the global supply chain do the suppliers and inputs warehouse together constitute? A. downstream B. manufacturing C. upstream D. value chain E. process

C. upstream

When should a firm concentrate its production facilities in a centralized location? A. when the production technology has a low minimum efficient scale B. when the production technology has low fixed costs C. when important exchange rates are expected to remain relatively stable D. when flexible manufacturing technologies are unavailable E. when the product's value-to-weight ratio is low

C. when important exchange rates are expected to remain relatively stable

What is the purpose of a letter of credit?

It states that the bank will pay a specified sum of money to a beneficiary on presentation of particular, specified documents.

In entering the European market, Rinker Audio Products is aware that each country in Europe is different and that the company has to be responsive to local needs. The company's CFO, Neha Patel, believes that the company has to address its minimum efficient scale of output to be successful in Europe. Which of the following statements is true about minimum efficient scale of output? A. With lesser utilization of capital equipment, the chances of a firm realizing economies of scale increases. B. A plant must avoid operating at the minimum efficient scale of output to realize all major plant-level scale economies. C. When the minimum efficient scale of production is very low relative to global demand, it will be economical to manufacture a product at a single location. D. An advantage of a low minimum efficient scale is that it allows the firm to accommodate demands for local responsiveness. E. A low minimum efficient scale increases the risk of potentially adverse fluctuations in exchange rates.

D. An advantage of a low minimum efficient scale is that it allows the firm to accomodate demands for local responsiveness

Which of the following includes a grouping of various types of machinery, a common materials handler, and a computer to control the production of a family of parts or products? A. specialized asset B. dynamic capability C. turnkey project D. flexible machine cell E. just-in-time inventory

D. Flexible machine cell

Which of the following is a result of using just-in-time inventory systems? A. It slows down inventory turnover. B. It increases inventory holding costs. C. It increases the amount of working capital a firm needs. D. It can help firms improve product quality. E. It does not allow defective inputs to be spotted immediately.

D. It can help firms improve product quality

Which of the following holds true for products with low value-to-weight ratios? A. They are relatively expensive. B. They do not weigh very much. C. Their transportation costs account for a very small percentage of total costs. D. It is advisable to manufacture them in multiple locations close to major markets. E. Examples of these products are electronic components and pharmaceuticals.

D. It is advisable to manufacture them in multiple locations close to major markets

Which of the following statements is true of Six Sigma? A. The higher the number of "sigmas," the higher the number of errors. B. At Six Sigma, a production process would be 90 percent accurate. C. Six Sigma work standards are based solely on numbers or quotas. D. It is almost impossible for a company to achieve Six Sigma perfection. E. Six Sigma is the modern successor to ISO 9000.

D. It is almost impossible for a company to achieve Six Sigma perfection

_____ was pioneered by Japanese firms during that country's remarkable economic transformation during the 1960s and 1970s. A. Lean production B. Flexible manufacturing technology C. Dynamic capabilities D. Just-in-time inventory systems E. Global learning

D. Just-in-time inventory systems

Which of the following is true of products with high value-to-weight ratios? A. They are expensive to transport. B. They tend to increase in weight after processing. C. They tend to be restricted under trade barriers. D. They are expensive and do not weigh very much. E. They have a low inventory turnover.

D. They are expensive and do not weigh very much

Amber Engineers Inc. wants to be able to customize products for different national markets and in turn increase its customer responsiveness. However, the fixed costs associated with its production are high. Hence, these functions will be performed most efficiently if Amber Engineers A. sets up a production facility that is well suited for mass production. B. establishes multiple manufacturing facilities in each major national market. C. increases each manufacturing unit's minimum efficient scale of output. D. adopts flexible manufacturing technologies to help achieve mass customization. E. locates its production unit in countries that have fluctuations in exchange rates.

D. adopts flexible manufacturing technologies to help achieve mass customization

The cost to manufacture one unit of Rinker Audio Products' bestselling hearing aid, the Magnifier, is $87.50. The CFO of the company, Neha Patel, has determined that if the company expands the output of its biggest U.S. plant by 20 percent, the unit cost would be only $82.50. The concept that as plant output expands, unit costs decrease, is known as A. minimum efficient scale. B. lean production. C. Six Sigma. D. economies of scale. E. total quality management.

D. economies of scale

Geminia Systems, a manufacturer of car components, wants to set up a system that will help in sending invoices to its customers once orders for input supply are placed. Which of the following should the company use to perform this function? A. computer-aided design system B. lean production C. just-in-time inventory system D. electronic data interchange E. social networking

D. electronic data interchange

What do firms now typically use via the Internet to coordinate the flow of materials into manufacturing, through manufacturing, and out to customers? A. flexible manufacturing technology B. lean production C. computer-aided manufacturing D. electronic data interchange E. just-in-time inventory systems

D. electronic data interchange

Six Sigma refers to a statistically based philosophy that aims to A. increase defects. B. lower productivity. C. increase the costs of value creation. D. eliminate waste. E. increase cost per unit.

D. eliminate waste

Which of the following refers to a logistics system designed to deliver parts to a production process as they are needed, not before? A. inventory information system B. basket trading system C. buffer stock system D. just-in-time inventory system E. real-time processing system

D. just-in-time inventory system

Mass customization reconciles the two goals of A. centralized production and long production runs. B. product standardization and economies of scale. C. high fixed costs and multiple production facilities. D. low cost and product customization. E. local responsiveness and decentralized production.

D. low cost and product custimization

One way to reduce the risks associated with a global supply chain that operates on just-in-time principles is to A. depend on one supplier for an important input. B. outsource the production of inputs only to advanced countries. C. hold an excess buffer stock of inventory. D. source inputs from several suppliers located in different countries. E. avoid using electronic data interchange.

D. source inputs from several suppliers located in different countries

_______ is a statistically based philosophy that aims to reduce defects, boost productivity, eliminate waste, and cut costs throughout a company.

Six Sigma

Which of the following is an implication of a mass production system? A. It results in short production runs. B. It fails to realize economies of scale. C. It reduces the number of defects and eliminates waste. D. It helps to accommodate consumer preferences for product diversity. E. It creates massive inventories that have to be stored in large warehouses.

E. It creates massive inventories that have to be stored in large warehouses

Which of the following is the initial reason for the establishment of a foreign production facility? A. Employee turnover is high. B. Products are not labor-intensive. C. Inventory turnover is low. D. Exchange rate fluctuations are high. E. Labor costs are low.

E. Labor costs are low

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

False

Ethnocentric staffing policies are in place when all key management positions are filled by host-country nationals.

False

___ refers to the extra pay an expatriate receives for working outside his or her country of origin.

Foreign service premium

Two product features impact location decisions. Which of the two reduces the need for local responsiveness?

product's ability to serve universal needs

Repatriation refers to

reentry of expatriate managers into their home-country organization

A product's value-to-weight ratio affects location decisions primarily because of its influence on

transportation costs

Centex Systems sources cables and wires from The Wrapper Corp. In this situation, The Wrapper Corp. is part of the ________ portion of the global supply chain.

upstream

Small electronic parts have a high value-to-weight ratio, which means that they

weigh very little but are expensive.

One disadvantage of an ethnocentric staffing policy is that it produces resentment in host-country nationals.

True

Unless a host country has a reciprocal tax treaty with the expatriate's home country, an expatriate must pay income tax to both the home- and host-country governments.

True

Rather than use cash, Indonesia traded textiles with the United States in exchange for corn. This is an example of which form of countertrade?

barter

Products with high value-to-weight ratios tend to

be expensive and not weigh very much.

In terms of using a third party in international trade, title to the products is given to a bank by the exporter in the form of a document known as a

bill of lading.

The number of intermediaries between the product (or manufacturer) and the consumer is referred to as

channel length.

Lots-of-Light Lanterns manufactures emergency lighting systems and markets them in underdeveloped countries that often lack easy access to electrical power. As the owner, LaTisha Reynolds knows that to successfully enter a foreign market, the retailers will have to be educated on how these products work. What factor is she considering?

channel quality

When analyzing the Central American market, Hudson Supply Inc. noticed that a few retailers supplied most of the market with all-cotton clothing. What kind of a retail system does this market have?

concentrated

The type of countertrade where a firm agrees to purchase a certain amount of materials back from a country to which a sale is made is called?

counterpurchase

The expatriate managers of Je Parle, a French leader in specialty perfumes, followed the same domestic marketing and management practices in foreign markets as their colleagues did in France. As a result, Je Parle's international expansion failed because the company suffers from

cultural myopia

Majestic Hats, based in Ontario, is determining how to deliver its product to consumers in England. What strategy is the company working on?

distribution

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

economies of scale

Miami WindSails wants to export but, as a small family business, is cautious, particularly with respect to financial risk. What is a strategic step that you would advise Miami WindSails to take to increase its probability of exporting successfully?

enter a foreign market on a small scale

What staffing policy is concerned with filling all key management positions by parent-country nationals?

ethnocentric

The Hopper Leg Winery from California's Sonoma Valley is trying to enter the wine market in France. To the company's surprise, it found that the France wine distribution channel was difficult to access as an outsider. Based on this, the market must have a(n) _________ distribution channel.

exclusive

Algonquin Cosmetics noticed that while India had a population of more than 1.2 billion people, the retail market was such that more than 95 percent of retail was through stand-alone stores that were not part of a chain. In other words, if Algonquin were to enter India, they would have to sell through thousands of independent retail stores. What kind of a retail system does India have for the products that Algonquin Cosmetics is trying to sell?

fragmented

According to Mendenhall and Oddou's dimensions that predict success in a foreign posting, an individual exhibiting an others-orientation would

have the ability to interact with host-country nationals.

When manufacturing a product that serves universal needs, a company should remember that it

increases the attractiveness of concentrating production at an optimal location

Mass customization provides companies with the ability to meet which two goals?

low cost and product customization

Many elderly travelers find it hard to climb stairs to motel rooms that are not on the first floor. The Stay-Right Inn has catered to this specific group of customers via its motels, all of which have one floor of rooms with no stairs to climb. What did Stay-Right Inn use to identify distinct groups of consumers whose needs, wants, and purchasing behavior differ from others in important ways?

market segmentation

Milly, the marketing manager for Nuance Cosmetics, believes that for the company to succeed in international markets, it has to address the choices surrounding product attributes, distribution strategy, communication strategy, and pricing strategy in its targeted markets. What is Milly specifically referring to?

marketing mix

The level of output at which most plant-level scale economies are exhausted is known as

minimum efficient scale

What is a critical variable that can affect a company's international communication?

noise levels

As a way to save costs, The Foundry Inc. set up a factory in a foreign country to produce the component parts it uses in the farm equipment it manufactures. The technology at this factory is kept to a minimum and management has no say in purchasing or production decisions. What type of factory is Foundry Inc. using?

offshore

The goal of market segmentation is to

optimize the fit between the purchasing behavior of consumers in a given segment and the marketing mix.

Harris was promoted to the international post because he had the ability to "put himself in another person's shoes" and understand why people in other countries behave the way they do. Which of Mendenhall and Oddou's dimensions does Harris display?

perceptual ability

In an effort to enter the European market, Rinker Audio Products wants to get ISO 9000 certification. However, a segment of the company's top management team is not supportive of this and to make their case, they cite various drawbacks of ISO 9000 certification. Which of the following is a drawback of ISO 9000 certification? A. It is bureaucratic and costly for many firms. B. It is an impossible standard to achieve. C. It is losing its prominence in international business. D. It is ineffective in improving processes. E. It is ineffective in bringing about quality improvement.

A. It is bureaucratic and costly for many firms

Which of the following firms should concentrate its production in a centralized location? A. Jupiter Inc. operates in an industry where the fixed costs are high and services of supporting industries are of prime importance. B. Star Goal Inc. manufactures consumer products like processed food, apparel, and cosmetics for which national differences in consumer taste and preference are wide. C. Uranious Inc. operates in an economy where volatile fluctuations in exchange rates are frequently expected. D. Earth Ventures Inc. is a mining company that exports iron ore—a product with low value-to-weight ratio—to various countries. E. Silver Times Inc. customizes heavy machines without the use of flexible manufacturing technologies.

A. Jupiter Inc. operates in an industry where the fixed costs are high and services of supporting industries are of prime importance

Which of the following companies adheres to the total quality management steps identified by W. Edward Deming? A. Unisorn Inc. believes in empowering employees by reducing interactions between them and their supervisors. B. Galaxy Inc. empowers its employees to report problems or recommend improvements without any fear. C. New Run Inc. bases its work standards solely on numbers or quotas. D. Ovion Inc. believes that the management is not responsible for training employees in new skills. E. Tirex Inc. endorses that the achievement of better quality is solely dependent on the lower management.

B. Galaxy Inc. empowers its employees to report problems or recommend improvements without any fear

Which of the following is true about firms using a just-in-time (JIT) inventory system? A. A company is more likely to have excess unsold inventory that it has to write off against earnings. B. Parts enter the manufacturing process immediately; they are not warehoused. C. It is difficult to spot and fix defective inputs. D. The amount of working capital a company needs to finance inventory increases. E. A firm has ample buffer stock of inventory.

B. Parts enter the manufacturing process immeditately; they are not warehoused

Which of the following is true of high value-to-weight ratio products? A. They tend to have greater weight than other products in the segment. B. Their transportation costs account for a very small percentage of total costs. C. They tend to be inexpensive. D. There is great pressure to produce these products in multiple locations close to major markets. E. These products gain weight as raw materials get processed during transportation.

B. Their transportation costs account for a very small percentage of total costs

Ronen Argo, the head of manufacturing of Rinker Audio Products wants the company to centralize its manufacturing in one location in a single country. In contrast, Neha Patel, the company's CFO wants the company to operate several manufacturing facilities in various countries. Which of the following statements is true about performing a manufacturing activity in several locations at once? A. A manufacturing activity must be performed at multiple locations when the fixed costs of setting up a production plant are high. B. Performing a manufacturing activity in several locations makes it difficult for a firm to accommodate demands for local responsiveness. C. Producing in multiple locations reduces the bargaining power of a firm against manufacturers. D. The larger the minimum efficient scale of a plant relative to total global demand, the greater the need for decentralizing production to multiple locations. E. Many firms disperse their manufacturing plants to different locations as a "real hedge" against potentially adverse moves in currencies.

E. Many firms disperse their manufacturing plants to different locations as a "real hedge: against potentially adverse moves in currencies

Which of the following is a recent trend among international businesses regarding make-or-buy decisions? A. Foreign facilities are considered nothing more than low-cost production facilities. B. Research and design operations are restricted to home-country production facilities. C. Manufacturing facilities are being based in each major national market. D. Firms are avoiding time-based competition with each other. E. Outsourcing decisions are expanding to embrace the production of service activities.

E. Outsourcing decisions are expanding to embrace the production of service activities

Which of the following statements is true of flexible manufacturing technologies? A. They promote the idea of manufacturing in each major market. B. They fail to produce multiple models from the same line. C. They are used to reconcile the goals of large volumes and standardized output. D. They decrease the utilization of individual machines. E. They allow firms to customize products to national differences at a single facility.

E. They allow firms to customize products to national differences at a single facility

As the global market for hearing products has become extremely competitive in recent months, Rinker Audio Products' newly appointed CFO, Neha Patel believes that the company should address its minimum efficient scale and attempt to lower it. Which of the following is a consequence of a low minimum efficient scale? A. preventing a firm from utilizing capital equipment fully B. necessitating centralized production in a single location or a limited number of locations C. preventing a firm from accommodating demands for local responsiveness D. increasing the unit cost of products E. allowing a firm to hedge against currency risk by manufacturing the same product in several locations

E. allowing a firm to hedge against currency risk by manufacturing the same product in several locations

Pink Polka Fashion Inc., a multinational clothing brand, has plans to expand in the European Union (EU) marketplace. To do so, the EU requires the company to A. adopt techniques of total quality management. B. achieve Six Sigma. C. use just-in-time inventory system. D. patent its designs and technology. E. certify its products under ISO 9000.

E. certify its products under ISO 9000

Which of the following is a step taken by automobile companies in situations where neither centralization nor decentralization of production is feasible? A. outsourcing production to developing countries B. inshoring production into the home country C. selling product patents and technology to competitors D. refraining from international trade E. establishing top-to-bottom manufacturing operations

E. establishing top-to-bottom manufacturing operations

Flexible manufacturing technologies are specially targeted at enabling companies to A. establish multiple manufacturing facilities in each major national market. B. build large inventories. C. achieve product standardization across markets. D. increase their work in progress. E. produce customized products without a significant cost penalty.

E. produce customized products without a significant cost penalty

Manufacturing firms should typically aim at lowering the costs of value creation by A. decreasing inventory turnover. B. stocking huge amounts of inventory. C. lowering the quality of products. D. increasing after-sales services cost. E. reducing production costs.

E. reducing production costs

When is decentralization of manufacturing facilities most appropriate? A. when the product serves universal needs B. when exchange rates are expected to remain relatively stable C. when the product's value-to-weight ratio is high D. when there are few trade barriers E. when the production technology has low minimum efficient scale

E. when the production technology has low minimum effiecient scale

An expatriate manager refers to

a citizen of one country who is working abroad in one of the firm's subsidiaries.