Supply Chain Chapter 2

1) Experience differentiation is an extension of product differentiation, accomplished by using people's five senses to create an experience rather than simply providing a service. True or False

True

1) Outsourcing is the practice of transferring a firm's activities that have traditionally been internal to external suppliers. True or False

True

10) The World Trade Organization helps provide governments and industries around the world with protection from firms that engage in unethical conduct. True or False

True

2) NAFTA seeks to phase out all trade and tariff barriers among Canada, Mexico, and the United States. True or False

True

3) Key success factors are those activities that are key to achieving competitive advantage. True or False

True

3) The World Trade Organization has helped to significantly reduce tariffs around the world. True or False

True

4) Production processes are being dispersed to take advantage of national differences in labor costs. True or False

True

5) The theory of comparative advantage implies that you should allow another firm to perform work activities for your company if that company can do it more productively than you can. True or False

True

6) One reason for global operations is to gain improvements in the supply chain. True or False

True

7) One reason to globalize is to learn to improve operations. True or False

True

8) To attract and retain global talent, and to expand a product's life cycle, are both reasons to globalize. True or False

True

4) The theory of competitive advantage implies that you should allow another firm to perform work activities for your company if that company can do it more productively than you can. True or False

False

5) NAFTA seeks to phase out all trade and tariff barriers between the United States and Asia. True or False

False

6) The term renewal has been created to describe the return of business activity to the originating country. True or False

False

9) A product will always be in the same stage of its product life cycle regardless of the country. True or False

False

1) An organization's strategy is the purpose or rationale for its existence. True or False

False

1) Key success factors and core competencies are synonyms. True or False

False

2) Low-cost leadership is the ability to distinguish the offerings of the organization in a way that the customer perceives as adding value. True or False

False

2) Outsourcing is the practice of moving a business process to a foreign country but retaining control of it. True or False

False

2) SWOT analysis is a method of determining external strengths and weaknesses and internal opportunities and threats. True or False

False

2) The multidomestic OM strategy maximizes local responsiveness while achieving a significant cost advantage. True or False

False

3) Core competencies are good candidates for outsourcing. True or False

False

3) Firms using the global strategy can be thought of as "world companies." True or False

False

1) A multinational corporation is a firm with extensive international business involvement. True or False

True

1) Boeing's development of the 787 Dreamliner is an example of a company obtaining a competitive advantage through product differentiation/innovation. True or False

True

10) Which of the following OM strategy/issues should a firm with a product in the maturity stage of its life cycle be LEAST concerned with at the present time? A) increase capacity B) long production runs C) standardization D) cost cutting E) fewer rapid product changes

A

11) Which of the following is the best example of competing on low-cost leadership? A) A firm produces its product with less raw material waste than its competitors do. B) A firm offers more reliable products than its competitors do. C) A firm's products are introduced into the market faster than its competitors' products are. D) A firm's research and development department generates many ideas for new products. E) A firm advertises more than its competitors do.

A

12) Which of the following has progressed the FURTHEST along its product life cycle? A) drive-through restaurants B) Boeing 787 C) iPods D) 3-D game players E) Xbox 360

A

16) The term maquiladora is most synonymous with: A) free trade zones in Mexico. B) Chinese forced labor camps. C) home-based or cottage industry. D) areas that do not meet U.S. standards for workplace safety and pollution. E) tax breaks provided by some South American countries to other South American countries.

A

4) Which of the following statements is most correct? A) KSFs are often necessary, but not sufficient for competitive advantage. B) KSFs are often sufficient, but not necessary for competitive advantage. C) KSFs are neither necessary nor sufficient for competitive advantage. D) KSFs are both necessary and sufficient for competitive advantage. E) None of the above statements is correct.

A

5) Which of the international operations strategies involves low cost reductions and low local responsiveness? A) international strategy B) global strategy C) transnational strategy D) multidomestic strategy E) worldwide strategy

A

6) Which of the international operations strategies uses import/export or licensing of existing products? A) international strategy B) global strategy C) transnational strategy D) multidomestic strategy E) worldwide strategy

A

8) Outsourcing is simply an extension of the long-standing practice of: A) subcontracting. B) importing. C) exporting. D) postponement. E) e-procurement.

A

10) Experience differentiation: A) isolates the consumer from the delivery of a service. B) is an extension of product differentiation in the service sector. C) uses only the consumer's senses of vision and sound. D) keeps consumers from becoming active participants in the service. E) attempts to make the service experience different for every single customer.

B

11) Given the position of the 3D printer in the growth stage of its life cycle, which of the following OM Strategy/Issues should the makers of 3D printers be least concerned with at the current time? A) forecasting B) cost cutting C) increasing capacity D) product and process reliability E) enhancing distribution

B

17) Which of the following is true of maquiladoras? A) They discourage foreign businesses from outsourcing. B) They assess tariffs only on the value-added work done. C) They originated in China. D) None of the above E) All of the above

B

2) Porter's Five Forces Model is used to evaluate competition based on which 5 aspects? A) research and development, cost, legal regulations, suppliers, customers B) immediate rivals, potential entrants, customers, suppliers, and substitute products C) potential entrants, customers, suppliers, legal regulations, and cost D) immediate rivals, potential entrants, cost, substitute products, and legal regulations E) cost, legal regulations, advertising effectiveness, potential entrants, and immediate rivals

B

21) With reference to cultural and ethical issues, the World Trade Organization has: A) eliminated bribery. B) made progress in providing equal protection of intellectual property among nations. C) phased out all trade and tariff barriers between the United States and Mexico. D) eliminated slave labor and child labor. E) played little role in addressing cultural and ethical issues among nations.

B

4) A firm can effectively use its operations function to yield competitive advantage through all of the following EXCEPT: A) customization of the product. B) setting equipment utilization goals below the industry average. C) speed of delivery. D) constant innovation of new products. E) maintaining a variety of product options.

B

4) The fundamental purpose of an organization's mission statement is to: A) create a good human relations climate in the organization. B) define the organization's purpose in society. C) define the operational structure of the organization. D) generate good public relations for the organization. E) define the functional areas required by the organization.

B

5) An SWOT analysis determines: A) internal strengths and weaknesses and internal opportunities and threats. B) internal strengths and weaknesses and external opportunities and threats. C) external strengths and weaknesses and internal opportunities and threats. D) external strengths and weaknesses and external opportunities and threats. E) internal strengths and opportunities and external weaknesses and threats.

B

6) According to the authors, which of the following strategic concepts allow firms to achieve their missions? A) productivity, efficiency, and quality leadership B) differentiation, cost leadership, and response C) differentiation, quality leadership, and response D) distinctive competency, cost leadership, and experience E) differentiation, distinctive competency, quality leadership, and capacity

B

6) Which of the following statements best characterizes delivery reliability? A) a company that always delivers on the same day of the week B) a company that always delivers at the promised time C) a company that delivers more frequently than its competitors D) a company that delivers faster than its competitors E) a company that has a computerized delivery scheduling system

B

10) What theory implies that you should allow another firm to perform work activities for your company if that company can do it more productively than you can? A) theory of competitive advantage B) theory of core competencies C) theory of comparative advantage D) theory of outsourcing

C

11) Which of the following statements is most accurate? A) Nearly all outsourcing relationships do not last beyond two years. B) Nearly all U.S. firms that outsourced processes to India have backsourced them. C) Approximately half of all outsourcing agreements fail. D) Outsourcing is a relatively risk-free activity. E) More than 90% of outsourcing agreements succeed.

C

13) Which of the following is an example of competing on quick response? A) A firm produces its product with less raw material waste than its competitors do. B) A firm offers more reliable products than its competitors do. C) A firm's products are introduced into the market faster than its competitors' products. D) A firm utilizes its capacity more effectively than its competitors do. E) A firm advertises more than its competitors do.

C

14) Which of the following did the authors NOT suggest as a reason for globalizing operations? A) reduce costs B) improve the supply chain C) pursue stockholder approval ratings D) understand markets E) attract and retain global talent

C

19) Which of the following does NOT represent a valid reason for globalizing operations? A) reduce costs B) improve the supply chain C) reduce responsiveness D) attract and retain global talent E) understand markets

C

2) Which of the following activities takes place most immediately once the mission has been developed? A) The firm develops alternative or back-up missions in case the original mission fails. B) The functional areas develop their functional area strategies. C) The functional areas develop their supporting missions. D) The ten OM decision areas are prioritized. E) Operational tactics are developed.

C

3) Which of the following statements about organizational missions is FALSE? A) They reflect a company's purpose. B) They indicate what a company intends to contribute to society. C) They are formulated after strategies are known. D) They define a company's reason for existence. E) They provide guidance for functional area missions.

C

4) Which of the international operations strategies involves high cost reductions and high local responsiveness? A) international strategy B) global strategy C) transnational strategy D) multidomestic strategy E) worldwide strategy

C

4) Who introduced the concept of value-chain analysis? A) Ford B) Toyota C) Porter D) Smith E) Gates

C

5) Which of the following statements is true? A) Corporate mission is shaped by functional strategies. B) Corporate strategy is shaped by functional strategies. C) Functional strategies are shaped by corporate strategy. D) External conditions are shaped by corporate mission. E) Functional area missions are merged to become the organizational mission.

C

8) Standardization is an appropriate strategy in which stage of the product life cycle? A) introduction B) growth C) maturity D) decline E) retirement

C

12) Boeing's new 787 Dreamliner: A) is assembled in Washington, D.C. B) uses engines from Japan. C) has its fuselage sections built in Australia. D) has increased efficiency from new engine technology. E) results from a partnership of about a dozen companies.

D

12) Franz Colruyt has achieved low-cost leadership through: A) effective use of voice mail. B) plastic, not paper, shopping bags. C) background music that subtly encourages shoppers to buy more. D) converting factories, garages, and theaters into retail outlets. E) exclusive use of the Euro.

D

12) Which of the following is not an advantage of outsourcing? A) cost savings B) gaining outside expertise C) improving operations and service D) outsourcing core competencies E) accessing outside technology

D

13) Which of the following has made the LEAST progress along its product life cycle? A) drive-through restaurants B) Boeing 787 C) iPods D) 3-D game players E) Xbox 360

D

14) Response-based competitive advantage can be: A) flexible response. B) reliable response. C) quick response. D) all of the above. E) none of the above.

D

15) An operations manager is performing a factor-rating analysis to help him choose an outsourcing provider. He is focusing on two factors: A and B, using a weight of 75% for factor A and 25% for factor B. He has scored five different potential providers on both factors, using a scale of 1-5, with 1 representing the BEST score. Based on the scores provided in the table below, which provider should be chosen? Provider Factor A Factor B Alpha 1 5 Beta 3 3 Gamma 4 1 Phi 2 1 Omega 3 5 A) Alpha B) Beta C) Gamma D) Phi E) Omega

D

20) The purpose of NAFTA is to: A) substitute cheap labor in Mexico for expensive labor in the United States. B) curb illegal immigration from Mexico to the United States. C) phase out all trade and tariff barriers between North America and South America. D) phase out all trade and tariff barriers between the United States, Canada, and Mexico. E) provide fair and equitable tariff rates for trade between the United States, Canada, and Mexico.

D

3) Which of the following is LEAST likely to be a low-cost leadership competitive advantage? A) low overhead B) effective capacity use C) inventory management D) broad product line E) mass production

D

6) Which of the following is not part of value-chain analysis? A) product research B) quality management C) supply chain management D) marketing E) human resources

D

7) What is the practice of transferring a firm's activities that have traditionally been internal to external suppliers? A) nearshoring B) farshoring C) offshoring D) outsourcing E) backsourcing

D

7) Which of the following is an example of competing on the basis of differentiation? A) A firm manufactures its product with less raw material waste than its competitors do. B) A firm's products are introduced into the market faster than its competitors' products are. C) A firm's distribution network routinely delivers its product on time. D) A firm offers more reliable products than its competitors do. E) A firm advertises more than its competitors do.

D

7) Which of the international operations strategies uses the existing domestic model globally? A) international strategy B) global strategy C) transnational strategy D) multidomestic strategy E) worldwide strategy

D

8) The acronym MNC stands for A) Mexican National Committee (for international trade) B) Maquiladora Negates Competition C) Maytag-Nestlé Corporation D) Multinational Corporation E) Maritime Navigation Company

D

9) Cost minimization is an appropriate strategy in which stage of the product life cycle? A) introduction B) growth C) adolescence D) decline E) retirement

D

1) Before establishing and implementing strategy, a resources view would ensure that which of the following resources are available? A) financial B) physical C) human D) technological E) all of the above

E

11) Which of the following statements regarding the Dreamliner 787 is true? A) Boeing has found partners in over a dozen countries. B) The new aircraft incorporates a wide range of aerospace technologies. C) The new aircraft uses engines from not one, but two manufacturers. D) Boeing will add only 20 to 30 percent of the aircraft's value. E) All of the above are true.

E

13) Advantages of outsourcing do NOT include: A) cost savings. B) gaining outside expertise. C) maintaining a focus on core competencies. D) accessing outside technology. E) potential creation of future competition.

E

13) Cost cutting in international operations can take place because of: A) lower taxes and tariffs. B) lower wage scales. C) lower indirect costs. D) less stringent regulations. E) all of the above.

E

14) An operations manager is performing a factor-rating analysis to help her choose an outsourcing provider. She is focusing on three factors: A, B, and C, with weights of .50, .20, and .30, respectively. She has scored one potential outsourcer, Ling Services, on each of the factors using a scale of 10-50. Ling Services received a score of 30 for factor A, 46 for factor B, and 22 for factor C. What is the factor-rating score for Ling Services? A) 98.0 B) 32.7 C) 21.8 D) 29.2 E) 30.8

E

15) Multinational organizations can shop from country to country and cut costs through: A) lower wage scales. B) lower indirect costs. C) less stringent regulations. D) lower taxes and tariffs. E) all of the above.

E

18) Which of the following represents a reason for globalizing operations? A) to improve the supply chain B) to improve operations C) to expand a product's life cycle D) to attract and retain global talent E) all of the above

E

3) Porter's Five Forces Model contains which of the following? A) immediate rivals B) potential entrants C) customers D) suppliers E) all of the above

E

5) The ability of an organization to produce goods or services that have some uniqueness in their characteristics is: A) mass production. B) time-based competition. C) competing on productivity. D) competing on quality. E) competing on differentiation.

E

5) Value-chain analysis can be used to determine if a business is adding unique value in which of the following areas? A) product research B) human resources C) process innovation D) quality management E) all of the above

E

7) A strategy is a(n): A) set of opportunities in the marketplace. B) broad statement of purpose. C) simulation used to test various product line options. D) plan for cost reduction. E) action plan to achieve the mission.

E

7) Which of the following environmental factors has not contributed to Microsoft's changing strategy? A) Google B) security issues C) faster processors D) the Internet E) global warming

E

8) The ability of an organization to produce services that, by utilizing the consumer's five senses, have some uniqueness in their characteristics is: A) sensory response. B) time-based competition. C) differentiation. D) flexible response. E) experience differentiation.

E

9) Caterpillar and Texas Instruments are two firms that have benefited from the use of: A) the multidomestic strategy option. B) the international strategy option. C) the transnational strategy option. D) the maquiladora system in Europe. E) the global strategy option.

E

9) Outsourcing manufacturing is also known as: A) license manufacturing. B) sublease manufacturing. C) concurrent manufacturing. D) hollow manufacturing. E) contract manufacturing.

E

9) Which of the following best describes experience differentiation? A) immerses consumers in the delivery of a service B) uses people's five senses to enhance the service C) complements physical elements with visual and sound elements D) consumers may become active participants in the product or service E) All of the above are elements of experience differentiation.

E