Chapter 2 SCMA 331

A multinational corporation has extensive international business involvements.

True

An organization's ability to generate unique advantages over competitors is central to a successful strategy implementation.

True

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

True

Decisions that involve what is to be made and what is to be purchased fall under the heading of supply-chain management.

True

Errors made within the location decision area may overwhelm efficiencies in other areas.

True

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

Which of the following has progressed the furthest along its product life cycle? A) drive-thru restaurants B) Boeing 787 C) iPods D) Twitter E) Xbox 360

A

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) none of the above

D

Which of these companies is most apt to have quality standards that are relatively subjective? A) Chrysler B) Dell Computer C) Sanyo Electronics D) Harvard University E) Whirlpool

D

Low-cost leadership is the ability to distinguish the offerings of the organization in any way that the customer perceives as adding value.

False

Manufacturing organizations have ten strategic OM decisions, while service organizations have only eight.

False

Most services are tangible; this factor determines how the ten decisions of operations management are handled differently for goods than for services.

False

NAFTA seeks to phase out all trade and tariff barriers between the United States and Asia.

False

Operations strategies are implemented in the same way in all types of organizations.

False

SWOT analysis is a method of determining external strengths and weaknesses and internal opportunities and threats.

False

The multidomestic OM strategy maximizes local responsiveness while achieving a significant cost advantage.

False

For the greatest chance of success, an organization's operations management strategy must support the company's strategy.

True

Key Success Factors are those activities that are key to achieving competitive advantage.

True

NAFTA seeks to phase out all trade and tariff barriers among Canada, Mexico, and the United States.

True

One reason for global operations is to gain improvements in the supply chain.

True

One reason to globalize is to learn to improve operations.

True

Production processes are being dispersed to take advantage of national differences in labor costs.

True

Southwest Airlines' core competence is operations.

True

The World Trade Organization has helped to significantly reduce tariffs around the world.

True

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

True

The relative importance of each of the ten operations decisions depends on the ratio of goods and services in an organization.

True

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

True

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) none of the above

A

The three steps of the operations manager's job, in order, are: A) develop the strategy, establish the organizational structure, find the right staff B) develop the strategy, find the right staff, establish the organizational structure C) find the right staff, establish the organizational structure, develop the strategy D) find the right staff, develop the strategy, establish the organizational structure E) establish the organizational structure, find the right staff, develop the strategy

A

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

Which of the following OM strategic decisions pertains to sensible location of processes and materials in relation to each other? A) layout design B) goods and service design C) supply-chain management D) inventory E) scheduling

A

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. B) A firm offers more reliable products than its competitors. C) A firm's products are introduced into the market faster than its competitors' products. D) A firm's research and development department generates many ideas for new products. E) A firm advertises more than its competitors.

A

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

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) none of the above

A

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) none of the above

A

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

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 quick response C) differentiation, quality leadership, and quick response D) distinctive competency, cost leadership, and experience E) differentiation, distinctive competency, quality leadership, and capacity

B

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) is the same as product differentiation, but applied in the service sector

B

Given the position of the iPod in the growth stage of its life cycle, which of the following OM Strategy/Issues should the makers of iPods 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

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) none of the above

B

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

Which of the following is not an operations strategic decision? A) maintenance B) price C) layout design D) quality E) inventory

B

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

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

Which of the international operations strategies involves a focus on high cost reductions and low local responsiveness? A) international strategy B) global strategy C) transnational strategy D) multidomestic strategy E) none of the above

B

With reference to cultural and ethical issues, the World Trade Organization has A) succeeded in providing equal protection of intellectual property among nations 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

__________ and __________ are two issues where significant cultural differences are large and progress toward global uniformity has been slow.

Bribery, protection of intellectual property

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

C

Value-chain analysis is used to identify activities that represent, or can develop into, the core competencies of a business. Who introduced this concept? A) Ford B) Toyota C) Porter D) Smith E) None of the above

C

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

Which of the following did the authors not suggest as a reason for globalizing operations? A) reduce costs B) improve the supply chain C) stockholder approval ratings D) understand markets E) None of the above were suggested.

C

Which of the following does not represent a reason for globalizing operations? A) reduce costs B) improve the supply chain C) reduce responsiveness D) attract and retain global talent E) None of the above are valid reasons for globalizing operations.

C

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. B) A firm offers more reliable products than its competitors. C) A firm's products are introduced into the market faster than its competitors' products. D) A firm utilizes is capacity more effectively than its competitors. E) A firm advertises more than its competitors.

C

Which of the following is an example of globalization of operations strategy? A) Boeing's Dreamliner has engines with higher fuel/payload efficiency. B) Ford's new auto models have dent-resistant panels. C) A Chinese manufacturer, Haier, now operates plants in the United States. D) Hard Rock Café provides an "experience differentiation" at its restaurants. E) All of the above are examples.

C

Which of the following is true about business strategies? A) An organization should stick with its strategy for the life of the business. B) All firms within an industry will adopt the same strategy. C) Well defined missions make strategy development much easier. D) Strategies are formulated independently of SWOT analysis. E) Organizational strategies depend on operations strategies.

C

Which of the following 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

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

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) none of the above

C

A firm producing a good is more likely to have which set of the following characteristics compared to a firm providing a service? A) many subjective quality standards, tangible product, and locate away from customers B) many subjective quality standards, intangible product, and locate away from customers C) many objective quality standards, tangible product, and locate near customers D) many objective quality standards, tangible product, and locate away from customers E) many objective quality standards, intangible product, and locate away from customers

D

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

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

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

NAFTA seeks 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) All of the above are NAFTA goals.

D

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

The acronym MNC stands for A) Mexican National Committee (for international trade) B) Maquiladora Negates Competition C) Maytag-Nestlé Corporation D) Multinational Corporation E) none of the above

D

What term describes how an organization expects to achieve its missions and goals? A) conditional expectation B) tactic C) SWOT D) strategy E) competitive advantage

D

When developing the operations strategy for a new manufacturing organization, one of the most important considerations is that it A) requires minimal capital investment B) utilizes as much automation as possible C) utilizes an equal balance of labor and automation D) supports the overall competitive strategy of the company E) none of the above

D

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

Which of the following is least likely to be a Cost Leadership competitive advantage? A) low overhead B) effective capacity use C) inventory management D) broad product line E) mass production

D

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

Which of the following statements concerning the operations management decision is relevant to services? A) There are many objective quality standards. B) The customer is not involved in most of the process. C) The work force's technical skills are very important. D) Labor standards vary depending on customer requirements. E) Ability to inventory may allow the leveling of the output rates.

D

Which of the following will more likely locate near their customers? A) an automobile manufacturer B) an aluminum manufacturer C) an insurance company headquarters D) a medical clinic E) All of the above will tend to locate near their customers.

D

Which of the international operations strategies involves a focus on low cost reductions and high local responsiveness? A) international strategy B) global strategy C) transnational strategy D) multidomestic strategy E) none of the above

D

Key success factors and core competencies are synonyms.

False

Which of these organizations is likely to have the most complex inventory decisions? A) a marketing research firm B) a stock brokerage firm C) a management consulting firm D) a computer manufacturing company E) a high school

D

Which of these organizations is likely to have the most important inventory decisions? A) a marketing research firm B) a lobbying agency C) a management consulting firm D) an aluminum manufacturer E) a law firm

D

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

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

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

E

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

Examples of response to the global environment include A) Boeing's worldwide sales and production B) Benneton's flexibility in design, production, and distribution C) a Chinese manufacturer, Haier, opening plants in the United States D) Ford's partnerships with Volvo and Mazda E) all of the above

E

Franz Colruyt has achieved low-cost leadership through A) Spartan headquarters B) absence of voice mail C) low-cost facilities D) no background music E) all of the above

E

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

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

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 flexibility E) competing on differentiation

E

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

E

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

Which of the following are examples of transnational firms? A) Nestlé B) Asea Brown Boveri C) Reuters D) Citicorp E) All of the above are transnationals.

E

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

Which of the following environmental factors has not been a factor in Microsoft's changing strategy? A) Google B) security issues C) faster processors D) the Internet E) none of the above

E

Which of the following influences layout design? A) inventory requirements B) capacity needs C) personnel levels D) technology decisions E) All of the above influence layout decisions.

E

Which of the following is least likely to result in a strategy change? A) change in the company's financial situation B) a company's adoption of new technology C) change in the product life cycle D) change in the competitive environment E) change in job scheduling techniques

E

Which of the following represent reasons for globalizing operations? A) to gain improvements in 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

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

A product will always be in the same stage of its product life cycle regardless of the country.

False

An organization's strategy is its purpose or rationale for an organization's existence.

False

Firms using the global strategy can be thought of as "world companies."

False

__________ are areas located along the U.S.-Mexico border in which factories receive preferential tariff treatment.

Maquiladoras

__________ is a free trade agreement among Canada, Mexico, and the United States.

NAFTA--North American Free Trade Agreement

Boeing found its Dreamliner 787 partners in __________ countries.

over a dozen