OMGT 5003 Midterm
International business
A firm that engages in cross-border transactions.
Multinational corporation (MNC)
A firm that has extensive involvement in inter-national business, owning or controlling facilities in more than one country.
Which of the following is an example of competing on quick response?
A firm's products are introduced into the market faster than its competitors' products
NAFTA
A free trade agreement between Canada, Mexico, and the United States.
Activity map
A graphical link of competitive advantage, KSFs, and supporting activities.
SWOT analysis
A method of determining internal strengths and weaknesses and external opportunities and threats.
Core competencies
A set of unique skills, talents, and activities that a firm does particularly well. A core competence may be a combination of KSFs.
Response
A set of values related to rapid, flexible, and reliable performance.
International strategy
A strategy in which global markets are penetrated using exports and licenses with little local responsiveness.
Global strategy
A strategy in which operating decisions are centralized and head-quarters coordinates the standardization and learning between facilities.
Multidomestic strategy
A strategy in which operating decisions are decentralized to each country to enhance local responsiveness.
Transnational strategy
A strategy that combines the benefits of global-scale ef-ficiencies with the benefits of local responsiveness. These firms transgress national boundaries.
Resources view
A view in which managers evaluate the resources at their disposal and manage or alter them to achieve competitive advantage.
Five forces model
A way to analyze the five forces in the competitive environment.
Value-chain analysis
A way to identify the elements in the product/service chain that uniquely add value.
How can the improvement of productivity be achieved?
reducing inputs while keeping output constant or increasing output while keeping inputs constants
Outsourcing is simply an extension of the long-standing practice of:
subcontracting.
What is a global network of organizations and activities that supply a firm with goods and services?
supply chain
Productivity measurement is complicated by:
the fact that precise units of measure are often unavailable.
Short-range forecasts tends to ________ longer-range forecasts.
be more accurate than
The term maquiladora is most synonymous with:
free trade zones in Mexico.
Eli Whitney, in the ________, provided the foundations for ________ in operations management.
nineteenth century; interchangeable parts
What is the practice of transferring a firm's activities that have traditionally been internal to external suppliers?
outsourcing
he purpose of NAFTA is to:
phase out all trade and tariff barriers between the United States, Canada, and Mexico.
Which of the following is NOT an element of the management process?
pricing
The purchasing function is concerned with:
procuring materials, supplies, and equipment
Delphi method
Uses an interactive group process that allows experts to make forecasts.
Forecasting follows seven basic steps:
(1) Determine the use of the forecast; (2) Select the items to be forecasted; (3) Determine the time horizon of the forecast; (4) Select the forecasting model(s); (5) Gather the data needed to make the forecast; (6) Make the forecast; (7) Validate and implement the results.
Forces in Porter's five forces model are
(1) immediate rivals, (2) potential entrants, (3) customers, (4) suppliers, and (5) substitute products.
If two variables were perfectly correlated, what would the coefficient of correlation r equal?
-1 or 1
10 Strategic OM Decisions
1. Design of goods and services 2. Managing quality 3. Process strategy 4. Location strategies 5. Layout strategies 6. Human resources 7. Supply-chain management 8. Inventory management 9. Scheduling 10. Maintenance
The three strategic approaches to competitive advantage are:
1. Differentiation 2. Cost leadership 3. Response
Domestic business operations decide to change to some form of international opera-tions for six main reasons:
1. Improve supply chain 2. Reduce costs and exchange rate risks 3. Improve operations 4. Understand markets 5. Improve products 6. Attract and retain global talent
Three functions to create goods and services
1. Marketing: generates the demand. 2. Production/operations: creates, produces, and delivers the product. 3. Finance/accounting: tracks how well the organization is doing, pay the bills, and collects the money.
The Management Process
1. Planning 2. Organizing 3. Staffing 4. Leading 5. Controlling
Ethical challenges facing operations managers
1. efficiently developing and producing safe, quality products; 2. maintaining a clean environment; 3. providing a safe workplace; and 4. honoring stakeholder commitments.
European Union (EU)
A European trade group that has 28 member states.
Potential risks of outsourcing include:
A drop in quality or customer service Political backlash that results from outsourcing to foreign countries Negative impact on employees Potential future competition Increased logistics and inventory costs
Which of the following is the best example of competing on low-cost leadership?
A firm produces its product with less raw material waste than its competitors do.
Who among the following is associated with contributions to quality control in operations management?
W. Edwards Deming
A forecast with a time horizon of about 3 months to 3 years is typically called a:
medium-range forecast.
Low-cost leadership
Achieving maximum value, as perceived by the customer.
Key success factors (KSFs)
Activities or factors that are key to achieving competi-tive advantage.
Multinational organizations can shop from country to country and cut costs through:
All of these.
Adaptive smoothing
An approach to exponential smoothing forecasting in which the smoothing constant is automatically changed to keep errors to a minimum.
Why should organizations have a mission and strategy?
An effective operations management effort must have a mission so it knows where it is going and a strategy so it knows how to get there.
World Trade Organization (WTO)
An international organization that promotes world trade by lowering barriers to the free flow of goods across borders.
Naive approach
Assumes that demand in the next period is equal to demand in the most recent period.
Sales force composite
Based on salespersons' estimates of expected sales.
Which of the following uses three types of participants: decision makers, staff personnel, and respondents?
Delphi method
Differentiation
Distinguishing the offerings of an organization in a way that the customer perceives as adding value.
Market survey
Solicits input from customers or potential customers regarding future purchasing plans.
Services
Economic activities that typically produce an intangible product (such as education, entertainment, lodging, government, financial, and health services)
Which of the following is NOT a step in the forecasting process?
Eliminate any assumptions.
Experience differentiation
Engaging the customer with a product through imagina-tive use of the five senses, so the customer "experiences" the product.
Quantitative forecasts
Forecasts that employ mathematical modeling to forecast demand.
Qualitative forecast
Forecasts that incorporate such factors as the decision maker's intuition, emotions, personal experiences, and value system.
The "Father of Scientific Management" is:
Frederick W. Taylor.
What is a strategy?
How an organization expects to achieve its missions and goals.
Characteristics of services
Intangible Produced and consumed simultaneously Unique High customer interactions Inconsistent product definition Often knowledge based Services dispersed Quality may be hard to evaluate Reselling is unusual
The four operations strategies for approaching global opportunities can be classified according to local responsiveness and cost reduction:
International strategy—A strategy in which global markets are penetrated using exports and licenses with little local responsiveness. Multidomestic strategy—A strategy in which operating decisions are decentralized to each country to enhance local responsiveness. Global strategy—A strategy in which operating decisions are centralized and head-quarters coordinates the standardization and learning between facilities. Transnational strategy—A strategy that combines the benefits of global-scale ef-ficiencies with the benefits of local responsiveness. These firms transgress national boundaries.
Different issues are emphasized during different stages of the product life cycle:
Introduction—Company strategy: Best period to increase market share, R&D engi-neering is critical. OM strategy: Product design and development critical, frequent product and process design changes, short production runs, high production costs, limited models, attention to quality. Growth—Company strategy: Practical to change price or quality image, strengthen niche. OM strategy: Forecasting critical, product and process reliability, competitive product improvements and options, increase capacity, shift toward product focus, enhance distribution. Maturity—Company strategy: Poor time to change image or price or quality, competitive costs become critical, defend market position. OM strategy: Standard-ization, less rapid product changes (more minor changes), optimum capacity, increasing stability of process, long production runs, product improvement and cost cutting. Decline—Company strategy: Cost control critical. OM strategy: Little product dif-ferentiation, cost minimization, overcapacity in the industry, prune line to eliminate items not returning good margin, reduce capacity.
Which of the following statements about time-series forecasting is true?
It is based on the assumption that the analysis of past demand helps predict future demand.
Technological forecasts
Long-term forecasts concerned with the rates of tech-nological progress
Operational hedging
Maintaining excess capacity in different countries and shift-ing production levels among those countries as costs and exchange rates change.
Maquiladoras
Mexican factories located along the U.S.-Mexico border that re-ceive preferential tariff treatment.
Current challenges in operations management include all of the following EXCEPT:
None of these are exceptions, i.e., all are current challenges.
Economic forecasts
Planning indicators that are valuable in helping organiza-tions prepare medium-to long-range forecasts.
Outsourcing
Procuring from external sources services or products that are nor-mally part of an organization.
Demand forecasts
Projections of a company's sales for each time period in the planning horizon.
Current challenges in Operations Management
Some of the current challenges for operations managers include: Global focus; international collaboration Supply chain partnering; joint ventures; alliances Sustainability; green products; recycle, reuse Rapid product development; design collaboration Mass customization; customized products Lean operations; continuous improvement and elimination of waste
Jury of executive opinion
Takes the opinion of a small group of high-level managers and results in a group estimate of demand.
Forecasting
The art and science of predicting future events.
Competitive advantage—
The creation of a unique advantage over competitors.
What is a mission?
The purpose or rationale for an organization's existence.
Theory of comparative advantage
The theory which states that countries benefit from specializing in (and exporting) products and services in which they have rela-tive advantage and importing goods in which they have a relative disadvantage.
Productivity variables
The three factors critical to productivity improvement: labor capital and the art and science of management
Time-series data may exhibit which of the following behaviors?
They may exhibit all of these.
What are stakeholders?
Those with a vested interest in an organization
Time series
Uses a series of past data points to make a forecast.
Moving average
Uses an average of the n most recent periods of data to fore-cast the next period.
The degree or strength of a relationship between two variables is shown by the:
coefficient of correlation.
Which of the following is the best example of a pure service?
counseling
Cost minimization is an appropriate strategy in which stage of the product life cycle?
decline
According to the authors, which of the following strategic concepts allow firms to achieve their missions?
differentiation, cost leadership, and response
Porter's Five Forces Model contains which of the following?
immediate rivals potential entrants customers suppliers All of these
A fundamental distinction between trend projection and linear regression is that:
in trend projection the independent variable is time; in linear regression the independent variable need not be time, but can be any variable with explanatory power.
Single-factor productivity
indicates the ratio of goods and services produced (outputs) to one resource (input)
Multifactor productivity
indicates the ratio or goods and services produced (outputs) to many or all resources (inputs)
Which of the following fosters specialization and worldwide supply chains?
instant communication
Supply Chain
is a global network of organizations and activities that supply a firm with goods and services
The factor-rating method
is an excellent tool for dealing with both country risk assess-ment and provider selection problems.
Production
is the creation of goods and services.
Productivity
is the ratio of outputs (goods and services) divided by the inputs (resources such as labor, capital, or management)
Operations Management
is the set of activities that creates value in the form of goods and services by transforming inputs into outputs.
What is the operations manager's job?
is to enhance (improve) the productivity (ratio of inputs and outputs. Improving productivity means improving efficiency.
The forecasting technique that pools the opinions of a group of experts or managers is known as:
jury of executive opinion.
Three commonly used productivity variables are:
labor, capital, and management.
The largest contributor to productivity increases is ________, estimated to be responsible for ________ of the annual increase.
management; over one-half
Standardization is an appropriate strategy in which stage of the product life cycle?
maturity