BUS 498 - Chapter 15 Questions

30) Which of the following holds true for products with low value-to-weight ratios?

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

11) Which of the following statements is true of Six Sigma?

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

35) Which of the following firms should concentrate its production in a centralized location?

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

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

Six Sigma

56) _____ has caused proprietary software solutions to implement electronic data interchange systems to become obsolete.

The Internet

7) Which of the following companies adheres to the total quality management steps identified by W. Edward Deming?

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

51) Which of the following is a result of using just-in-time inventory systems?

It can help firms improve product quality

17) Which of the following is an implication of a mass production system?

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

19) Which of the following is a consequence of using flexible machine cells?

It improves capacity utilization and reduces wastes

32) Which of the following is true of a product that serves universal needs?

It increases the attractiveness of concentrating production at an optimal location

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

product's ability to serve universal needs

4) Manufacturing firms should typically aim at lowering the costs of value creation by?

reducing production costs

15) Which of the following is an objective of lean production?

reducing setup times for complex equipment

2) A second strategic objective shared by production and supply chain management is to increase product quality. In this context, quality means?

reliability

55) 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?

reverse logistics

52) One way to reduce the risks associated with a global supply chain that operates on just-in-time principles is to?

source inputs from several suppliers located in different countries

48) A major cost saving from just-in-time inventory systems comes from?

speeding up inventory turnover

5) 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?

total quality management

33) Concentration of production makes most sense when?

trade barriers are low

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

transportation costs

24) Technological factors are making it feasible for firms to concentrate manufacturing facilities at optimal locations. The major brakes on this trend are?

transportation costs and trade barriers

34) When should a firm concentrate its production facilities in a centralized location?

when important exchange rates are expected to remain relatively stable

36) When is decentralization of manufacturing facilities most appropriate?

when the production technology has low minimum efficient scale

49) Under a more traditional system as opposed to a just-in-time inventory system, warehousing parts for weeks before they are used will?

allow many defective parts to be produced before a problem is recognized

20) When a company achieves mass customization via flexible manufacturing technologies, it increases the company's?

customer responsiveness

3) The effect of improved quality control is to lower the costs of value creation by reducing production costs and?

decreasing after-sales service costs

53) What do firms now typically use via the Internet to coordinate the flow of materials into manufacturing, through manufacturing, and out to customers?

electronic data interchange

54) Which of the following allows suppliers, shippers, and the purchasing firm to communicate with each other via the Internet with no time delay?

electronic data interchange system

10) Six Sigma refers to a statistically based philosophy that aims to?

eliminate waste

38) Which of the following is a step taken by automobile companies in situations where neither centralization nor decentralization of production is feasible?

establishing top-to-bottom manufacturing operations

18) 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?

flexible machine cell

13) Producing a standardized product in large volumes will?

increase production efficiency

14) Adopting flexible manufacturing technology to produce a wide variety of end products results in?

increased utilization of individual machines

47) Under a just-in-time (JIT) inventory system, it is likely that the _____ will increase.

inventory turnover

45) Which of the following refers to a logistics system designed to deliver parts to a production process as they are needed, not before?

just-in-time inventory system

50) The drawback of a just-in-time inventory system is that it?

leaves a firm without a buffer stock of inventory

16) Mass customization reconciles the two goals of?

low cost and product customization

1) An important objective shared by both production and logistics functions of an international firm is to?

lower costs by dispersing production activities

43) Which of the following is an objective of logistics?

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

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

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

22) 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?

mass customization

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

minimum efficient scale

29) Which of the following products is best manufactured in multiple locations close to major markets to reduce transportation costs?

petroleum products

21) Flexible manufacturing technologies are specially targeted at enabling companies to?

produce customized products without a significant cost penalty

37) Which of the following firms should spread its production over decentralized locations?

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

41) Which of the following is a recent trend among international businesses regarding make-or-buy decisions?

Outsourcing decisions are expanding to embrace the production of service activities

44) _____ was pioneered by Japanese firms during that country's remarkable economic transformation during the 1960s and 1970s.

Just-in-time inventory systems

40) Which of the following is the initial reason for the establishment of a foreign production facility?

Labor costs are low

46) Which of the following is true about firms using a just-in-time (JIT) inventory system?

Parts enter the manufacturing process immediately; they are not warehoused

39) _____ is a hidden cost to basing production in a foreign location.

Poor product quality

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

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

27) Which of the following is true of high value-to-weight ratio products?

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

23) Which of the following statements is true of flexible manufacturing technologies?

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

28) Which of the following is true of products with high value-to-weight ratios?

They are expensive and do not weigh very much

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

They serve needs that are the same all over the world

6) The total quality management philosophy was developed by a number of American consultants. Which of the following individuals is one of them?

W. Edward Deming