INTB Chapter 15

What are the considerations that help determine where an international firm will locate its production facilities?

Ability to minimize costs and improve quality

A firm is considering two countries as sites for production facilities. Both countries have similar factor costs and political climates. Country A has poor infrastructure; Country B has access to technology and relatively easy transport of raw materials. Country ___ seems to offer better location economies.

B

True or false: The term production is only used to denote a physical product.e

False

True or false: When considering the building blocks for global supply chains, all relationships between vendors, suppliers, and partners are equally valuable.

False

Factors that favor a decentralized production strategy

Few differences in political economy Few differences in culture Few differences in factor costs Substantial trade barriers Location externalities not important in industry Volatile exchange rates Low fixed costs Low minimum efficient scale Flexible manufacturing not available Low value-to-weight ratio Doesn't serve universal needs

_____ coordination refers to the integrated and coordinated decisions of key global supply chain activities.

Global supply chain

The inventory model used to decrease costs by having inventory arrive at a manufacturing plant only when it is needed is called ______ inventory.

JIT

______ is an inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs. This method requires producers to forecast demand accurately.

JIT

A company that engages in international purchasing, but does so in a reactive and uncoordinated way, is at which level of global purchasing?

Level II

A company that engages in global purchasing activities that are integrated across worldwide locations and functional groups is at which level of global purchasing?

Level V

What term is given to the activities that encompass the movement of physical materials through the supply chain?

Logistics

Factors that favor a concentrated production strategy

Substantial differences in political economy Substantial differences in culture Substantial differences in factor costs Few trade barriers Location externalities important in industry Stable exchange rates High fixed costs High minimum efficient scale Flexible manufacturing available High value-to-weight ratio Serves universal needs

production

The process of creating goods and services

Using a web-or ______-based information system allows a company to speed up production, if necessary, by flying in key parts to the facility.

cloud

When flexible manufacturing technologies are available, this bolsters the argument for _____ production configurations.

concentrated

A(n) ______ factory has its own infrastructure when it comes to development, engineering, and production, and often competes with the firm's home factories for testing new ideas and products.

contributor

What are the three broad groups of factors that a company should consider when making decisions on where to produce its products?

country factors, technological factors, production factors

When trade barriers are high, fixed costs are low, important exchange rates are unstable, and the value-to-weight ratio is low, a ______ production configuration is preferred.

decentralized

The portion of the supply chain from the production facility to the end-consumer is the ______ supply chain.

downstream

Artisan Inc. needs to find a company that will store its products and when requested provide customization -- then ship the products to the final customer. What type of facility can help Artisan Inc. with this?

global distribution center

The concept that valuable knowledge does not just reside in a firm's domestic operations but can be found in foreign subsidiaries is known as ______.

global learning

A source factory ______ than an offshore factory.

has a more significant strategic role

One drawback to basing production in a foreign location is the potential for poor product quality. This is an example of a(n) ___________ cost of foreign production.

hidden

Examples of hidden costs of foreign-based production

high employee turnover, shoddy workmanship, poor product quality, and low productivity

What two factors are critically important to the success of global supply chain coordination?

integration and coordination

Flexible manufacturing technology is also referred to as ______ production.

lean

When a firm takes advantage of favorable economic, political, and cultural conditions when identifying a site for manufacturing activities, the benefits it can receive are called ______ economies.

location

Kalee works for Wolf Furniture Corp. and it is her job to control the inventory of raw materials, component parts, and products used in the manufacturing of the company's office furniture line. Kalee works in _____.

logistics

Web-based information systems can improve the ______ function by better tracking component parts, optimizing production schedules, and by providing good information about the company's supply chain.

logistics

Supply chain management refers to the integration and coordination of what four activities from raw material to the end-customer?

logistics, purchasing, operations, and market channel activities

When a company makes a make-or-buy decision, the strategic level is typically focused on the ______-term while the operational level is more focused on the ______-term.

long; short

Whether a firm should perform a value creation activity themselves or outsource it is called the _____ decision.

make-or-buy

The term used to describe a company's ability to produce a customized product at low cost is ______.

mass customization

When a company uses flexible manufacturing technology to develop a low cost, customized product, it is using the process of

mass customization

SInce unit costs decrease as plant output increases, a ______ of output is necessary for a plant to realize all major plant-level scale economies.

minimum efficient scale

The ______ is the smallest amount of production a company can achieve while still taking full advantage of economies of scale with regards to supplies and costs.

minimum efficient scale

A(n) _______ factory is developed and set up to assemble or manufacture products in a country where labor and/or raw materials are cheaper, for export and/or eventual import into the manufacturer's home country.

offshore

Manuel works on the assembly line at a factory in Mexico that produces component parts for a Japanese automaker. The factory is not involved in any decisions on the automobiles but is simply designed for parts production. This is an example of a(n) _____ factory.

offshore

What are three strategic roles a foreign factory might have?

offshore source server contributor outpost lead

All the activities involved in creating a product are known as _____.

production

When discussing global supply chains, _____ is/are sometimes referred to as manufacturing or operations.

production

A business uses the _____ function to obtain raw materials it needs to manufacture goods.

purchasing

The process of a business or organization attempting to acquire goods or services to accomplish the goals of its enterprise is called

purchasing

Flexible manufacturing technology is also referred to as ______ production.

reduce setup times, increase utilization of machines through better scheduling, and improve quality control

A factory established to overcome tangible and intangible barriers in the global market place which supplies specific country or regional markets around the world is a(n) ______ factory.

server

One reason a company would use a(n) _____ factory is that it can minimize the costs that would be necessary if the production facility were further away from its customers.

server

Which type of factory is used and treated the same as any factory in a global firm's home country?

source

True or false: A global distribution center is used to store quantities and assortments of products and allow for customization of those products.

true

According to the text, the two keys to interorganizational relationships are:

trust and commitment

The portion of the supply chain from raw materials to the production facility is the ______ supply chain.

upstream