Operation Management; Chapter 2
Question 2: Describe how an organization's mission and strategy have different purposes.
The purpose of an organization's mission is what it will contribute to society. The mission states the reason for an organization's existence and once a mission has been decided, each department within the firm makes a mission of its own based off of the organization's mission.
What theory implies that you should allow another firm to perform work activities for your company can do it more productively than you can? (a)Theory of comparative advantage (b) theory of offshoring
Theory of comparative advantage
Outsourcing manufacturing is also known as a. license manufacturing b. sublease manufacturing c. concurrent manufacturing d. hollow manufacturing e. contract manufacturing
e. contract manufacturing
Which of the following is LEAST likely to be a low cost leadership competitive advantage? (a) effective capacity use (b) low overhead
effective capacity use
The term maquiladora is most synonymous with:
free trade zones in Mexico
which of the following is true of maquilladora? (a) the assess tariffs only on the value-added work done (b) they originated in CHina
the assess tariffs only on the value-added work done
Which of the following activities takes place most immediately once the mission has been developed?
(a) The functional areas develop their supporting missions
Which of the following statements best characteristics delivery reliability? (a) a company that always delivers at the promised time
(a) a company that always delivers at the promised time
A strategy is a(n): (a) action plan to achieve the mission (b) broad statement of purpose (c) simulation used to test various product line options (d) plan for cost reduction (e) set of opportunities in the marketplace
(a) action plan to achieve the mission
A firm can effectively use its operations function to yield competitive all of the following EXEPT: (a) Setting equipment utilisation goals below the industry average (b) constant innovation of new product (c) speed delivery (d) maintaining a variety of product options (e) customisation of the product
(a) setting equipment utilisation below the industry
Which of the following statements is true? (a) corporate strategy is shaped by functional strategies (b) Functional strategies are shaped by corporate strategy
(b) Functional strategies are shaped by corporate strategy
The ability of an organisation to produce goods or service that have some uniqueness in their characteristics is: (a) competing on quality (b) competing on differentiation
(b) competing on differentiation
The ability of an organisation to produce services that, by utilising the consumer's five senses, have some uniqueness in their characteristics is: (a) time-based competition (b)experience differentiation
(b) experience differentiation
Which of the following is not an advantage of outsourcing? (a) gaining outside expertise (b) outsourcing core competencies (c) cost savings
(b) outsourcing core competencies
Outsourcing is simply an extension of the long-standing practice of: (a) importing (b) subcontracting (c) exporting (d) postponement (e) e-procurement
(b) subcontracting
Which of the international operations strategies involves low cost reductions and low local responsiveness? (a) global stategy (b) transnational strategy
(b) transnational strategy
The acronym MNC stands for (a) Mexican National Committee (b) Maritime Navigation Company (c) Multinational Corporation (d) Maytag-Nestle Corporation (e) Maquilladora Negates Competition
(c) Multinational Corporation
Standardization is an appropriate strategy in which stage of the product life cycle? (a) growth (B) decline (c) maturity (d) introduction (e) retirement
(c) maturity
Which of the international operations strategies uses import?export or licensing of existing products? (a) international strategy (b)transnational strategy (c) multi domestic strategy
(c) multi domestic strategy
What is the practice of transferring a firm's activities that have traditionally been internal to external suppliers? (a) farshoring (b) offshoring (c) outsourcing
(c) outsourcing
Which of the international operations strategies involves high cost reduction and high local responsiveness? (a) international strategy (b) global strategy (c) transnational strategy (d) multi domestic strategy (e) worldwide strategy
(c) transnational strategy
Response-based competitive advantage ca be: (a) reliable response (b) flexible response (c) quick response (d) all of the above (e) none of the above
(d) all of the above
Cost minimisation is an appropriate strategy in which stage of the product life cycle? (a) growth (b) adolescence (c) retirement (d) decline (e) introduction
(d) decline
Experience differentiation: (a) uses only the consumer's sense of vision and sound (b) attempts to make the service experience different for every single customer (c) isolates the consumer from the delivery of a service (d) is an extension of product differentiation in the service sector (e) keeps consumers from becoming active participants in the service
(d) is an extension of product differentiation in the service sector
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 these are elements of experience differentiation.
(e) All of these are elements of experience differentiation.
An SWOT analysis determines: (a) External strengths and weakness and external opportunities and threats (b) Internal strengths and weaknesses and internal opportunities and threats (c) External strengths and weaknesses and internal opportunities and threats (d) Internal strengths and opportunities and external weaknesses and threats (e) Internal strengths and weaknesses and external opportunities and threats
(e) Internal strengths and weaknesses and external opportunities and threats
Before establishing and implementing strategy, a resources view ensure that which of the following resources are available? (a) physical (b) financial (c) technological (d) human (e) all of the above
(e) all of the above
Cost cutting in international; operations can take place because of: a. lower taxes and tariffs b. lower wage scales c. lower indirect labor costs d. less stringent regulations e. all of the above
(e) all of the above
Multinational organisations can shop from country and cut costs through: (a) less stringent regulations (b) lower indirect costs (c) lower wage scales (d) lower taxes and tariffs (e) all of the above
(e) all of the above
Porter's Five Forces Model contains which of the following? (a) potential entrants (b) immediate rivals (c) suppliers (d) customers (e) all of the above
(e) all of the above
Which of the following represents a reason for globalising operations? (a) to attract and retain global talent (b) to expand a product's life cycle (c) to improve the supply chain (d) to improve operations (e) all of the above
(e) all of the above
According to the authors which of the following concept allows firms to achieve their missions? (a) distinctive competency, cost leadership and experience (b) differentiation, distinctive competency, quality leadership, and capacity (c) differentiation, quality leadership, and capacity (d) productivity, efficiency, and quality leadership (e) differentiation, cost leadership, and response
(e) differentiation, cost leadership, and response
Question 4: List and Discuss three primary ways to gain a competitive advantage-
1. Differentiation- be better, or at least different than your competition. What makes your product stand out? How can you market it? Can be thought of as going beyond both physical characteristics and service attributes to encompass everything about the product or service that influences the value that the customers derive from it. 2. Cost Leadership- more cost efficient (cheaper) than your competition. Some people strictly purchase a product based off of its affordability. 3. Response- Response can be thought of as including the entire range of values related to timely product development and delivery, as well as reliable scheduling and flexible performance.
Which of the following is an example of competing on the basis of differentiation? (a)A firm offers more reliable products than its competitors do. (b) a firm advertises more than it competitors do
A firm offers more reliable products than its competitors do.
Which of the following is the best example of competing on low-cost leadership? (a) A firm produces it product with less raw material waste than its competitors do. (b) A firm advertises more than competitors do.
A firm produces it product with less raw material waste than its competitors do.
The fundamental purpose of an organisation's mission statement is to:
define the organization's purpose in society
Questin 1: The textbook identifies and explains six reasons domestic business operations may decide to internationalize operations.
Improve supply chain: this can be done by locating facilities in countries were unique resources; such as human resource expertise, low-cost labor, or raw material, are available. An example mentioned in the book is moving the world athletic shoe production from South Korea to China due to availability of low-cost labor and production competence. Reduce costs and exchange rate risk: to reduce direct and indirect costs, as well as risks associated with exchange rates, companies tend to shift to countries with less stringent government regulations on a wide variety of operation practices such as environmental control, health and safety. Improve operations: international operations help companies improve their understanding of management innovations in different countries. Understand Markets: International firms learn about opportunities for new products and services due to their interaction with foreign customers, suppliers and other competitive businesses. Attract and retain global talent. By offering more employment opportunities, Global organizations can attract and retain good employees.
Which of the following statements is most accurate?' (a)Outsourcing is a relatively risk-free activity (b) more than 90% of outsourcing agreements succeed
Outsourcing is a relatively risk-free activity
Which of the following is an example of competing on quick response?
a firm offers more reliable products than its competitors do.
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. multidomestic strategy
Porter's Five forces model is used to evaluate competition based on which 5 aspects? (a) immediate rivals, potential entrants, consumers, suppliers, substitute products (b) cost, legal regulaitions, advertising effectiveness; potential entrants, and immediate rivals
immediate rivals, potential entrants, consumers, suppliers, substitute products
With reference to cultural and ethical issue, the world trade Organization has: (a) made progress in providing equal protection of intellectual property among nations (b) eliminated bribery
made progress in providing equal protection of intellectual property among nations
The purpose of NAFTA is to :
phase out all trade and tariff barriers between the United States, Canada, and Mexico
Which of the following does NOT represent a valid reason for globalizing operations?
reduce responsiveness
