Podcast
Questions and Answers
What are the main production issues for firms?
What are the main production issues for firms?
What program do most firms use to improve quality?
What program do most firms use to improve quality?
Six Sigma
Production should always be concentrated in a single location.
Production should always be concentrated in a single location.
False
What factors should firms consider when deciding where to locate production?
What factors should firms consider when deciding where to locate production?
Signup and view all the answers
The role of ________ is crucial in materials management.
The role of ________ is crucial in materials management.
Signup and view all the answers
What is a major drawback of Just-In-Time (JIT) inventory systems?
What is a major drawback of Just-In-Time (JIT) inventory systems?
Signup and view all the answers
Which of the following is true about flexible manufacturing?
Which of the following is true about flexible manufacturing?
Signup and view all the answers
What is the purpose of Electronic Data Interchange (EDI)?
What is the purpose of Electronic Data Interchange (EDI)?
Signup and view all the answers
What are the advantages of outsourcing?
What are the advantages of outsourcing?
Signup and view all the answers
What is one key factor affecting the attractiveness of a country as a production location?
What is one key factor affecting the attractiveness of a country as a production location?
Signup and view all the answers
Study Notes
Main Production Issues for Firms
- Key decisions include location of production, long-term role of foreign sites, ownership vs. outsourcing, management of supply chains, and logistics management.
- Efficient production and logistics can lower costs and enhance customer service.
- Quality improvements often utilize the Six Sigma program, originating from Total Quality Management (TQM).
Production Location Considerations
- Production should be responsive to logistics and customer demand.
- Important factors:
- Country Factors: Economic, political, and cultural conditions that impact production efficiency.
- Technological Factors: Fixed costs, minimum efficient scale, and flexibility of manufacturing technology.
- Product Factors: Value-to-weight ratio and universality of product needs.
Country Factors
- Assess skilled labor availability, trade barriers, exchange rate expectations, transportation costs, and regulations affecting foreign direct investment (FDI).
- Future currency expectations can influence production location effectiveness.
Technological Factors
- High fixed costs favor centralized production; low fixed costs may allow multiple locations.
- High minimum efficient scale necessitates centralized production, while low scale permits diverse manufacturing to meet local demand.
- Flexible manufacturing technology enables customization and efficient production, allowing rapid responses to market needs.
Product Factors
- High value-to-weight ratio products benefit from centralized production; low ratios encourage multiple production sites.
- Universal need products allow for centralized manufacturing due to reduced necessity for local responsiveness.
Strategies for Locating Production Facilities
- Concentration: Centralizing production in optimal locations for cost efficiency through economies of scale.
- Decentralization: Establishing regional facilities closer to markets for quicker response to local demand.
Strategic Role of Foreign Factories
- Foreign factories can evolve from low-cost operations to centers of advanced design capabilities.
- Key is adapting to changes in regulations and enhancing production facilities to maintain market competitiveness.
Make-or-Buy Decisions
- Firms face critical choices between in-house production (make) vs. outsourcing (buy).
- Key advantages of 'make':
- Vertical integration provides cost efficiency for specific components.
- Protects proprietary technology and facilitates coordination.
- Advantages of 'buy' include flexibility, cost reduction, and the potential to capture international orders.
Managing a Global Supply Chain
- Efficient logistics are vital for cost management and meeting customer demands.
- Just-In-Time (JIT) inventory systems minimize holding costs and improve quality control but risk stock shortages during unexpected demand surges.
Role of Information Technology
- Web-based information systems enhance production scheduling and materials management.
- Electronic Data Interchange (EDI) allows real-time tracking, communication, and reduces paperwork, facilitating global supply chain efficiency.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Related Documents
Description
This quiz explores key issues related to global production, outsourcing, and logistics. It examines critical questions that international firms must consider, from production location to supply chain management. Test your understanding of the strategic roles of foreign production sites and the decision-making processes involved in outsourcing.
