Chapter 18 Global Manufacturing and Supply-Chain Management PDF

International Business, 17e, Global Edition (Daniels) Chapter 18 Global Manufacturing and Supply-Chain Management 1) Which term refers to the network that links together the different aspects of the value chain and coordinates materials, information, and funds from the initial raw-material supplier...

International Business, 17e, Global Edition (Daniels) Chapter 18 Global Manufacturing and Supply-Chain Management 1) Which term refers to the network that links together the different aspects of the value chain and coordinates materials, information, and funds from the initial raw-material supplier to the ultimate customer? A) logistics strategy information system B) materials management device C) customer service D) supply chain Answer: D Diff: 1 Skill: Concept Objective: 18-1 Define what is meant by global supply-chain management AACSB: Application of knowledge 2) Sourcing and procuring refer to ________. A) supply chain management B) production management C) service operations management D) integration management Answer: A Diff: 1 Skill: Concept Objective: 18-1 Define what is meant by global supply-chain management AACSB: Application of knowledge 3) Jordan, a manager at an MNE, is responsible for supervising the transportation and storage of materials and final goods. Jordan is most likely a manager involved with ________. A) quality control B) offshoring C) logistics D) inventory management Answer: C Diff: 2 Skill: Application Objective: 18-1 Define what is meant by global supply-chain management AACSB: Application of knowledge 1 Copyright © 2022 Pearson Education, Ltd. 4) Logistics is also known as ________. A) the internal supply chain B) value added management C) internal logistics D) material management Answer: D Diff: 1 Skill: Concept Objective: 18-1 Define what is meant by global supply-chain management AACSB: Application of knowledge 5) Which of the following BEST describes a major difference between supply chain management and logistics? A) Supply chain management involves handling suppliers and customers. B) Logistics involves longer distances and international distribution networks. C) Supply chain management focuses on transportation and the storage of goods. D) Logistics only encompasses the outbound flow of products and materials. Answer: A Diff: 2 Skill: Concept Objective: 18-1 Define what is meant by global supply-chain management AACSB: Application of knowledge 6) In a global supply chain, suppliers must be part of the manufacturer's organizational structure. Answer: FALSE Diff: 1 Skill: Concept Objective: 18-1 Define what is meant by global supply-chain management AACSB: Application of knowledge 7) Logistics is also known as materials management. Answer: TRUE Diff: 1 Skill: Concept Objective: 18-1 Define what is meant by global supply-chain management AACSB: Application of knowledge 8) Supply-chain management refers to activities in the value chain that occur inside the company, whereas logistics management refers to external activities. Answer: FALSE Diff: 1 Skill: Concept Objective: 18-1 Define what is meant by global supply-chain management AACSB: Application of knowledge 2 Copyright © 2022 Pearson Education, Ltd. 9) What is a supply chain? How does a supply chain differ from materials management and logistics? Answer: A company's supply chain encompasses the coordination of materials, information, and funds from the initial raw material supplier to the ultimate customer. Logistics (also called materials management) is an important dimension of the supply chain. Logistics is that part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers' requirements. Materials management is inbound logistics or the movement and management of materials and products from purchasing through production. The difference between supply chain management and logistics is one of degree. Logistics focuses much more on the transportation and storage of materials and final goods, whereas supply chain management extends beyond that to include the management of supplier and customer relations. Diff: 3 Skill: Critical Thinking Objective: 18-1 Define what is meant by global supply-chain management AACSB: Application of knowledge 10) In the context of manufacturing strategy, the degree of consistency between the foreign investment decision and the company's competitive strategy is known as ________. A) control B) coordination C) compatibility D) configuration Answer: C Diff: 1 Skill: Concept Objective: 18-2 Describe the different facets of global operations strategies AACSB: Application of knowledge 11) Burron Manufacturing is striving to improve its performance reliability, speed of delivery, and product reliability. Burron is most likely focusing on a(n) ________ strategy. A) flexibility B) quality C) dependability D) innovation Answer: B Diff: 2 Skill: Application Objective: 18-2 Describe the different facets of global operations strategies AACSB: Application of knowledge 3 Copyright © 2022 Pearson Education, Ltd. 12) The ability of the production process to make different kinds of products and to adjust the volume of output is known as ________. A) quality control B) dependability C) flexibility D) innovation Answer: C Diff: 1 Skill: Concept Objective: 18-2 Describe the different facets of global operations strategies AACSB: Application of knowledge 13) The need for greater efficiency, which is closely linked to ________, forces MNEs to align their overall strategy with operations. A) cost reduction B) quality control C) higher costs D) flexibility Answer: A Diff: 2 Skill: Concept Objective: 18-2 Describe the different facets of global operations strategies AACSB: Application of knowledge 14) When GM moved some of its manufacturing operations to Mexico to be closer to the American market, they were doing what's known as ________. A) coordination B) cost-benefit analysis C) offshoring D) nearshoring Answer: D Diff: 1 Skill: Concept Objective: 18-2 Describe the different facets of global operations strategies AACSB: Application of knowledge 15) The relocation of a business process or entire manufacturing facility to a foreign country is known as ________. A) offshoring B) captive sourcing C) outsourcing D) subsidizing Answer: A Diff: 1 Skill: Concept Objective: 18-2 Describe the different facets of global operations strategies AACSB: Application of knowledge 4 Copyright © 2022 Pearson Education, Ltd. 16) Bocce Shoes, an Italian firm, set up a production facility in Vietnam to manufacture the firm's line of athletic shoes. Bocce is most likely using a(n) ________ strategy. A) dependability B) efficiency/cost C) innovation D) flexibility Answer: B Diff: 2 Skill: Application Objective: 18-2 Describe the different facets of global operations strategies AACSB: Application of knowledge 17) When a company has improved its operations efficiency so much that it decided to move back to its home country, this is called ________. A) nearshoring B) offshoring C) outsourcing D) onshoring Answer: D Diff: 2 Skill: Application Objective: 18-2 Describe the different facets of global operations strategies AACSB: Application of knowledge 18) Which of the following is NOT one of the three basic configurations that MNEs consider when establishing a global manufacturing strategy? A) regional manufacturing B) multicultural manufacturing C) multidomestic manufacturing D) centralized manufacturing Answer: B Diff: 2 Skill: Concept Objective: 18-2 Describe the different facets of global operations strategies AACSB: Application of knowledge 5 Copyright © 2022 Pearson Education, Ltd. 19) Ronald Enterprises, an American company, has a manufacturing facility in France in order to serve customers throughout Europe. Ronald is most likely using a ________ manufacturing strategy. A) regional B) global C) centralized D) country-specific Answer: A Diff: 2 Skill: Application Objective: 18-2 Describe the different facets of global operations strategies AACSB: Application of knowledge 20) A multidomestic configuration is most important when ________. A) demand in individual countries decreases significantly B) exporting is the company's main strategy C) demand in individual countries becomes significant D) low-priced, standardized products are available Answer: C Diff: 2 Skill: Concept Objective: 18-2 Describe the different facets of global operations strategies AACSB: Application of knowledge 21) Deciding whether to establish production facilities in many different countries or in one centralized location is called ________. A) regional manufacturing B) multi-domestic manufacturing C) centralized manufacturing D) offshore manufacturing Answer: C Diff: 1 Skill: Concept Objective: 18-2 Describe the different facets of global operations strategies AACSB: Application of knowledge 6 Copyright © 2022 Pearson Education, Ltd. 22) Once a firm has determined what its manufacturing configuration will be, and has coordinated its supply chain, it must create a(n) ________ system to ensure that the firm's strategies are carried out. A) multidomestic B) control C) offshore D) centralized Answer: B Diff: 1 Skill: Concept Objective: 18-2 Describe the different facets of global operations strategies AACSB: Application of knowledge 23) ________ is the linking or integrating of activities into a unified system. A) Control B) Coordination C) Configuration D) Compatibility Answer: B Diff: 1 Skill: Concept Objective: 18-2 Describe the different facets of global operations strategies AACSB: Application of knowledge 24) ________ is the measuring of performance so that companies can respond appropriately to changing conditions. A) Coordination B) Configuration C) Control D) Compatibility Answer: C Diff: 1 Skill: Concept Objective: 18-2 Describe the different facets of global operations strategies AACSB: Application of knowledge 25) The success of a global manufacturing strategy depends on compatibility, configuration, coordination, and control. Answer: TRUE Diff: 1 Skill: Concept Objective: 18-2 Describe the different facets of global operations strategies AACSB: Application of knowledge 7 Copyright © 2022 Pearson Education, Ltd. 26) Configuration is the linking or integrating of activities into a unified system. Answer: FALSE Diff: 1 Skill: Concept Objective: 18-2 Describe the different facets of global operations strategies AACSB: Application of knowledge 27) Strategies to reduce operational costs are linked to efficiency. Answer: TRUE Diff: 1 Skill: Concept Objective: 18-2 Describe the different facets of global operations strategies AACSB: Application of knowledge 28) Innovation is the ability of the production process to make different kinds of products and to adjust the volume of output. Answer: FALSE Diff: 2 Skill: Concept Objective: 18-2 Describe the different facets of global operations strategies AACSB: Application of knowledge 29) Nearshoring implies moving the supply chain closer to the home market. Answer: TRUE Diff: 1 Skill: Concept Objective: 18-2 Describe the different facets of global operations strategies AACSB: Application of knowledge 30) Offshore manufacturing is attractive because it offers high labor costs, cheap materials and components, and proximity to markets. Answer: FALSE Diff: 2 Skill: Concept Objective: 18-2 Describe the different facets of global operations strategies AACSB: Application of knowledge 8 Copyright © 2022 Pearson Education, Ltd. 31) What are the roles of compatibility, configuration, coordination, and control in a global manufacturing strategy? Describe each of these four factors. Answer: Manufacturing is just one piece in supply chain strategy. It is preceded by sourcing inputs from suppliers and followed by distribution of the final product to consumers. The success of a global manufacturing strategy depends on four key factors: compatibility, configuration, coordination, and control. Compatibility is the degree of consistency between FDI decisions and a company's competitive strategy. Some of the strategies managers must consider include cost-minimization strategies, dependability, quality, flexibility, and innovation. Managers must also determine the configuration of manufacturing facilities. MNEs consider three basic configurations: centralized manufacturing, manufacturing facilities in specific regions, and multidomestic facilities. Coordination is the linking or integrating of activities into a unified system. The activities include everything along the global supply chain from purchasing to warehousing to shipment. Control is the measurement of performance so that companies can respond appropriately to changing conditions. Another aspect of control structure is the organizational structure. Diff: 3 Skill: Synthesis Objective: 18-2 Describe the different facets of global operations strategies AACSB: Reflective thinking 32) Why are the concepts of dependability and quality important when developing a global manufacturing strategy? Answer: Many factors besides cost must also be taken into consideration. The growing customer demand for dependability and prompt deliveries has caused companies such as Dell Computer to locate plants closer to customers rather than in low-wage areas. When a longer supply chain risks late deliveries of components or finished goods, shortening the distance can improve dependability. Quality is a major issue as well. As long as foreign operations ensure high quality and contribute to innovation, companies will keep setting up operations abroad. However, after a decade-long trend of sourcing in low-cost countries like China, Japanese firms such as Honda, Canon, and Sharp are now relocating production back in their home country. These MNEs have been responding to the need for access to Japan's pool of skilled workers, as well as its proximity to engineers, parts suppliers, and decision makers. They believe that to ensure innovation and quality, close communication between product development and manufacturing is essential. Diff: 3 Skill: Synthesis Objective: 18-2 Describe the different facets of global operations strategies AACSB: Reflective thinking 9 Copyright © 2022 Pearson Education, Ltd. 33) ________ is the process of a firm having inputs supplied to it for the production process. A) Sourcing B) Subcontracting C) External production D) Offshoring Answer: A Diff: 1 Skill: Concept Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 34) Alta Designs is considering the idea of global sourcing. What would be the most likely result for Alta Designs? A) gain access to more domestic markets B) gain access to more domestic products C) lower costs and improve quality D) shorten lengthy supply lines Answer: C Diff: 2 Skill: Application Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 35) All of the following tend to be more expensive when sourcing abroad, EXCEPT ________. A) transportation costs B) inventory holding costs C) brokers and agents fees D) labor rates Answer: D Diff: 2 Skill: Concept Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 10 Copyright © 2022 Pearson Education, Ltd. 36) ACE Computers established an assembly operation in Malaysia so that it would be close to its key suppliers. ACE is most likely engaging in ________. A) industrial clustering B) horizontal sourcing C) zero sourcing D) offshoring Answer: A Diff: 2 Skill: Application Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 37) Which of the following would most likely be reduced by vertical integration? A) export tariffs B) component prices C) product returns D) transaction costs Answer: D Diff: 2 Skill: Concept Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 38) Rapid Technologies owns its entire supplier network, which means that the firm most likely uses ________. A) industrial clustering B) competitive sharing C) vertical integration D) global outsourcing Answer: C Diff: 1 Skill: Application Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 11 Copyright © 2022 Pearson Education, Ltd. 39) Japanese ________ are groups of independent companies that work together to manage the flow of goods and services along an entire value chain. A) chaebol B) keiretsus C) sigmas D) kaizen Answer: B Diff: 1 Skill: Concept Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 40) In deciding whether to make or buy, MNEs should focus on those parts that are ________ to the product and that they are ________ at making. A) critical; distinctively good B) incremental; distinctively good C) critical; marginally good D) incremental; marginally good Answer: A Diff: 2 Skill: Concept Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 41) Which of the following is one of the biggest barriers to expanding the use of outsourcing? A) long-term independence from an external organization B) loss of operational control C) cultural opportunities in the organization D) language barriers Answer: B Diff: 2 Skill: Concept Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 12 Copyright © 2022 Pearson Education, Ltd. 42) Which of the following statements is true of outsourcing? A) It reduces economic risk by facilitating the purchase of large insurance policies. B) It reduces production risk by eliminating delays in the timely receipt of needed parts. C) It reduces costs and enables companies to be closer to markets. D) It reduces currency risk by allowing the company to invest the home currency on in-house production facilities. Answer: C Diff: 2 Skill: Concept Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 43) Which of the following should an MNE most likely consider in a make-or-buy decision? A) organizational hierarchy B) supplier capabilities C) employee morale D) niche markets Answer: B Diff: 2 Skill: Concept Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 44) A current sourcing dilemma that some companies face is whether or not they should ________. A) use outsourcing as a reward to underperforming employees B) make critical components for which they have competencies C) outsource innovative processes D) measure supplier performance Answer: C Diff: 2 Skill: Concept Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 13 Copyright © 2022 Pearson Education, Ltd. 45) Computer companies buying hardware components from component-makers, assembling them in their own facilities, and selling completed systems to consumers and businesses is an example of ________. A) telecommuting B) franchising C) outsourcing D) licensing Answer: C Diff: 1 Skill: Concept Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 46) Which of the following is one of the four phases of purchasing globalization? A) foreign buying as a part of procurement strategy B) complete rejection of domestic purchasing C) foreign buying based on want D) global purchasing only Answer: A Diff: 2 Skill: Concept Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 47) Which of the following is a sourcing strategy in the global context? A) use only local purchasing agents B) establish local purchasing offices C) purchase only from global suppliers D) assign domestic buyers for international purchasing Answer: D Diff: 2 Skill: Concept Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 48) When firms estimate the costs of outsourcing to low-wage countries, they often overlook problems such as long distances. Answer: TRUE Diff: 2 Skill: Concept Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 14 Copyright © 2022 Pearson Education, Ltd. 49) Onshoring is also knows as reshoring. Answer: TRUE Diff: 1 Skill: Concept Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 50) Japanese keiretsus are groups of independent companies that work together to manage the flow of goods and services along the entire value chain. Answer: TRUE Diff: 1 Skill: Concept Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 51) Utilizing vertical integration is an alternative way to reduce transportation and transaction costs. Answer: FALSE Diff: 1 Skill: Concept Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 52) If MNEs outsource parts instead of sourcing them from internal production, they need to determine the degree of involvement with suppliers. Answer: TRUE Diff: 1 Skill: Concept Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 53) The purchasing agent is the link between a company's outsourcing decision and its supplier relationships. Answer: TRUE Diff: 1 Skill: Concept Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 15 Copyright © 2022 Pearson Education, Ltd. 54) Conflict minerals are certain minerals that come from warring areas, principally the eastern provinces of the Democratic Republic of the Congo, that generate revenues to fund conflicts. Answer: TRUE Diff: 1 Skill: Concept Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 55) Contract manufacturers are companies that enter into a contract with the hiring company, to assume the entire manufacturing process. Answer: TRUE Diff: 1 Skill: Concept Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 56) A comprehensive global sourcing strategy should include inventory management. Answer: TRUE Diff: 1 Skill: Concept Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 57) Sourcing in the home country enables a company to avoid numerous problems associated with global sourcing. Answer: TRUE Diff: 1 Skill: Concept Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 58) A company would most likely outsource abroad in order to gain access to more domestic products. Answer: FALSE Diff: 1 Skill: Concept Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 16 Copyright © 2022 Pearson Education, Ltd. 59) Keiretsus is one of the two major configurations of sourcing. Answer: FALSE Diff: 2 Skill: Concept Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 60) Vertical integration occurs when the company owns the entire supplier network or at least a significant part of it. Answer: TRUE Diff: 1 Skill: Concept Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 61) The make-or-buy decision applies only to domestic firms. Answer: FALSE Diff: 1 Skill: Concept Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 62) A company may use outsourcing as an implied threat to underperforming employees. Answer: TRUE Diff: 2 Skill: Concept Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 63) Describe total quality management. Answer: The Japanese approach to quality is total quality management. This process stresses three principles: customer satisfaction (which is the center of the process), employee involvement, and continuous improvements in quality. The goal of TQM is to eliminate all defects. It is a process of continuous improvement at every level of the organization. TQM implies that the company is doing everything it can to achieve quality at all stages of the process, from customer demands to product design to engineering. This continuous improvement process is known as kaizen, which means identifying problems and enlisting employees at all levels of the organization to help eliminate the problems. Diff: 3 Skill: Critical Thinking Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Reflective thinking 17 Copyright © 2022 Pearson Education, Ltd. 64) What are the advantages and disadvantages of global and domestic sourcing? What role does quality play in deciding between global and domestic sourcing? Answer: Sourcing in the home country enables companies to avoid numerous problems, including those connected with language differences, long distances and lengthy supply lines, exchange-rate fluctuations, and other problems. However, for many companies, domestic sources may be unavailable or may be more expensive than foreign sources. Companies outsource abroad to lower costs and improve quality, among other reasons. But in some ways, global sourcing is more expensive than domestic sourcing. For example, transportation and communications are more expensive, and companies may have to pay brokers and agent fees. Given the longer length of supply lines, it often takes more time to get components from abroad, and lead times are less certain. As long as foreign operations ensure high quality and contribute to innovation, companies will keep setting up operations abroad. However, after a decade-long trend of sourcing in low-cost countries like China, Japanese firms such as Honda, Canon, and Sharp are now relocating production back in their home country. These MNEs have been responding to the need for access to Japan's pool of skilled workers, as well as its proximity to engineers, parts suppliers, and decision makers. They believe that to ensure innovation and quality, close communication between product development and manufacturing is essential. Diff: 3 Skill: Synthesis Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Application of knowledge 65) What has been the influence of Japan on supply chain management? In your answer, discuss the concepts of industrial clustering and quality. Answer: Japanese keiretsus are groups of independent companies that work together to manage the flow of goods and services along the entire value chain. Toyota's highly coordinated supplier network is among the most successful and well known of the Japanese keiretsus and a good example of industrial clustering. It borders on vertical integration, because parts suppliers tend to set up shop close to Toyota's assembly operations, and Toyota usually has an ownership interest in them. The Japanese approach to quality is total quality management (TQM), a process that stresses three principles: customer satisfaction, continuous improvement, and employee involvement. Its goal is to eliminate all defects. TQM often focuses on benchmarking world-class standards, product and service design, process design, and purchasing. Executives who have adopted the zero-defects philosophy of TQM claim that long-run production costs decline as defects decline. The continuous improvement process is also known as kaizen, which means identifying problems and enlisting employees at all levels to help eliminate problems. The key is to make continuous improvement a part of every employee's daily work. Diff: 3 Skill: Synthesis Objective: 18-3 Show how global sourcing is an important aspect of global supply-chain and operations management AACSB: Reflective thinking 18 Copyright © 2022 Pearson Education, Ltd. 66) Giga-Mart has an IT system that links the firm's suppliers, manufacturers, customers, and intermediaries. Giga-Mart most likely has a(n) ________, A) TQM (total quality management) B) EDI (electronic data interchange) C) JIT (just in time) D) ERP (enterprise resource planning) Answer: B Diff: 2 Skill: Application Objective: 18-4 Explain how information technology is used in global operations and supply-chain management AACSB: Integration of real-world business experiences 67) Medtronic uses an IT system that labels a product with an electronic tag to provide real-time information. Which of the following does Medtronic most likely use? A) RFID (radio frequency ID B) EDI (electronic date interchange) C) PTX (private technology exchange) D) ERP (enterprise resource planning) Answer: A Diff: 2 Skill: Application Objective: 18-4 Explain how information technology is used in global operations and supply-chain management AACSB: Integration of real-world business experiences 68) Amazon relies on the Internet to join together suppliers with companies and companies with customers. Amazon is most likely using ________. A) value-added networks B) e-commerce C) electronic data interchange D) private technology exchange Answer: B Diff: 1 Skill: Application Objective: 18-4 Explain how information technology is used in global operations and supply-chain management AACSB: Integration of real-world business experiences 19 Copyright © 2022 Pearson Education, Ltd. 69) Which of the following is most likely a true statement about using the Internet in supply chain management? A) The Internet is universally accessible. B) The Internet slows internal processes in a company. C) The Internet minimizes efficiency gains to a company's suppliers. D) The Internet prevents a deeper level of collaboration and communication. Answer: A Diff: 2 Skill: Concept Objective: 18-4 Explain how information technology is used in global operations and supply-chain management AACSB: Integration of real-world business experiences 70) What is the main information-related challenge in global supply chain management? A) The Internet is growing too quickly in emerging markets. B) Few countries are technologically advanced. C) The industrial equipment and food/agriculture industries use e-commerce more than industries such as defense and motor vehicles. D) Many emerging market networks cannot be managed through the Internet because of the lack of technology. Answer: D Diff: 3 Skill: Concept Objective: 18-4 Explain how information technology is used in global operations and supply-chain management AACSB: Integration of real-world business experiences 71) EDI is software that can link information flows from different parts of a business and from different geographic areas. Answer: FALSE Diff: 2 Skill: Concept Objective: 18-4 Explain how information technology is used in global operations and supply-chain management AACSB: Integration of real-world business experiences 72) Electronic data interchange (EDI) is an online collaboration model that brings manufacturers, distributors, value-added retailers, and customers together to execute trading transactions. Answer: FALSE Diff: 1 Skill: Concept Objective: 18-4 Explain how information technology is used in global operations and supply-chain management AACSB: Integration of real-world business experiences 20 Copyright © 2022 Pearson Education, Ltd. 73) Blockchain technology is the next wave of the utilization of technology in supply chain management linking together firms with their suppliers. Answer: TRUE Diff: 2 Skill: Concept Objective: 18-4 Explain how information technology is used in global operations and supply-chain management AACSB: Integration of real-world business experiences 74) Independent suppliers can connect to a company's intranet to help automate and organize delivery of components to that company. Answer: FALSE Diff: 2 Skill: Concept Objective: 18-4 Explain how information technology is used in global operations and supply-chain management AACSB: Integration of real-world business experiences 75) How has technology altered supply chain management? Discuss some of the available tools. Answer: Many companies use electronic data interchange (EDI) to link suppliers, manufacturers, customers, and intermediaries, especially in industries in which suppliers replenish in high volumes. In a global context, EDI has been used to link exporters with customs to facilitate quick processing. The next wave of technology affecting the global supply chain was the implementation of information technology packages known as enterprise resource planning (ERP). ERP is software that can link information flows from different parts of a business and from different geographic areas. Radio frequency ID (RFID) is a system that labels all products with an individual electronic tag that stores and transmits information about the product's origin, destination, and quantity. Electronic readers are used to scan the tags and download the information to a database that can be used with an ERP system. Another technological innovation is e-commerce, which is using the Internet to join together suppliers with companies and companies with customers. Some companies have established an extranet–the use of the Internet to link a company with outsiders. The new technology wave is private technology exchange (PTX), which is an online collaboration model that brings manufacturers, distributors, value-added resellers, and customers together to execute trading transactions and to share information about demand, production, availability, and more. Diff: 3 Skill: Critical Thinking Objective: 18-4 Explain how information technology is used in global operations and supply-chain management AACSB: Integration of real-world business experiences 21 Copyright © 2022 Pearson Education, Ltd. 76) Quality is defined as ________. A) meeting internal quality standards B) meeting the everyday low price expected by the customer C) meeting international quality standards, such as ISO 9000 D) meeting or exceeding the expectations of the customer Answer: D Diff: 1 Skill: Concept Objective: 18-5 Summarize how quality management is important in global operations and supply-chain management AACSB: Application of knowledge 77) Before the strong emphasis on zero defects, U.S. companies operated under the premise of ________, which allowed a level of poor quality with the assumption that service warranties and repair facilities would deal with product defects. A) Six Sigma B) ISO 9000 C) just-in-time inventory management (JIT) D) acceptable quality level (AQL) Answer: D Diff: 1 Skill: Concept Objective: 18-5 Summarize how quality management is important in global operations and supply-chain management AACSB: Application of knowledge 78) The Japanese approach to quality is total quality management (TQM), which stresses which of the following principles? A) employee involvement, commitment to international standards, and customer satisfaction B) customer satisfaction, continuous improvements, and warranties C) customer satisfaction, employee involvement, and continuous improvements D) employee involvement, continuous improvements, and commitment to international quality standards Answer: C Diff: 1 Skill: Concept Objective: 18-5 Summarize how quality management is important in global operations and supply-chain management AACSB: Application of knowledge 22 Copyright © 2022 Pearson Education, Ltd. 79) An element of total quality management (TQM) that focuses on continuous improvement by identifying problems and enlisting employees to help eliminate them is known as ________. A) kaizen B) Six Sigma C) kanban D) acceptable quality level (AQL) Answer: A Diff: 2 Skill: Concept Objective: 18-5 Summarize how quality management is important in global operations and supply-chain management AACSB: Application of knowledge 80) Fortis Manufacturing Systems uses a highly focused system of quality control that takes a statistical approach and scrutinizes the firm's entire production system. Fortis most likely uses ________. A) total quality management B) acceptable quality levels C) just-in-time processes D) Six Sigma processes Answer: D Diff: 2 Skill: Application Objective: 18-5 Summarize how quality management is important in global operations and supply-chain management AACSB: Application of knowledge 81) What are the three levels of quality standards? A) general, industry-specific, and company B) general, international, and domestic C) employee, company, and customer D) company, international, and industry-specific Answer: A Diff: 2 Skill: Concept Objective: 18-5 Summarize how quality management is important in global operations and supply-chain management AACSB: Application of knowledge 23 Copyright © 2022 Pearson Education, Ltd. 82) Which of the following is a set of universal standards for a globally accepted quality assurance system? A) just-in-time (JIT) inventory management B) Six Sigma C) total quality management (TQM) D) ISO 9000 Answer: D Diff: 2 Skill: Concept Objective: 18-5 Summarize how quality management is important in global operations and supply-chain management AACSB: Application of knowledge 83) At Fidelity Enterprises, raw materials, parts, and components are acquired from suppliers as they are needed in the manufacturing process so that Fidelity does not have to store large inventories. Which of the following does Fidelity most likely use? A) just-in-time (JIT) B) total quality management (TQM) C) six Sigma D) acceptable quality level (AQL) Answer: A Diff: 2 Skill: Application Objective: 18-5 Summarize how quality management is important in global operations and supply-chain management AACSB: Application of knowledge 84) Gibson Enterprises is an MNE that relies on just-in-time inventory management and lean manufacturing systems to optimize quality and efficiency. For the last few years, Gibson has used the same foreign sources for its raw materials. What is the most likely risk faced by Gibson because of foreign sourcing? A) quality of incoming inventory B) uncertainty of arriving parts C) few available suppliers D) high inventory costs Answer: B Diff: 2 Skill: Application Objective: 18-5 Summarize how quality management is important in global operations and supply-chain management AACSB: Application of knowledge 24 Copyright © 2022 Pearson Education, Ltd. 85) A kanban system is best described as a system that ________. A) uses special locations for storing imported inventory to avoid paying duties B) seeks to improve quality by setting a rigorous goal of zero defects C) electronically links together suppliers, customers, and intermediaries D) facilitates JIT by using cards to control the flow of production through a factory Answer: D Diff: 2 Skill: Concept Objective: 18-5 Summarize how quality management is important in global operations and supply-chain management AACSB: Application of knowledge 86) ________ is an idea perfected by Japanese manufacturers to ensure quality in products. A) Lean manufacturing B) Total quality management C) Zero defects D) Kaizen Answer: C Diff: 2 Skill: Concept Objective: 18-5 Summarize how quality management is important in global operations and supply-chain management AACSB: Application of knowledge 87) The three levels of quality standards are general, international, and industry-specific. Answer: FALSE Diff: 2 Skill: Concept Objective: 18-5 Summarize how quality management is important in global operations and supply-chain management AACSB: Application of knowledge 88) Lean manufacturing is a productive system whose focus is on optimizing processes through the philosophy of continual improvement. Answer: TRUE Diff: 2 Skill: Concept Objective: 18-5 Summarize how quality management is important in global operations and supply-chain management AACSB: Application of knowledge 25 Copyright © 2022 Pearson Education, Ltd. 89) Most U.S. companies have moved from a total quality management (TQM) approach to an acceptable quality level (AQL) approach. Answer: FALSE Diff: 2 Skill: Concept Objective: 18-5 Summarize how quality management is important in global operations and supply-chain management AACSB: Application of knowledge 90) Six Sigma is an effective statistical approach to quality management developed by Motorola and popularized by General Electric. Answer: TRUE Diff: 1 Skill: Concept Objective: 18-5 Summarize how quality management is important in global operations and supply-chain management AACSB: Application of knowledge 91) A comprehensive supply chain strategy should include good inventory management. Answer: TRUE Diff: 1 Skill: Concept Objective: 18-5 Summarize how quality management is important in global operations and supply-chain management AACSB: Application of knowledge 92) The use of JIT does not depend on the quality of incoming parts or the time of their arrival. Answer: FALSE Diff: 2 Skill: Concept Objective: 18-5 Summarize how quality management is important in global operations and supply-chain management AACSB: Application of knowledge 93) JIT is the process of sourcing raw materials and parts just as they are needed in the manufacturing process. Answer: TRUE Diff: 1 Skill: Concept Objective: 18-5 Summarize how quality management is important in global operations and supply-chain management AACSB: Application of knowledge 26 Copyright © 2022 Pearson Education, Ltd. 94) What is a just-in-time (JIT) inventory system? What are the implications of JIT for firms that use foreign sourcing? Answer: JIT systems focus on reducing inefficiency and unproductive time in the production process to continuously improve the process and the quality of the product. The JIT system gets raw materials, parts, and components to the buyer "just in time" for use, sparing companies the cost of storing large inventories. However, the use of JIT means that parts must have few defects and must arrive on time. That is why companies need to develop solid supplier relationships to ensure good quality and delivery times if JIT is to work. Foreign sourcing can create big risks for companies that use JIT, because interruptions in the supply line can cause havoc. Quality of inventory is important, because inventory with significant amounts of defects will create problems for JIT. If the buyer has to purchase more because of expected defects, there will be not only wasted inventory but also higher carrying costs. Diff: 3 Skill: Synthesis Objective: 18-5 Summarize how quality management is important in global operations and supply-chain management AACSB: Application of knowledge 27 Copyright © 2022 Pearson Education, Ltd.