Q&A Hero

Q: ________ will enable a company to reduce the degree to which it is vertically integrated and the overall amount of specialized skills and knowledge that it would have to possess. A) Outsourcing B) Skimming C) Lean production D) Centralized production

Q: A firm that buys from another company a good or service that is part of the firm's value-added activities is practicing ________. A) outsourcing B) vertical integration C) horizontal integration D) lean production

Q: Which of the following processes will a computer assembling firm engage in if it decides to manufacture its own monitors and printers?A) outsourcingB) vertical integrationC) niche marketingD) lean production

Q: Which of the following reasons encourages companies to buy a product rather than make it? A) Buying a product gives managers greater control over the production process. B) Buying a product decreases the company's total costs significantly compared to making the product in-house. C) Buying a product ensures non-flexibility to local market conditions. D) Buying a product enables a company to gain a great deal of power in their relationships with suppliers.

Q: Which of the following reasons encourages companies to make a product rather than buy it? A) Making a product gives managers greater control over the production process. B) Making a product lowers the risk associated with the production process. C) Making a product increases the company's flexibility to respond to market conditions. D) Making a product gives companies a great deal of power in their relationships with suppliers.

Q: The process by which a company extends its control over additional stages of production is called ________. A) a push strategy B) a pull strategy C) vertical integration D) horizontal integration

Q: Discuss the standardization versus adaptation decision for managers when considering production facilities, and describe considerations for managers when acquiring fixed assets.

Q: Describe the production managers' decision regarding whether to centralize or decentralize production facilities, and explain the benefits of vertical integration.

Q: How is process planning affected by a company's business-level strategy? How can outsourcing lower risk for firms?

Q: Explain the process of facilities location planning. What issues must companies consider while selecting the location for their production facilities?

Q: Companies strive toward quality improvements for attaining economies of scale.

Q: The process by which a company extends its control over additional stages of production is called vertical integration.

Q: Availability and cost of labor in the local market is crucial to process planning.

Q: The particular process to be used to create products is typically determined by a firm's business-level strategy.

Q: It is important for low-cost competitors to locate near their markets in order to keep track of buyer preferences.

Q: Companies selling differentiated products find centralized production most effective.

Q: Transportation costs are a driving force behind the globalization of the steel industry.

Q: Worker productivity tends to be lower in most developing nations than in developed nations.

Q: Availability of energy is an important aspect of the business environment necessary for facilities location planning.

Q: Capacity planning applies only to manufacturing companies.

Q: The process of assessing a company's ability to produce enough output to satisfy market demand is called process planning.

Q: The senior manager recommends that Hafstrom obtain auto parts from a country where production activities would generate more value than it would generate elsewhere. He wants to take advantage of ________.A) just-in-time manufacturingB) facilities layout planningC) process planningD) location economies

Q: If the board discusses the spatial arrangement of production processes within Wilson's production facilities, they will be engaging in ________.A) capacity planningB) facilities location planningC) process planningD) facilities layout planning

Q: The board will also examine new production techniques the company could use to create its product. This examination is a part of ________.A) capacity planningB) process planningC) facilities location planningD) centralized production

Q: If Wilson Industries selects a new area for its production units, the company will be implementing ________.A) capacity planningB) process planningC) facilities location planningD) product structure modeling

Q: The board plans to examine Wilson's ability to produce enough bags to satisfy their customers' demands. This evaluation is known as ________.A) capacity planningB) process planningC) lean productionD) product structure modeling

Q: Which of the following factors has the least effect on facilities layout planning?A) supply of land in a nationB) cost of land in a nationC) a firm's production processD) age of the company

Q: Deciding the spatial arrangement of production processes within production units is called ________. A) facilities layout planning B) capacity planning C) process planning D) location economies

Q: Which of the following will a company that is pursuing a low-cost leadership strategy most likely use for creating its product? A) implement handcrafted artisanship B) manufacture in large production batches C) manufacture components in-house D) customize products for each customer

Q: Which of the following determines the process that a company will use to create its product? A) a firm's multinational strategy B) a firm's global strategy C) a firm's corporate-level strategy D) a firm's business-level strategy

Q: Deciding the sequence of operations a company will use to create its product is called ________. A) product planning B) capacity planning C) location economies D) process planning

Q: Companies with centralized production facilities are often pursuing ________ strategies. A) low-cost B) differentiation C) retrenchment D) combination

Q: The centralization of production facilities is a typical policy for companies that pursue ________. A) horizontal integration B) product differentiation C) a global strategy D) a multinational strategy

Q: The decentralization of production facilities is a typical policy for companies that pursue ________.A) a multinational strategyB) a global strategyC) mass customizationD) vertical integration

Q: A company that sells differentiated products may maintain the ability to respond quickly to changing buyer preferences by utilizing ________. A) vertical integration B) decentralized production C) lean production D) continuous production

Q: An Asian jewelry company maintains production facilities in South Korea, Vietnam, and Malaysia. Which of the following is the company exemplifying?A) lean productionB) decentralized productionC) vertical integrationD) continuous production

Q: A British toy company manufactures all of its product lines in a single facility in Europe. Which of the following is the company demonstrating?A) continuous productionB) lean productionC) centralized productionD) horizontal integration

Q: ________ refers to a situation in which facilities are spread over several locations, with one facility for each national business environment in which the company markets its products. A) Continuous production B) Decentralized production C) Vertical integration D) Lean production

Q: ________ refers to the concentration of production facilities in one location.A) Lean productionB) Continuous productionC) Centralized productionD) Horizontal integration

Q: Which of the following statements is true regarding location economies?A) The demand and supply factors heavily influence the productivity of a location.B) They apply only to service providers.C) Each production activity generates more value in a particular location than elsewhere.D) They are restricted to business activities that involve product manufacturing.

Q: Transportation costs are one of the driving forces behind the globalization of the ________ industry.A) health careB) publishingC) softwareD) steel

Q: The process of assessing a company's ability to produce enough output to satisfy market demand is called ________.A) capacity planningB) lean productionC) process managementD) product structure modeling

Q: Which of the following terms refers to the decision of whether to produce a component internally or to outsource it from another company? A) buyer decision process B) decision problem C) per curiam decision D) make-or-buy decision

Q: Explain the concept of capital structure as it applies to a company with international operations.

Q: How can companies use internal funding to finance ongoing international business activities?

Q: What are the advantages of American Depository Receipts (ADRs)?

Q: What are the options available to companies seeking financial resources?

Q: Why might companies decide to reinvest, scale back, or divest local operations?

Q: Debt appeals to companies because it lowers the amount of taxes the companies must pay.

Q: Patient money is the cash that can be quickly withdrawn from a market in times of crisis.

Q: Venture capital is a source of equity financing for successful multinational companies.

Q: A major disadvantage of American Depository Receipts (ADRs) is that investors who buy them must pay currency-conversion fees.

Q: A back-to-back loan is one in which a subsidiary acquires a loan from the same bank where its parent secured the first loan.

Q: Companies usually decide to reinvest when a market is experiencing rapid growth.

Q: Just-in-time manufacturing drastically reduces the costs associated with large inventories in the production process.

Q: The ISO 9000 is a production technique in which inputs to the production process arrive exactly when they are needed.

Q: Differentiate between worldwide and dual pricing. Which one of these is more difficult to achieve and why?

Q: How does the dual extension method work as a promotional strategy?

Q: Antidumping tariffs punish producers in the offending nation by increasing the price of their products to a fairer level.

Q: An arm's length price is the price that is charged for products sold among a company's divisions or subsidiaries.

Q: The lower a product's value density, the more localized is the distribution system for that product.

Q: The more intermediaries there are in a distribution channel, the less costly the channel becomes.

Q: Scooters Inc. has traditionally sold its products at one price in the domestic market and at another price in export markets, which is called a(n) ________ pricing strategy. A) target B) value C) dual D) arm's length

Q: Because Scooters Inc. caters to a very narrow niche of wealthy individuals, the CEO is interested in implementing a worldwide pricing scheme. Which of the following is most likely a reason for the establishment of such a scheme? A) Their production costs differ from market to market. B) The currency values fluctuate fairly predictably. C) Their distribution channels are lengthy in each market. D) Their customers have similar levels of purchasing power.

Q: Ben knows that a pricing policy in which one selling price is established for all international markets is called ________. A) worldwide pricing B) value-based pricing C) dual pricing D) arm's length pricing

Q: If Old World adopts different selling prices in export markets than it has in the British market, it would be following a ________ pricing strategy.A) dualB) transferC) targetD) worldwide

Q: Which of the following occurs when the price of a good is lower in export markets than it is in the domestic market?A) skimmingB) dumpingC) transfer pricingD) price escalation

Q: Upper or lower limits placed on the prices of products sold within a country are known as ________. A) price controls B) transfer prices C) price escalators D) arm's length prices

Q: The free-market price that unrelated parties charge one another for a specific product is called a(n) ________. A) worldwide price B) transfer price C) dual price D) arm's length price

Q: Which of the following refers to the price charged for products sold between a company's divisions or subsidiaries? A) dual pricing B) transfer price C) price skimming D) arm's length price

Q: When a product has a higher selling price in the target market than it does in the home market or the country where production takes place, it is called ________. A) price skimming B) price escalation C) price dispersion D) price fixing

Q: A pricing policy in which a product has a different selling price in export markets than it has in the home market is called ________. A) dual pricing B) cost-plus pricing C) penetration pricing D) premium pricing

Q: A pricing policy in which one selling price is established for all international markets is called ________. A) dual pricing B) value-based pricing C) worldwide pricing D) target pricing

Q: Which of the following is true of the value densities of products? A) The cost of transporting goods with high value-density ratios is high relative to their value. B) Products with high value-density ratios are integrated into the manufacturing process at points close to their original locations. C) Most commodities, including cement, iron ore, and crude oil, have high value-density ratios. D) The lower a product's value density, the more localized the distribution system.

Q: Which of the following products has a low value-density ratio? A) semiconductors B) emerald C) crude oil D) premium perfumes

Q: Which of the following is implied by a product with a low value density? A) the distribution system is more localized B) the product is more valuable C) the cost of shipping the product is negligible D) the product is processed in areas away from their original locations

Q: The value of a product relative to its weight and volume is called its ________. A) face value B) value investing C) real value D) value density

Q: How can a lack of market understanding, theft, and corruption affect distribution?

Q: What is value density and what is its impact on an organization's distribution policy?

Q: Explain the primary concerns of managers when establishing distribution policies.