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| 1.
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TQM is a direct descendent of the Six Sigma methodology that was developed by W. Edward Deming. |
| | A) | True |
| | B) | False |
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| 2.
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In order to realize all major plant-level scale economies, a plant must operate at the minimum efficient scale of output. |
| | A) | True |
| | B) | False |
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| 3.
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The strategic role of foreign factories evolves over time. |
| | A) | True |
| | B) | False |
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| 4.
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The emergence of JIT, CAD, and CAM have increased pressure for firms to establish long-term relationships with their suppliers. |
| | A) | True |
| | B) | False |
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| 5.
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Today, Web-based information systems play a crucial role in material management. |
| | A) | True |
| | B) | False |
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| 6.
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The process that controls the movement of physical materials through the value chain, from procurement through production and into distribution is known as |
| | A) | materials administration |
| | B) | materials management |
| | C) | logistics |
| | D) | operations |
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| 7.
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Before a firm is permitted to enter the EU marketplace, the firm must meet |
| | A) | Six Sigma quality |
| | B) | ISO 9000 standards |
| | C) | PRC (Process Quality Realized) standards |
| | D) | CQC levels |
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| 8.
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Currency depreciation can transform a country from a _____ to a ______. |
| | A) | low cost manufacturing location, high cost manufacturing location |
| | B) | high cost manufacturing location, low cost manufacturing location |
| | C) | highly attractive location, unattractive location |
| | D) | protected environment, unprotected environment |
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| 9.
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The notion that as plant output expands, unit costs decrease is known as |
| | A) | minimum efficient scale |
| | B) | the learning curve advantage |
| | C) | efficiency utilization |
| | D) | economies of scale |
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| 10.
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When the level of output at which most plant-level scale economies are exhausted, _____ has been reached |
| | A) | the Six Sigma benchmarking system |
| | B) | the learning curve advantage |
| | C) | economies of scale |
| | D) | minimum efficient scale |
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| 11.
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A company might consider decentralizing production when |
| | A) | fixed costs are high |
| | B) | there are few differences in factor costs |
| | C) | volatility in important exchange rates is expected |
| | D) | trade barriers are low |
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| 12.
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Concentrated production will be favored in all of the following cases except when |
| | A) | there are substantial differences in political economy |
| | B) | when exchange rates are volatile |
| | C) | product value-to-weight ratios are high |
| | D) | the product serves universal needs |
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| 13.
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A firm will probably decentralize production in all of the following situations except |
| | A) | when flexible manufacturing technologies are available |
| | B) | when fixed costs are low |
| | C) | the product does not serve universal needs |
| | D) | there are few differences in culture |
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| 14.
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A company will favor concentrated production when |
| | A) | trade barriers are substantial |
| | B) | there are few differences in factor costs |
| | C) | location externalities are not important |
| | D) | minimum efficient scale is low |
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| 15.
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When a firm must invest in specialized assets to supply another, the firm will probably |
| | A) | outsource production |
| | B) | have high bargaining power |
| | C) | avoid vertical integration |
| | D) | make the product in-house |
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| 16.
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Suppose an auto company develops a new, uniquely designed fuel injection system that requires investments in specialized manufacturing equipment that can only be used to produce this specific product. The company will probably choose _____ within the make-versus buy context. |
| | A) | attempt to find an alternative, more flexible manufacturing technique |
| | B) | form a joint venture with another company to limit exposure to risk and investment |
| | C) | outsource production to another firm to avoid the manufacturing investments required |
| | D) | make the product in-house |
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| 17.
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Among the different reasons to make a product in-house, ______ is the least compelling. |
| | A) | lowering costs |
| | B) | improving scheduling |
| | C) | protecting proprietary product technology |
| | D) | facilitating specialized investments |
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| 18.
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A firm will choose to _______ when proprietary product technology gives the firm a competitive advantage. |
| | A) | contract production of the product to outside suppliers |
| | B) | vertically integrate |
| | C) | form a joint venture will a firm in the same industry |
| | D) | develop an alternative manufacturing technique |
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| 19.
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Suppose that a firm such as Toyota is the most efficient firm in the world at a producing a particular product, Toyota should _______ within the make-versus buy decision framework. |
| | A) | vertically integrate |
| | B) | outsource production |
| | C) | seek to become even more efficient |
| | D) | assist outside suppliers to improve industry efficiency levels |
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| 20.
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When a firm wants to maintain strategic flexibility, the firm should |
| | A) | make its product in-house |
| | B) | form strategic alliances with other firms |
| | C) | enter a joint venture to limit costs and risks |
| | D) | outsource production |
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| 21.
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A firm that sources the same products from suppliers based in two countries is probably trying to |
| | A) | lower costs |
| | B) | capture more orders from a country |
| | C) | maintain strategic flexibility |
| | D) | trick its suppliers |
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| 22.
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If the optimal location for the production of a particular product is in a location that is highly volatile politically, a firm will probably choose to |
| | A) | outsource production |
| | B) | vertically integrate |
| | C) | form a joint venture to limit risks |
| | D) | make the product in-house |
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| 23.
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A firm might choose to _______ in an effort to limit an organization's scope and reduce organizational complexity. |
| | A) | vertically integrate |
| | B) | enter into a joint venture |
| | C) | make a product in-house |
| | D) | outsource production |
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| 24.
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For many firms that used JIT systems, the September 11 attacks on the World Trade Centers |
| | A) | forced firms to access their buffer stocks |
| | B) | caused temporary shutdowns in production |
| | C) | had little effect on those firms with large warehouse stores |
| | D) | saw increased demand |
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| 25.
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Which of the following statements about EDI is not true? |
| | A) | it is used to coordinate the flow of materials into manufacturing, through manufacturing, and out to consumers |
| | B) | it allows suppliers, shippers, and the purchasing firm to communicate with each other with no time delay |
| | C) | it eliminates paperwork |
| | D) | it is becoming less common among manufacturing firms |
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