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| 1 | |
Formal trade barriers, transportation costs, and foreign direct investment rules are some factor costs for a firm to take into account when relocating its value chain segment. |
| | A) | True |
| | B) | False |
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| 2 | |
The minimum efficient scale represents the point at which economies of scale start to be realized. |
| | A) | True |
| | B) | False |
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| 3 | |
For most outsourced operations, pay rates have proven to be far more important than productivity. |
| | A) | True |
| | B) | False |
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| 4 | |
Global learning refers to the process where the practices, knowledge and skills of headquarters are transferred to foreign locations. |
| | A) | True |
| | B) | False |
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| 5 | |
Web-based systems play a crucial role in materials management by tracking parts and optimizing schedules. |
| | A) | True |
| | B) | False |
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| 6 | |
Production and logistics can be performed internationally to lower the costs of value creation and _________________. |
| | A) | add value by better serving customer needs |
| | B) | avoid costly labor costs in domestic facilities |
| | C) | prevent the negative effects of WTO regulations |
| | D) | create a competitive advantage by lowering prices to the ultimate consumer |
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| 7 | |
___________________ creates pressures to decentralize production to major foreign markets in which the firm does business and to implement flexible manufacturing processes. |
| | A) | Outsourcing |
| | B) | Demand for local responsiveness |
| | C) | Demand for standardized products |
| | D) | Total quality management (TQM) |
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| 8 | |
Which of these is one of the most important product factors in determining location? |
| | A) | Price differentials |
| | B) | Location to distance ratio |
| | C) | ISO 9000 requirements |
| | D) | Cultural characteristics |
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| 9 | |
Decentralization of production makes sense when: |
| | A) | location externalities are important. |
| | B) | production technology has high fixed costs. |
| | C) | differences between countries in factor costs, political economy, and culture have a substantial impact on manufacturing costs. |
| | D) | trade barriers are high. |
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| 10 | |
With improvements in communications, transportation infrastructure, and education levels, many international businesses are moving away from viewing foreign factors as mere low-cost production facilities to _______________________________. |
| | A) | environmental and working-condition liabilities |
| | B) | globally dispersed centers of excellence |
| | C) | potential headquarters locations |
| | D) | lean manufacturing facilities |
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| 11 | |
When one firm must invest in specialized assets – assets that can only be used for one purpose – to be able to manufacture parts for the customer, ______________________. |
| | A) | mutual dependency is created |
| | B) | problems in the supply chain will result |
| | C) | that firm should outsource its production |
| | D) | production should rarely be located in a foreign location |
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| 12 | |
The volatility of countries’ political economies, exchange rate movements, and changes in relative factor costs make international outsourcing decisions: |
| | A) | so difficult to make that managers should instead rely on their own experience and “gut” instincts. |
| | B) | more effective if made at the local level. |
| | C) | more complicated than the already difficult domestic outsourcing decisions. |
| | D) | more effective if a firm focuses primarily on labor and transportation costs. |
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| 13 | |
__________________ is the term that describes skills that become more valuable over time through learning. |
| | A) | Global learning |
| | B) | Workforce enhancement |
| | C) | Outsourcing development |
| | D) | Dynamic capabilities |
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| 14 | |
Which of the following is NOT one of the advantages of “buy” in a make-or-buy decision? |
| | A) | Proprietary product knowledge and technology are protected. |
| | B) | The firm achieves greater strategy flexibility. |
| | C) | The firm can achieve lower costs. |
| | D) | The firm may be able to capture more business in a foreign country through offsets. |
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| 15 | |
The potential for reducing costs though logistics: |
| | A) | is enormous, which can positively affect profitability. |
| | B) | is best achieved through the increased use of technology and robotics. |
| | C) | is much harder to achieve in saturated markets than increasing sales to affect profitability. |
| | D) | depends on mastering international transportation costs. |
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