International Business Chapter 15 Brian Rawson
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
The process of assessing a company's ability to produce enough output to satisfy market demand is called ________.
A) capacity planning
B)
lean production
C) process management
D) product structure modeling
Transportation costs are one of the driving forces behind the globalization of the ________ industry.
A) health care
B) publishing
C) software
D) steel
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 parti
C) Each production activity generates more value in a particular location than elsewhere.
________ refers to the concentration of production facilities in one location.
A) Lean production
B) Continuous production
C) Centralized production
D) Horizontal integration
C) Centralized production
________ 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 inte
B) Decentralized production
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 production
B) lean production
C) centralized production
D)
horizontal integration
C) centralized production
An Asian jewelry company maintains production facilities in South Korea, Vietnam, and Malaysia. Which of the following is the company exemplifying?
A) lean production
B) decentralized production
C) vertical integration
D) continuous production
B) decentralized production
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
B) decentralized production
The decentralization of production facilities is a typical policy for companies that pursue ________.
A) a multinational strategy
B) a global strategy
C) mass customization
D) vertical integration
A) a multinational strategy
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
Companies with centralized production facilities are often pursuing ________ strategies.
A) low-cost
B) differentiation
C) retrenchment
D) combination
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
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
D) a firm's business-level strategy
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
B) manufacture in large production batches
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
A) facilities layout planning
Which of the following factors has the least effect on facilities layout planning?
A) supply of land in a nation
B) cost of land in a nation
C) a firm's production process
D) age of the company
Wilson Industries Inc. is a multinational firm that designs and produces premium leather bags for major destinations worldwide. The company's board of directors is
meeting to discuss changes that might be needed in the company's operations.
The board plan
Wilson Industries Inc. is a multinational firm that designs and produces premium leather bags for major destinations worldwide. The company's board of directors is meeting to discuss changes that might be needed in the company's operations.
If Wilson Indu
C) facilities location planning
Wilson Industries Inc. is a multinational firm that
designs and produces premium leather bags for major destinations worldwide. The company's board of directors is meeting to discuss changes that might be needed in the company's operations.
The board will
Wilson Industries Inc. is a multinational firm that designs and produces premium leather bags for major destinations worldwide. The company's board of directors is meeting to discuss changes that might be needed in the company's operations.
If the board d
D) facilities layout planning
Based in Kentucky, Hafstrom Motors has always used spare parts made in America for its automobiles. However, sales and profits have slumped over the past three years. A senior manager at the company comes up with new strategies for improving the firm's pr
True or False: The process of assessing a company's ability to produce enough output to satisfy market demand is called process planning.
True or False: Capacity planning applies only to manufacturing companies.
True or False: Availability of energy is an important aspect of the business environment necessary for facilities location planning.
True or False: Worker productivity tends to be lower in most developing nations than in developed nations.
True or False: Transportation costs are a driving force behind the globalization of the steel industry.
True or False: Companies selling differentiated products find centralized production most effective.
True or False: It is important for low-cost competitors to locate near their markets in order to keep track of buyer preferences.
True or False: The particular process to be used to create products is typically determined by a firm's business-level strategy.
True or False: Availability and cost of labor in the local market is crucial to process planning.
True or False: The process by which a company extends its control over additional stages of production is called vertical integration.
True or False: Companies strive toward quality improvements for attaining economies of scale.
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
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) Making a product gives managers greater control over the production process.
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 mak
D) Buying a product enables a company to gain a great deal of power in their relationships with suppliers.
Which of the following processes will a computer assembling firm engage in if it decides to manufacture its own monitors and printers?
A) outsourcing
B) vertical integration
C) niche
marketing
D) lean production
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
________ 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
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 politi
C) It reduces political risk by enabling the company to avoid investing in plants and equipment abroad.
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
Which of the following is experienced by a company that outsources its product development?
A) reduced investments in research and development
B) reduced market flexibility
C) less market influence with
suppliers
D) lower product costs due to the eliminat
A) reduced investments in research and development
________ in the computer industry is the outsourcing of the actual assembly of computers plus the job of shipping them to distributors and other intermediaries.
A) Agile manufacturing
B) Just in time manufacturing
C) Lean manufacturing
D) Stealth manufact
Storage facilities, retail outlets, and production equipment are
examples of ________.
A) liquid assets
B) current assets
C) fixed assets
D) intangible assets
A fixed asset can also be referred to as a ________ asset.
A) liquid
B) current
C) tangible
D) trading account
Which of the following is a barrier to buying products from international suppliers?
A) extremely low tariffs
B) additional transportation costs
C) lower flexibility to respond to market conditions
D) high political
risk
B) additional transportation costs
Which of the following is established by a company that builds an entirely new facility?
A) a divestiture
B) a shadow economy
C) a greenfield investment
D) a shell corporation
C) a greenfield investment
Based in Kentucky, Hafstrom Motors has always used spare parts made in America for its automobiles. However, sales and profits have slumped over the past three years. A senior manager at the company comes up with new strategies for improving the firm's pr
Based in Kentucky, Hafstrom Motors has always used spare parts made in America for its automobiles. However, sales and profits have slumped over the past three years. A senior manager at the company comes up with new strategies for improving the firm's pr
Echo Corporation manufactures high-quality audio components, such as speakers, amplifiers, and receivers, for home entertainment systems. Echo has been losing market share in recent years due to the competitive pricing of other audio component manufacture
B) Echo could save money by reducing the costs incurred in manufacturing the component parts.
Echo Corporation manufactures high-quality audio components, such as speakers, amplifiers, and receivers, for home entertainment systems. Echo has been losing market share in recent years due to the competitive pricing of other audio component manufacture
A) Do purchasing components present the lowest cost option for Echo?
True or False: Companies make products rather than buy them in order to reduce total costs.
True or False: A company often undertakes in-house production when it can manufacture a product for less than it must pay another business to produce it.
True or False: Today, due to improved technology, it is fairly easy to persuade an outside supplier to make significant modifications to a component.
True or False: Outsourcing refers to the practice of buying from another company a good or a service that is part of a company's value-added activities.
True or False: One reason to buy a product instead of making it in-house is the greater flexibility to respond to market conditions.
True or False: Total quality management reduces the responsibility on each individual in the production process.
Which of the following statements is true regarding the ISO 9000 standards?
A) They specify details on how companies should develop its quality processes.
B) The standards are applicable to Asia exclusively.
C) ISO 9000 is a certification that companies g
D) The standards require each company to define and document its own quality processes.
________ is the term used to refer to a
production technique in which inventory is kept to a minimum and inputs to the production process arrive exactly when they are needed.
A) Just-in-time manufacturing
B) Lean manufacturing
C) Continuous production
D)
A) Just-in-time manufacturing
The just-in-time (JIT) manufacturing technique was originally developed in ________.
A) the United States
B) China
C) Japan
D) Germany
Which of the following statements
is true regarding total quality management (TQM)?
A) TQM emphasizes on a single effort at the start to improve the quality of its products.
B) TQM largely increases the responsibility on each individual to focus on qualit
B) TQM largely increases the responsibility on each individual to focus on quality.
________ requires each individual to be focused on the quality of his or her own output.
A) Total quality management
B) Quality-of-life
index
C) Integrated business planning
D) Organizational restructuring
A) Total quality management
A company using just-in-time (JIT) manufacturing involves ________.
A) increased availability of components in large inventories
B) quicker detection of defective materials and components
C) easier training of sales staff regarding product descriptions
D)
B) quicker detection of defective materials and components
Which of the following would companies do in markets that require long payback periods?
A) divest operations
B) implement retrenchment strategies
C) emphasize on decruitment
D) reinvest profits
When a market is experiencing rapid growth, a company will ________.
A) emphasize on decruitment
B) divest its operations
C) reinvest in its operations
D) implement retrenchment strategies
C) reinvest in its operations
A loan in which a parent company deposits money with a host-country bank, which then lends the money to a subsidiary located in the host country is called a ________.
A) syndicated loan
B) back-to-back loan
C) mortgage loan
D) title loan
American Depository Receipts (ADRs) are ________.
A) certificates that represent shares of stock in American companies
B) dollar deposits made by foreign firms conducting business in the U.S.
C)
certificates that trade in the U.S. and represent shares of
C) certificates that trade in the U.S. and represent shares of stock in a non-U.S. company
________ are traded in Luxembourg and London and represent a specific number of shares in an outside company.
A) Common stock
B) Bills of lading
C) Revocable letters of credit
D) Global Depository Receipts
D) Global Depository Receipts
Which of
the following is true of American Depository Receipts (ADRs)?
A) Investors who buy ADRs have to pay a currency-conversion fee.
B) There is a minimum purchase requirement for ADRs.
C) Companies offer ADRs in the U.S. to appeal to mutual funds.
D)
C) Companies offer ADRs in the U.S. to appeal to mutual funds.
________ is the financing obtained from investors who believe the borrower will experience rapid growth and who receive equity in return
for their investment.
A) Internal funding
B) Venture capital
C) Credit derivative
D) Mortgage loan
Which of the following types of money adds to the volatility of emerging markets because it can be quickly withdrawn from its investment?
A) hot money
B) patient money
C) key money
D) fiat money
________ refers to the foreign direct investment in factories, equipment, and land that cannot be pulled out of the market quickly.
A) Hot
money
B) Patient money
C) Fiat money
D) Key money
Money earned from the sale of goods and services is known as ________.
A) revenue
B) dividend
C) depreciation
D) book value
The ________ of a company is the mix of equity, debt, and internally generated funds that it uses to finance its activities.
A) enterprise value
B) stock value
C) capital structure
D) corporate structure
________ appeals to companies because
it lowers the amount of taxes the companies must pay.
A) Debt
B) Equity
C) Stock value
D) Enterprise value
Echo Corporation manufactures high-quality audio components, such as speakers, amplifiers, and receivers, for home entertainment systems. Echo has been losing market share in recent years due to the competitive pricing of other audio component manufacture
D) eliminating the exposure of assets to political risk
Verandas International is expanding its operations in North America. The Dutch company supplies customized furniture to five-star hotels. Verandas International is a leader in this industry, but the company believes it must increase its geographic reach t
A) borrowing from U.S. banks
Verandas International is expanding its operations in North America. The Dutch company supplies customized furniture to five-star hotels. Verandas International is a leader in this industry, but the company believes it must increase its geographic reach t
Verandas International is expanding its operations in North America. The Dutch company supplies customized furniture to five-star hotels. Verandas International is a leader in this industry, but the company believes it must increase its geographic reach t
A) American Depository Receipts
True or False: The ISO 9000 is a production technique in which inputs to the production process arrive exactly when they are needed.
True or False: Just-in-time manufacturing drastically reduces the costs associated with large inventories in the production process.
True or False: Companies usually decide to reinvest when a market is experiencing rapid growth.
True or False: 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.
True or False: A major disadvantage of American Depository Receipts (ADRs) is that investors who buy them must pay currency-conversion fees.
True or False: Venture capital is a source of equity financing for successful multinational companies.
True or False: Patient money is the cash that can be quickly withdrawn from a market in times of crisis.
True or False: Debt appeals to companies because it lowers the amount of taxes the companies must pay.