Chapter 15

Question 1

Which of the following terms refers to the decision of whether to produce a component
internally or to outsource it from another company?

buyer decision process
decision problem
per curiam decision
make-or-buy decision

Answer 1

make-or-buy decision

Question 2

The process of assessing a company's ability to produce enough output to satisfy market
demand is called \_\_\_\_\_\_\_\_.
capacity planning
lean production
process management
product structure modeling

Answer 2

capacity planning

Question 3

\_\_\_\_\_\_\_\_ refers to the concentration of production facilities in one location.
lean production
Continuous production
Centralized production
Horizontal integration

Answer 3

Centralized production

Question 4

________ 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.
Continuous production
Decentralized production
Vertical integration
Lean production

Answer 4

Decentralized production

Question 5

The decentralization of production facilities is a typical policy for companies that pursue \_\_.
a multinational strategy
a global strategy
mass customization
vertical integration

Answer 5

a multinational strategy

Question 6

The centralization of production facilities is a typical policy for companies that pursue
\_\_\_\_\_\_\_\_.
horizontal integration
product differentiation
a global strategy
a multinational strategy

Answer 6

a global strategy

Question 7

Companies with decentralized production facilities are often pursuing \_\_\_\_\_\_\_\_ strategies
low-cost
differentiation
retrenchment
combination

Answer 7

differentiation

Question 8

Deciding the spatial arrangement of production processes within production units is called
\_\_\_\_\_\_\_\_.
facilities layout planning
capacity planning
process planning
location economies

Answer 8

facilities layout planning

Question 9

Which of the following factors has the least effect on facilities layout planning?
supply of land in a nation
cost of land in a nation
a firms production process
age of the company

Answer 9

age of the company

Question 10

The process by which a company extends its control over additional stages of production is
called \_\_\_\_\_\_\_\_.
a push strategy
a pull strategy
vertical integration
horizontal integration

Answer 10

vertical integration

Question 11

Which of the following reasons encourages companies to make a product rather than buy it?

Making a product gives managers greater control over the production process.

Making a product lowers the risk associated with the production process.

Making a product increases the company’s flexibility to respond to market conditions.

Making a product gives companies a great deal of power in their relationships with suppliers.

Answer 11

Making a product gives managers greater control over the production process.

Question 12

Which of the following reasons encourages companies to buy a product rather than make it?

Buying a product gives managers greater control over the production process.

Buying a product increases the company’s total costs significantly compared to making the product
in-house.

Buying a product ensures non-flexibility to local market conditions.

Buying a product enables a company to gain a great deal of power in their relationships with
suppliers.

Answer 12

Buying a product enables a company to gain a great deal of power in their relationships with
suppliers.

Question 13

A firm that buys from another company a good or service that is part of the firm's value-added
activities is practicing \_\_\_\_\_\_\_\_.
outsourcing
vertical integration
horizontal integration
lean production

Answer 13

outsourcing

Question 14

\_\_\_\_\_\_\_\_ manufacturing is any manufacturing that takes place in a country different from the
home country.
offshore
multidomestic
cost minimization
outsourcing

Answer 14

offshore

Question 15

________ in the computer industry is the outsourcing of the actual assembly of computers plus the job
of shipping them to distributors and other intermediaries.
Agile manufacturing
Just in time manufacturing
Lean manufacturing
Stealth manufacturing

Answer 15

Stealth manufacturing

Question 16

Storage facilities, retail outlets, and production equipment in the host country are examples of
\_\_\_\_\_\_\_\_.
liquid assets
current assets
fixed assets
intangible assets

Answer 16

fixed assets

Question 17

Which of the following is a barrier to buying products from international suppliers?
extremely low tariffs
additional transportation costs
lower flexibility to respond to market conditions
high political risk

Answer 17

additional transportation costs

Question 18

What are the guidelines that provide the basis for quality certification called?
WTO standards
ISO 1000
ISO 9000
TQM standards

Answer 18

ISO 9000

Question 19

________ 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.
Just-in-time manufacturing
Lean manufacturing
Continuous production
Flow production

Answer 19

Just-in-time manufacturing

Question 20

\_\_\_\_\_\_\_\_ is an integrated effort to systematically and continuously improve the quality of an
organization's products and/or services.
Total quality management
Quality-of-life index
Integrated business planning
Organizational restructuring

Answer 20

Total quality management

Question 21

When a market is experiencing rapid growth, a company will \_\_\_\_\_\_\_\_.
emphasize on decruitment
divest its operations
reinvest in its operations
implement retrenchment strategies

Answer 21

reinvest in its operations

Question 22

American Depository Receipts (ADRs) are ________.
certificates that represent shares of stock in American companies

dollar deposits made by foreign firms conducting business in the U.S.

certificates that trade in the U.S. and represent shares of stock in a non-U.S. company

currency deposits made in the U.S. by firms based in other countries

Answer 22

certificates that trade in the U.S. and represent shares of stock in a non-U.S. company

Question 23

\_\_\_\_\_\_\_\_ are traded in Luxembourg and London and represent a specific number of shares in
an outside company
common stock
bills of lading
revocable letters of credit
global depository receipts

Answer 23

global depository receipts

Question 24

________ is the financing obtained from investors who believe the borrower will experience
rapid growth and who receive equity in return for their investment.
internal funding
venture capital
credit derivative
mortage loan

Answer 24

venture capital

Question 25

Which of the following types of money adds to the volatility of emerging markets because it can
be quickly withdrawn from its investment?
hot money
patient money
key money
fiat money

Answer 25

hot money

Question 26

\_\_\_\_\_\_\_\_ refers to the foreign direct investment in factories, equipment, and land that cannot
be pulled out of the market quickly.
hot money
patient money
fiat money
key money

Answer 26

patient money