Chapter 17- Global Production, Outsourcing, and Logistics

Question 1

what are the two strategic objectives of logistics

Answer 1

lowering costs and increasing product quality

Question 2

TQM

Answer 2

total quality management; how do i make something of high quality and keep it that way

Question 3

the more diverse your operations are internationally

Answer 3

the harder it is to keep TQM up; more locations so harder to keep the quality up

Question 4

who came up with the concept of TQM

Answer 4

Edward Deming

Question 5

industrial park strategy

Answer 5

explain it as best you can

Question 6

just-in-time

Answer 6

maybe getting goods there just in time so that you don’t have a lot of inventory sitting around or backed up supply chains

Question 7

one key question that logistics tries to answer

Answer 7

where should production activities be concentrated

Question 8

what did Edward Deming say about increasing production with TQM

Answer 8

if you have supervisors spend time with the people on the shop floor so that TQM could be increased; shop floor employees would be more creative to problems; train employees to keep pace; create a good environment

Question 9

successor to Deming’s TQM

Answer 9

Six Sigma

Question 10

a production process that would be 99.99966 accurate, creating just 3.4 defects per one million units; a statistical approach to measuring quality

Answer 10

six sigmas

Question 11

a governmental program for quality control in the EU

Answer 11

ISO 9000

Question 12

what three factors do you look at to determine where to locate production activities

Answer 12

country, technology, and product factors

Question 13

what are the two types of technology factors

Answer 13

unit cost curve (how much is it going to cost us to make one and how will that change over time) and minimum efficient scale

Question 14

what product factors need to be considered

Answer 14

value to weight ratio

Question 15

if something has a high weight but low value

Answer 15

it is much better to make it where it will be bought

Question 16

if something has a low weight but high value

Answer 16

then it is much better to ship because it will not impact your profit margin too much

Question 17

with a lot of locations it is harder to maintain ____ but it makes it easier to have ______

Answer 17

TQM

local responsiveness

Question 18

making everything from start to finish

Answer 18

top to bottom manufacturing; should we make everything ourselves or should we focus on what we do best and get the best components for the overall product (Rolls Royce car radios

Question 19

a way of measuring economies of scale; at some point the marginal savings you make decrease

Answer 19

unit cost curve

Question 20

when there are no additional benefits to manufacturing more you have reached the

Answer 20

minimum efficient scale

Question 21

other producers may have a better product than what you would be able to efficiently and profitably produce

Answer 21

outsourcing

Question 22

one downside to top to bottom manufacturing

Answer 22

you may not be able to make the best everything; it splits your focus; and it limits your options because you now have to buy the components that your company is making

Question 23

there is a high failure rate in mergers and acquisitions due to

Answer 23

the hubris effect; top management makes a decision and then no one challenges the decision

Question 24

all the activities involved in manufacturing an article for sale or a service to be provided

Answer 24

production

Question 25

what activities are part of supply chain management

Answer 25

purchasing, logistics, and operations

Question 26

the part of the supply chain that plans, implements, and controls the flow of materials

Answer 26

logistics

Question 27

what is a basic tenet of the TQM approach

Answer 27

poor quality materials are not acceptable

Question 28

what are included in the downstream portion of the global supply chain

Answer 28

retailers and wholesalers

Question 29

the total quality management approach to increasing product reliability was first adopted by companies in

Answer 29

japan

Question 30

what three characteristics of manufacturing technology does the text refer to when making a location decision

Answer 30

level of fixed costs, flexibility of the technology, and minimum efficient scale

Question 31

what can make it economical to set up production facilities in many different locations at the same time

Answer 31

low fixed costs

Question 32

the scale of output that a production facility must operate at to realize all major plant level scale economies is called

Answer 32

the minimum efficient scale

Question 33

flexible manufacturing technology is also called

Answer 33

lean production

Question 34

the term used to describe a company’s ability to produce a customized product at low cost is

Answer 34

mass customization

Question 35

influences a company’s transportation costs

Answer 35

the value-to-weight ratio

Question 36

needs that are the same all over the world

Answer 36

universal needs

Question 37

establishing many production facilities located near markets is a

Answer 37

decentralized production configuration

Question 38

when a firm establishes a facility in a centralized location and serves the global markets from this locatoin

Answer 38

concentrated production configuration

Question 39

what are three of the factors that lead a company to establish a concentrated production configuration

Answer 39

high fixed costs, product serves universal needs, value-to-weight ration is high

Question 40

when a firm gains valuable knowledge not only from domestic operations, but also from foreign subsidiaries, it demonstrates

Answer 40

global learning

Question 41

the ideal offshore factory would include

Answer 41

minimal investments in technology

Question 42

the purpose of a ____ factory is to create new processes, products, and technologies that can be used within all parts of the global firm

Answer 42

lead

Question 43

what are the benefits of a decentralized production strategy

Answer 43

be more locally responsive and decrease dependence on one location