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International Business
Q:
Firms can reduce the failure of product development by ensuring that research and development, marketing, and production functions work independently.
Q:
Dispersing research and development activities to many locations around the world allows a firm to stay close to the center of leading-edge activity to gather scientific and competitive information and to draw on local scientific resources.
Q:
A technological innovation can make established products obsolete overnight.
Q:
In terms of pricing strategies, dumping occurs whenever an international firm sells a product for a price that is less than the price charged by domestic producers.
Q:
Predatory pricing and experience curve pricing do not violate antidumping regulations.
Q:
Predatory pricing exists whenever consumers in different countries are charged different prices for the same product, or for slightly different variations of the product.
Q:
The elasticity of demand for a product in a given country is determined by a number of factors, of which income level and competitive conditions are the two most important.
Q:
A disadvantage of standardized advertising is that it increases the costs of value creation by spreading the fixed costs of developing the advertisements over many countries.
Q:
A firm's ability to use a pull marketing strategy is limited in some countries by media availability.
Q:
The shorter the distribution channel, the more intermediaries there are that must be persuaded to carry the product for it to reach the consumer.
Q:
Firms in consumer goods industries that are trying to sell to a large segment of the market generally favor a push strategy.
Q:
A pull strategy refers to a marketing strategy that emphasizes personal selling rather than mass media advertising in the promotional mix.
Q:
Many international businesses try to counter negative source effects by deemphasizing their foreign origins.
Q:
One benefit of a longer distribution channel is that it cuts selling costs when the degree of fragmentation of the retail sector is less.
Q:
There is generally a critical link among channel length, the final selling price, and the firm's profit margin because each intermediary in a channel adds its own markup to the products.
Q:
The expertise, competencies, and skills of established retailers in a nation, and their ability to sell and support the products of international business are referred to as channel exclusivity.
Q:
In terms of channel length, the more fragmented the retail system, the less expensive it is for a firm to make contact with each individual retailer.
Q:
In terms of the differences between countries with respect to distribution systems, there is a tendency for lesser retail concentration in developed countries.
Q:
A concentrated retail system is one in which there are many retailers, none of which has a major share of the market.
Q:
Differences in government-mandated product standards can rule out mass production and marketing of a standardized product.
Q:
Firms based in less developed nations tend to build a lot of extra performance attributes into their products.
Q:
Consumers in the most developed countries are often willing to sacrifice their preferred product attributes for lower priced products.
Q:
In terms of factors influencing product attributes, the impact of tradition is particularly important in foodstuffs and beverages.
Q:
For a market segment to transcend national borders, consumers in that segment must have some compelling similarities along important dimensions such as age, values, and lifestyle choices.
Q:
When managers in an international business consider market segmentation in foreign countries, they need to be cognizant of the differences between countries in the structure of market segments.
Q:
Market segmentation refers to identifying distinct groups of consumers whose needs, wants, and purchasing behavior differ from others in important ways.
Q:
Markets can be segmented by geography, demography, sociocultural factors, and psychological factors.
Q:
According to Theodore Levitt, technology has resulted in the emergence of global markets for standardized consumer products on a previously unimagined scale of magnitude.
Q:
Firms vary their marketing mix from country to country depending on differences in national culture.
Q:
A critical aspect of the marketing function is identifying gaps in the market so that a firm can develop new products to fill those gaps.
Q:
A global marketing strategy that views the world's consumers as similar in their preferences is consistent with the mass production of a standardized output.
Q:
Production and logistics functions must be able to accommodate demands for local responsiveness. Elaborate.
Q:
Describe the Six Sigma methodology.
Q:
Describe the philosophy of total quality management.
Q:
What are the ways in which improved quality control reduces costs?
Q:
What are the important strategic objectives of an international firm's production and logistics functions?
Q:
Which of the following has caused proprietary software solutions to implement electronic data interchange systems become obsolete?
A.Just-in-time inventory system
B.Flexible machine technology
C.The Internet
D.Dynamic capabilities
E.Social Networking
Q:
Which of the following is a consequence of an electronic data interchange system?
A.Increased in production costs
B.Reduction in paperwork between suppliers, shippers, and the purchasing firm
C.Helps a firm centralize materials management decisions
D.Decrease in flexibility and responsiveness of the supply system
E.Leaves a firm without a buffer stock of inventory
Q:
Geminia Systems, a manufacturer of car components, wants to set up a system that will help in sending invoices to its customers once orders for input supply are placed. Which of the following should the company use to perform this function?
A.Computer-aided design system
B.Lean production
C.Just-in-time inventory system
D.Electronic data interchange
E.Social networking
Q:
Which of the following allows suppliers, shippers, and the purchasing firm to communicate with each other via the Internet with no time delay?
A.Electronic data interchange system
B.Data warehousing system
C.Batch processing system
D.Skills inventory system
E.Just-in-time inventory system
Q:
What do firms now typically use via the Internet to coordinate the flow of materials into manufacturing, through manufacturing, and out to customers?
A.Flexible manufacturing technology
B.Lean production
C.Computer-aided manufacturing
D.Electronic data interchange
E.Just-in-time inventory systems
Q:
One way to reduce the risks associated with a global supply chain that operates on just-in-time principles is to:
A.depend on one supplier for an important input.
B.outsource the production of inputs only to advanced countries.
C.hold an excess buffer stock of inventory.
D.source inputs from several suppliers located in different countries.
E.avoid using electronic data interchange.
Q:
Which of the following is a consequence of using just-in-time inventory systems?
A.It slows down inventory turnover.
B.It increases inventory holding costs.
C.It increases the amount of working capital a firm needs.
D.It can help firms improve product quality.
E.It does not allow defective inputs to be spotted immediately.
Q:
The drawback of a just-in-time inventory system is that it:
A.increases the total capital required by a firm.
B.leaves a firm without a buffer stock of inventory.
C.increases inventory holding costs, such as warehousing and storage costs.
D.is less efficient than traditional system in spotting and fixing defective inputs.
E.lowers a company's profitability as measured by return on capital invested.
Q:
Under a more traditional system as opposed to a just-in-time inventory system, warehousing parts for weeks before they are used:
A.reduces the total working capital required by a firm.
B.allows many defective parts to be produced before a problem is recognized.
C.results in a near error-free production process.
D.reduces the costs related to inventory holding.
E.reduces the need to write off excess unsold inventory against earnings.
Q:
A major cost saving from just-in-time inventory systems comes from:
A.a shift in focus away from quality.
B.increasing productivity of workers.
C.speeding up inventory turnover.
D.creating a buffer stock of inventory.
E.writing off excess unsold inventory against earnings.
Q:
Which of the following increases under just-in-time (JIT) inventory system?
A.Amount of working capital for inventory
B.Inventory turnover
C.Number of defective parts
D.Inventory holding costs
E.Storage costs
Q:
Which of the following is true about firms using just-in-time (JIT) inventory system?
A.A company is more likely to have excess unsold inventory that it has to write off against earnings.
B.Parts enter the manufacturing process immediately; they are not warehoused.
C.It is difficult to spot and fix defective inputs.
D.The amount of working capital a company needs to finance inventory increases.
E.A firm has ample buffer stock of inventory.
Q:
The basic philosophy behind just-in-time (JIT) inventory systems is to:
A.economize on inventory holding costs.
B.reduce inventory turnover.
C.create a buffer stock of inventory.
D.reduce costs by reducing quality.
E.increase the total working capital requirement.
Q:
Which of the following refers to a logistics system designed to deliver parts to a production process as they are needed, not before?
A.Inventory information system
B.Basket trading system
C.Buffer stock system
D.Just-in-time inventory system
E.Real-time processing system
Q:
Which of the following was pioneered by Japanese firms during that country's remarkable economic transformation during the 1960s and 1970s?
A.Lean production
B.Flexible manufacturing technology
C.Dynamic capabilities
D.Just-in-time inventory systems
E.Global learning
Q:
Which of the following is an objective of logistics?
A.Increase the cost of value creation
B.Manage a firm's global supply chain at a low cost
C.Reduce inventory turnover
D.Reduce a firm's customer responsiveness
E.Increase inventory holding costs
Q:
If a firm possesses proprietary product technology, the best option for that firm would be to:
A.manufacture the product in-house so that it does not lose its competitive advantage.
B.outsource the production activities to independent suppliers in order to realize economies of scale.
C.merge with competitors to reduce investments on technology.
D.share the technology to make the industry more competitive.
E.transfer the technology to less developed countries.
Q:
Which of the following is a recent trend among international businesses regarding make-or-buy decisions?
A.Foreign facilities are considered nothing more than low-cost production facilities.
B.Research and design operations are restricted to home-country production facilities.
C.Manufacturing facilities are being based in each major national market.
D.Firms are avoiding time-based competition with each other.
E.Outsourcing decisions are expanding to embrace the production of service activities.
Q:
Which of the following is the initial reason for the establishment of a foreign production facility?
A.Employee turnover is high.
B.Products are not labor-intensive.
C.Inventory turnover is low.
D.Exchange rate fluctuations are high.
E.Labor costs are low.
Q:
Which of the following is a hidden cost to basing production in a foreign location?
A.Low employee turnover
B.Low labor costs
C.Poor product quality
D.Expensive higher education system
E.Low inventory turnover
Q:
Which of the following is a step taken by automobile companies in situations where neither centralization nor decentralization of production is feasible?
A.Outsourcing production to developing countries
B.Inshoring production into the home country
C.Selling product patents and technology to competitors
D.Refraining from international trade
E.Establishing top-to-bottom manufacturing operations
Q:
Which of the following firms should spread its production over decentralized locations?
A.Univion Inc. operates in an industry where national differences in political economy and culture have a substantial impact on its cost of production.
B.Saturn Inc. operates in an industry where volatile fluctuations in important exchange rates are expected.
C.Brew Technology manufactures industrial machines and equipment that serve universal needs.
D.Gold Dreams Inc. customizes jewelry in precious metal and stones with the aid of flexible manufacturing technologies.
E.Uniton Inc. uses a production technology that has high fixed costs and high minimum efficient scale.
Q:
When is decentralization of manufacturing facilities most appropriate?
A.When the product serves universal needs
B.When exchange rates are expected to remain relatively stable
C.When the product's value-to-weight ratio is high
D.When there are few trade barriers
E.When the production technology has low minimum efficient scale
Q:
Which of the following firms should concentrate its production in a centralized location?
A.Jupiter Inc. operates in an industry where the fixed costs are high and services of supporting industries are of prime importance.
B.Star Goal Inc. manufactures consumer products like processed food, apparel, and cosmetics for which national differences in consumer taste and preference are wide.
C.Uranious Inc. operates in an economy where volatile fluctuations in exchange rates are frequently expected.
D.Earth Ventures Inc. is a mining company that exports iron orea product with low value-to-weight ratioto various countries.
E.Silver Times Inc. customizes heavy machines without the use of flexible manufacturing technologies.
Q:
When should a firm concentrate its production facilities in a centralized location?
A.When the production technology has a low minimum efficient scale
B.When the production technology has low fixed costs
C.When important exchange rates are expected to remain relatively stable
D.When flexible manufacturing technologies are unavailable
E.When the product's value-to-weight ratio is low
Q:
Concentration of production makes most sense when:
A.trade barriers are low.
B.the product's value-to-weight ratio is low.
C.important exchange rates are volatile.
D.flexible manufacturing technology does not exist.
E.the production technology has low fixed costs.
Q:
Which of the following is true of a product that serves universal needs?
A.It becomes necessary to customize the product to suit small consumer groups.
B.It becomes necessary to accommodate demands for local responsiveness.
C.It increases the attractiveness of concentrating production at an optimal location.
D.It is difficult to serve national differences in consumer taste and preference.
E.It is always attractive to globally disperse production to all major markets.
Q:
Which of the following statements is true of industrial products such as steel?
A.They serve needs that are the same all over the world.
B.They have drastic national differences in consumer taste and preference.
C.The need for local responsiveness for these products is more than consumer products.
D.It makes sense to produce these products in multiple locations close to major markets.
E.A plant must operate at the highest minimum efficient scale of output for these products.
Q:
Which of the following holds true for products with low value-to-weight ratios?
A.They are relatively expensive.
B.They do not weigh very much.
C.Their transportation costs account for a very small percentage of total costs.
D.It is advisable to manufacture them in multiple locations close to major markets.
E.Examples of these products are electronic components and pharmaceuticals.
Q:
Which of the following products is best manufactured in multiple locations close to major markets to reduce transportation costs?
A.Pharmaceuticals
B.Petroleum products
C.Books
D.Magazines
E.Electronics
Q:
Which of the following is true of products with high value-to-weight ratios?
A.They are expensive to transport.
B.They tend to increase in weight after processing.
C.They tend to be restricted under trade barriers.
D.They are expensive and do not weigh very much.
E.They have a low inventory turnover.
Q:
Which of the following is true of high value-to-weight ratio products?
A.They tend to have greater weight than other products in the segment.
B.Their transportation costs account for a very small percentage of total costs.
C.They tend to be inexpensive.
D.There is great pressure to produce these products in multiple locations close to major markets.
E.These products gain weight as raw materials get processed during transportation.
Q:
Two product features impact location decisions. Which of the two reduces the need for local responsiveness?
A.The product's ability to serve universal needs
B.The product's life cycle
C.The product's packaging
D.The product's flexible manufacturing technology
E.The product's value-to-weight ratio
Q:
A product's value-to-weight ratio affects location decision primarily because of its influence on:
A.transportation costs.
B.shelf life.
C.work-in-progress inventory.
D.inventory turnover.
E.capacity utilization.
Q:
Technological factors are making it feasible for firms to concentrate manufacturing facilities at optimal locations. The major brakes on this trend are:
A.differences in endowment factors.
B.transportation costs and trade barriers.
C.rising national differences in consumer tastes and preferences.
D.growing free trade areas and democracy.
E.declining fluctuations in exchange rates.
Q:
Which of the following statements is true of flexible manufacturing technologies?
A.They promote the idea of manufacturing in each major market.
B.They fail to produce multiple models from the same line.
C.They are used to reconcile the goals of large volumes and standardized output.
D.They decrease the utilization of individual machines.
E.They allow firms to customize products to national differences at a single facility.
Q:
Which of the following terms refers to the production of a variety of end products at a unit cost that could once be achieved only through bulk production of a standardized output?
A.Lean production
B.Just-in-time inventory
C.Mass customization
D.Specialized asset
E.Dynamic capability
Q:
Flexible manufacturing technologies are specially targeted at enabling companies to:
A.establish multiple manufacturing facilities in each major national market.
B.build large inventories.
C.achieve product standardization across markets.
D.increase their work in progress.
E.produce customized products without a significant cost penalty.
Q:
Amber Engineers Inc. wants to be able to customize products for different national markets and in turn increase its customer responsiveness. However, the fixed costs associated with its production are high. Hence, these functions will be performed most efficiently if Amber Engineers:
A.sets up a production facility that is well suited for mass production.
B.establishes multiple manufacturing facilities in each major national market.
C.increases each manufacturing unit's minimum efficient scale of output.
D.adopts flexible manufacturing technologies to help achieve mass customization.
E.locates its production unit in countries that have fluctuations in exchange rates.
Q:
Which of the following increases when a company achieves mass customization via flexible manufacturing technologies?
A.Cost structure
B.Waste
C.Customer responsiveness
D.Learning effects
E.Externalities
Q:
Which of the following is a consequence of using flexible machine cells?
A.It fails to adapt to the production of different products.
B.It generally results in stockpiles of partly finished products.
C.It improves capacity utilization and reduces wastes.
D.It increases setup time for complex equipment.
E.It adds to the cost structure of a firm.
Q:
Which of the following includes a grouping of various types of machinery, a common materials handler, and a computer to control the production of a family of parts or products?
A.Specialized asset
B.Dynamic capability
C.Turnkey project
D.Flexible machine cell
E.Just-in-time inventory
Q:
Which of the following is an implication of a mass production system?
A.It results in short production runs.
B.It fails to realize economies of scale.
C.It reduces the number of defects and eliminates waste.
D.It helps to accommodate consumer preferences for product diversity.
E.It creates massive inventories that have to be stored in large warehouses.
Q:
Mass customization reconciles the two goals of:
A.centralized production and long production runs.
B.product standardization and economies of scale.
C.high fixed costs and multiple production facilities.
D.low cost and product customization.
E.local responsiveness and decentralized production.