ABDM3234 International Business Planning

Tutorial 11
Chapter 15 Managing International Operations
Multiple Choice Questions
1. 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
2. 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 particular location than elsewhere.
D) They are restricted to business activities that involve product manufacturing.
3. ________ refers to the concentration of production facilities in one location.
A) Lean production
B) Continuous production
C) Centralized production
D) Horizontal integration
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.
A) Continuous production
B) Decentralized production
C) Vertical integration
D) Lean production
5. 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
6. 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

7. . 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
8. 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 products for each customer
9. 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
10. 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
11. 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 product increases the company's flexibility to respond to market conditions.
D) Making a product gives companies a great deal of power in their relationships with suppliers.
12. 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 making the
product in-house.
C) Buying a product ensures non-flexibility to local market conditions.
D) Buying a product enables a company to gain a great deal of power in their relationships with
suppliers.
13. ________ 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
14. 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

Structural Essay Questions

15. What is the concept of location economies and how important is it to facilities location
planning?
16. What are some of the considerations that underlie the reinvest-versus-divest decision?
17. Discuss why companies strive toward quality improvement and the two methods of doing so.
18. What are the options available to companies seeking financial resources?