Question 1

Rinker Audio Products sources raw materials from six different suppliers around the world.These inputs are stored in Rinker-owned warehouses close to its manufacturing facility in Canton,Ohio.What part of the global supply chain do the suppliers and inputs warehouse together constitute?

Accepted Answer

The suppliers and inputs warehouse are part of the upstream portion of the global supply chain, which is focused on sourcing and acquiring raw materials and other inputs. This is distinct from the downstream, which includes activities related to production, distribution, and sales.

Question 2

The drawback of a just-in-time inventory system is that it leaves a firm with excess unsold inventory that it has to write off against earnings or price low to sell.

Accepted Answer

The drawback of a just-in-time inventory system is actually the opposite. It can leave a firm with insufficient inventory to meet demand if there are disruptions in the supply chain.

Question 3

Other things being equal,when fixed costs are substantial and minimum efficient scale of production is high,the arguments for concentrating production at a few choice locations are strong.

Accepted Answer

When fixed costs are high, spreading production facilities over multiple locations may result in higher costs due to duplication of fixed costs. Additionally, having a few concentrated locations can lead to economies of scale, further reducing costs. Therefore, the arguments for concentration of production in such situations are strong.

Question 4

Champion Works Inc.is an animation company,headquartered in the United States.The CEO of the company has decided to outsource some of the production to companies in developing countries,as the firm seems to be losing out on its competitive advantage.This decision to shift functions or processes to less developed countries is most likely due to their

Accepted Answer

The CEO's decision to outsource some of the production to companies in developing countries is most likely due to lower labor costs in these countries, which can help the company maintain its competitive advantage. While other factors like access to better technology or sophisticated infrastructure may also be important, the focus on outsourcing suggests that cost-saving is a primary motivation. Additionally, strong intellectual property rights laws and currency appreciation are unlikely to be driving factors for outsourcing.

Question 5

Which of the following statements is true of Six Sigma?

Accepted Answer

Six Sigma aims for near perfection, with a goal of no more than 3.4 defects per million opportunities. While challenging, achieving Six Sigma is not impossible, but it requires rigorous process improvement and control.

Question 6

Which of the following best describes the relationship between the number of "sigmas" and the number of errors?

Accepted Answer

The relationship between the number of "sigmas" and the number of errors is inverse. As the number of "sigmas" increases, the process becomes more stable and the number of errors decreases. Therefore, the higher the number of "sigmas," the smaller the number of errors.

Question 7

Under a just-in-time inventory system,a company can reduce the amount of working capital it needs to finance inventory,freeing capital for other uses and/or lowering the total capital requirements of the enterprise.

Accepted Answer

A just-in-time inventory system allows companies to reduce the amount of inventory they need to hold, which in turn reduces the amount of working capital needed to finance that inventory. This frees up capital for other uses or lowers the total capital requirements of the enterprise. Therefore, the statement is true.

Question 8

Manufacturing firms should typically aim at lowering the costs of value creation by

Accepted Answer

Manufacturing firms should aim to reduce the cost of value creation by reducing production costs. This can be achieved by improving production processes, reducing waste, optimizing supply chain management, and investing in cost-saving technologies. Lowering the quality of products or increasing after-sales services cost may negatively impact customer satisfaction and loyalty, which can ultimately harm the company's bottom line. Similarly, stocking huge amounts of inventory can lead to increased storage and handling costs, which can offset any benefits gained from economies of scale. Decreasing inventory turnover also increases storage costs and can lead to stockouts, which can negatively impact customer satisfaction.

Question 9

The effect of improved quality control is to lower the costs of value creation by reducing production costs and

Accepted Answer

Improved quality control results in fewer defects and therefore, lower after-sales service costs. Options A, C, D, and E are opposite effects of improved quality control.

Question 10

Which of the following is a philosophy that was widely adopted,first by Japanese companies and then American companies during the 1980s and early 1990s and from which the Six Sigma methodology directly descended?

Accepted Answer

The philosophy widely adopted first by Japanese companies and then American companies during the 1980s and early 1990s is total quality management, from which the Six Sigma methodology directly descended.

Question 11

An important objective shared by both production and logistics functions of an international firm is to

Accepted Answer

Both production and logistics functions of an international firm aim to optimize the supply chain, reduce costs and improve efficiency. One way to achieve this is by dispersing production activities, i.e., locating production facilities closer to raw materials or resources, reducing transportation costs, and boosting agility in responding to changing market demands.

Question 12

Rinker Audio Products has had recurring problems in its product quality.The company's manufacturing vice president suggests that Rinker use a statistically based methodology that aims to reduce defects,boost productivity,eliminate waste,and cut costs throughout the company and whose ultimate goal would be to have just 3.4 defects per million units that Rinker produces.What is the methodology that the manufacturing vice president is considering?

Accepted Answer

Six Sigma is a statistically based methodology that aims to reduce defects, boost productivity, eliminate waste, and cut costs throughout the company. Its ultimate goal is to have just 3.4 defects per million units produced. Therefore, it is the best choice for the manufacturing vice president to consider for reducing product quality problems at Rinker Audio Products.

Question 13

Six Sigma refers to a statistically based philosophy that aims to

Accepted Answer

Six Sigma aims to eliminate waste by identifying and removing defects and minimizing variability in processes.

Question 14

Firms now typically use electronic data interchange (EDI)via the Internet to coordinate the flow of materials into manufacturing,through manufacturing,and out to customers.

Accepted Answer

Electronic data interchange (EDI) is commonly used by firms to coordinate the flow of materials, manufacturing, and distribution through the use of the Internet.

Question 15

_____ is a statistically based philosophy that aims to reduce defects,boost productivity,eliminate waste,and cut costs throughout a company.

Accepted Answer

The philosophy of Six Sigma is built on statistical methods that aim to reduce defects and variation in processes, increase productivity, eliminate waste and ultimately cut costs throughout a company. ISO 9000 is a family of quality management standards, Just-in-time is a production strategy, Lean production is focused on minimizing waste, and Upstreaming refers to shifting the focus to earlier stages in the value chain.

Question 16

A second strategic objective shared by production and supply chain management is to increase product quality.In this context,quality means

Accepted Answer

Quality in this context refers to the reliability of the product, meaning that it performs consistently to meet or exceed customer expectations. Affordability, flexibility, adaptability, and patentability are all important factors but do not directly relate to product quality.

Question 17

Rinker Audio Products has a fully-staffed purchasing department that procures various inputs.It also has various domestic manufacturing facilities that coordinate with the purchasing department.Rinker's distribution function coordinates the shipment of finished products.Taken together,Rinker Audio Products' purchasing,manufacturing,and distribution functions constitute the company's

Accepted Answer

The purchasing, manufacturing, and distribution functions together constitute the company's logistics, which is the management of the flow of goods from the point of origin to the point of consumption.

Question 18

Rinker Audio Products wants to adopt the total quality management (TQM)philosophy as developed by,among others,W.Edwards Deming.The company employees are,however,confused as to what TQM entails.As a consultant,you are helping Rinker's employees understand TQM as it would impact them.Which of the following is true of W.Edward Deming's beliefs about the total quality management philosophy?

Accepted Answer

DDeming believed in improving the quality of supervision and emphasized the importance of top management's commitment to achieving better quality.

Question 19

Rinker Audio Products stores its finished goods in various warehouses around the United States and in international locations.The company's sales function coordinates with 47 wholesalers who,in turn,ensure that Rinker's products are available in 750 retail outlets worldwide.When taken together,what portion of Rinker's global supply chain do its distributors and retailers constitute?

Accepted Answer

Distributors and retailers are part of the downstream portion of the supply chain, which involves the final stages of getting the product to the end consumer. Upstream refers to the earlier stages of the supply chain such as raw materials and manufacturing, while horizontal and inward-facing do not accurately describe the role of the distributors and retailers. Process refers to the overall system of activities involved in creating and delivering a product, rather than a specific stage of the supply chain.

Question 20

Since refined sugar has a low value-to-weight ratio,even if it is shipped halfway around the world,the transportation costs would account for a very small percentage of total costs.

Accepted Answer

The answer of Since refined sugar has a low value-to-weight...

Quiz 15: Global Production and Supply Chain Management