The supply chain for an organization is the network of enterprises that the organization uses to deliver products to the consumer. It includes the organization itself, its suppliers and suppliers of its suppliers, any down steam operations that may process the products further, and distributors, wholesalers, retailers, and transportation systems. Global supply chain or global operations management is when the chain expands over more than one country.

1. While selecting a factory location in a foreign country, consideration should be given to

A. Culture B. Legal systemC. Monetary policiesD. Transportation infrastructureE. All answers are correct

2. Which of the following represent reasons for global operations?

A. To gain improvements in the supply chainB. To improve operationsC. To expand a product's life cycleD. To attract and retain global talentE. All answers are correct

3. McDonald’s includes beer in its menu for German franchises. This is an example of which of the following considerations for global operations:

A. Cultural transferability B. Network developmentC. Host government policyD. Labor normsE. All answers are correct

4. Which of the following is a risk of global operations management?

A. Intellectual rights issuesB. Contract compliance issuesC. Quality issuesD. Sustainability issuesE. All answers are correct

5. Which of the following is not an exclusive characteristic of global supply chains in comparison to domestic operations: 

A. Language and cultural differencesB. Currency fluctuationsC. Increase transportation costs and lead timesD. Increase need for trust and cooperation among supply

chains partnersE. Technological advances in telecommunications

6. Which of the following is a factor that drives the globalization of operations and supply chain management?

A. Availability of low-cost, high-quality labors in foreign countries

B. Growth in foreign-market demand C. Advances in communication and transportation

technologyD. Penetration of foreign companies into local markets E. All answers are correct

7. The network model of the physical goods supply chain contains all but one of the following elements.

A. CompetitorB. DistributorC. RetailerD. CustomerE. Supplier 

8. Which of the following represents reasons for globalizing operations?

A. Gain improvements in supply chainB. Improve operationsC. Expand product life cycleD. Attract and retain global talentE. All answers are correct

9. Multinational organizations can shop from country to country and cut costs through

F. Lower wage scalesG. Lower indirect labor costsH. Less stringent regulationsI. Lower taxes and tariffsJ. All answers are correct

 

10. Offshoring is a global operations strategy that involves moving processes to another country. Which of the following statement related with offshoring is true?

A. Firms can reduce labor costs by outsourcing processes to low labor-cost countries

B. Firms can reduce the logistical costs of delivering products to international customers by offshoring

C. Firms can avoid tariffs by assembling the products in other countries rather than exporting them

D. Offshoring may not be the best choice, even if local labor wages far exceed those of other countries

E. All answers are correct  

11. A company wants to build a major warehouse in Europe. Four locations are being considered. The following table shows the important factors to bring into account along with the importance level (weight) of each factor. The attractiveness of each location relative to each factor is indicated on a 0-100 point scale. Find the best location.

Factor (weight) Germany France Belgium Netherlands

Transportation costs (0.3) 70 90 50 50

Operating costs (0.3) 60 70 60 70

Construction costs (0.3) 70 30 70 70

Business environments (0.1) 80 50 60 50

A. GermanyB. FranceC. BelgiumD. NetherlandE. Both Belgium and

France

G: 0.3(70)+0.3(60)+0.3(70)+0.1(80) =21+18+21+8 = 68 F: : 0.3(90)+0.3(70)+0.3(30)+0.1(50) =27+21+9+5 = 62B: : 0.3(50)+0.3(60)+0.3(70)+0.1(60) =15+18+21+6 =60N: : 0.3(50)+0.3(70)+0.3(70)+0.1(50) =15+21+21+5 = 62

12. A manufacturer of men’s shirts can produce shirts in its Houston plant for $6 per shirt. Chicago is a major market for 100,000 shirts per year. Transportation and storage charges from Houston and Chicago amount to $5 per 100 pounds. Each packaged shirt weighs 1 pound. As an alternative, the company can have the shirts produced in China for $4 per shirt. The raw materials would be shipped from Houston to China at a cost of $10 per 100 pounds. When the shirts are completed, they are to be shipped directly to Chicago at a transportation and storage cost of $16 per 100 pounds. An import duty of $0.5 per shirt is assessed. Where should the shirts be produced and at what costs.. 

A. Houston; $805,000B. China; $458,000C. Houston; $605,000D. China; $476,000E. None of the above

Houston: 6+0.05 = 6.05 (100,000) = 605000China: 4+0.1+0.16+0.5 = 4.76(100000) = 476000