Question

36-42

So. According to the concept of economies of scale, as plant output expands A) productivity declines B) total cost decrease C) unit costs decrease D) utilization of capital declines. allows the company to produce a wider variety of end products at a unit cost that at one time could be achieved only through the mass production of a standardized output A) Standardization B) Kaizen C) Six Sigma D) Lean production 37. 38. A flexible machine cell is A) a component of a source factory. B) used to perform a standardized operation. C) a component of a lead factory. D) a grouping of various types of machinery, a common materials handler, and a centralized cell controller. 39. Decentralization of production is appropriate when A) the product's value-to-weight ratio is high. B) location externalities are important. C) the product serves universal needs. D) volatility in important exchange rates is expected. 40. There are five strategic levels for global purchasing that can be undertaken by a global company. At which level do companies engage in global purchasing activities that are integrated across worldwide locations and functional groups? A) Level II B) Level III C) Level IV D) Level V hatween the producer and the consumer is known as the

Answer 1

36) According to the concept of economies of scale,as plant output expands:

• c) unit cost decreases

Economies of scale is said to be achieved by a company when more units of goods/services can be produced on a larger scale with less input costs. These are basically the cost advantages obtained as a result of scale of operations, with decreasing cost per unit with increasing scale.

37)Lean Production allows the company to produce a wide variety of end products at a unit cost that at one time could be achieved only through the mass production of a standardized product.

Lean Production is an approach which focuses on minimization of waste, whilst ensuring quality. It ensures efficiency and prevents overproduction.

38)A flexible machine cell is: a grouping of various types of machinery, a common materials handler and a centralized cell controller.

39)Decentralization of production is appropriate when:

d) volatility in important exchange rate is expected.

Decentralization refers to the process of splitting up of manufacturing into different locations. In the process, the decision making authority is assigned to more number of managers. The volatile exchange rates make the process of international trade difficult. Hence, decentralization is the most appropriate solution in such a case.