Business School 101 Quiz

What are the two main groups of factors, besides country-level environmental factors, that influence a firm's decision on where to locate production?

• Technological and product factors

• Legal and regulatory factors

• Economic and political factors

• Cultural and social factors

Why might a firm choose to centralize production in a single location?

• To avoid exchange rate fluctuations

• To minimize high fixed costs

• To serve local markets more effectively

• To increase dependency on one location

What is the minimum efficient scale in production?

• The smallest output level to achieve all major scale economies

• The maximum output level before costs increase

• The average output level for global demand

• The output level where fixed costs are minimized

How does a flexible manufacturing system benefit a company?

• By reducing the need for skilled labor

• By increasing the minimum efficient scale

• By lowering initial setup costs

• By allowing easy adaptation to product changes

What is a high value-to-weight ratio indicative of in terms of production location?

• The product is inexpensive to transport

• The product should be produced close to major markets

• The product requires decentralized production

• The product can be produced in a centralized location

Which product feature reduces the need for local responsiveness?

• High value-to-weight ratio

• High transportation costs

• Universal needs

• Low production costs

When is decentralization of production most appropriate?

• When fixed costs are high

• When there are significant differences in consumer preferences

• When exchange rates are stable

• When trade barriers are low

What is a potential downside of basing production in a foreign location?

• Increased local market responsiveness

• Higher employee turnover

• Lower transportation costs

• Stable exchange rates

Why did Microsoft choose Hyderabad for its facility?

• Low employee turnover

• Proximity to major markets

• Lower wage rates and skilled workforce

• High value-to-weight ratio of products

What challenge did Microsoft face in Hyderabad despite its strategic advantages?

• High employee turnover

• Low demand for software programmers

• High transportation costs

• Lack of skilled workforce