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Global Business Today

Charles W. L. Hill Dr, G. Tomas M. Hult

Chapter 15

Global Production and Supply Chain Management - all with Video Answers

Educators

Chapter Questions

01:25

Problem 1

An electronics firm is considering how best to supply the world market for microprocessors used in consumer and industrial electronic products. A manufacturing plant costs about $$\$ 500$$ million to construct and requires a highly skilled workforce. The total value of the world
market for this product over the next 10 years is estimated to be between $$\$ 10$$ billion and $$\$ 15$$ billion. The tariffs prevailing in this industry are currently low. What kind of location(s) should the firm favor for its plant(s)?

Nick Johnson
Nick Johnson
Numerade Educator
01:25

Problem 2

A chemical firm is considering how best to supply the world market for sulfuric acid. A manufacturing plant costs about $$\$20$$ million to construct and requires a moderately skilled workforce. The total value of the world market for this product over the next 10 years is estimated to be between $$\$ 20$$ billion and $$\$ 30$$ billion. The tariffs prevailing in this industry are moderate. What kind of location(s) should the firm seek for its plant(s)?

Nick Johnson
Nick Johnson
Numerade Educator

Problem 3

A firm must decide whether to make a component part in-house or to contract it out to an independent supplier. Manufacturing the part requires a nonrecoverable investment in specialized assets. The most efficient suppliers are located in countries with currencies that many foreign exchange analysts expect to appreciate substantially over the next decade. What are the pros and cons of $(a)$ manufacturing the component in-house and $(b)$ outsourcing manufacturing to an independent supplier? Which option would you recommend? Why?

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04:12

Problem 4

Reread the Management Focus on Philips in China and then answer the following questions:
a. What are the benefits to Philips of shifting so much of its global production to China?
b. What are the risks associated with a heavy concentration of manufacturing assets in China?
c. What strategies might Philips adopt to maximize the benefits and mitigate the risks associated with moving so much product?

Xiaomin Bian
Xiaomin Bian
Numerade Educator

Problem 5

Explain how the global supply chain functions of (a) logistics and $(b)$ purchasing can be used to strategically leverage the global supply chains for a manufacturing company producing mobile phones.

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Problem 6

What type of interorganizational relationship should a global company consider in the $(a)$ inbound portion of its supply chains if the goal is to buy commodity-oriented component parts for its own production and $(b)$ outbound portion of its supply chains if the goal is to establish a strong partnership in reaching end-customers?

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