RIP In Recent Years, Japanese Companies Such as Mitsubishi, NEC, Fujitsu

question 88

Multiple Choice

RIP
In recent years, Japanese companies such as Mitsubishi, NEC, Fujitsu, and Sony began turning to Americans to manufacture Japanese products. While Sony, Panasonic, and other Japanese giants still excel at cranking out high- quality consumer electronics products such as camcorders and TVs by the millions, it's a different story in industries with short product cycles, which require factories that must build what customers order instead of churning out products in anticipation of demand. Japan's great strength, repetitive manufacturing, is becoming its greatest weakness. This production-on-demand form of management cannot depend on JIT. Instead the American companies rely on raw-in-process inventory, or RIP. RIP calls for keeping a reasonable quantity of varied raw materials or components on hand to meet changing customer demand.
-Refer to RIP. Which of the following statements about the American companies who are taking over Japanese operations is true?

• A) The American companies are able to make effective use of kanbans.
• B) Because American companies are more concerned about stockouts, they are less efficient.
• C) Both the Japanese and the American companies rely on independent demand systems to determine inventory requirements.
• D) The American companies have higher holding costs.
• E) All of these statements about the American companies who are taking over Japanese operations are true.

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Definitions:

Discount Rate

The interest rate charged to commercial banks and other financial institutions for loans received from a country's central bank.

Present Value

The present worth of a future sum of money or series of cash flows, based on a given return rate.

Cash Today

Cash Today refers to the availability of funds or capital that can be immediately used or invested, as opposed to future earnings or receivables.

Rate of Return

The augmentation or diminution in an investment's valuation across a specified timeframe, articulated as a fraction of the initial investment expense.