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| 1. Increasing the promotional budget for a product in order to increase awareness is not advisable in the short run under which of the following circumstances? |
| Select: 1 |
| One or more competitor has increased price |
| Demand in the segment is increasing |
| Production capacity is maxed out (200% plant utilization) and the company is stocking out of the product |
| Accessibility is less than 80%
2.
| Chester’s product manager is considering lowering the price of the Cat product by $2.50 and wants to know what the impact will be on the product’s contribution margin. Assuming no inventory carry costs, what will Cat’s contribution margin be if the price is lowered? |
| Select: 1 |
| 34.00% |
| 32.30% |
| 29.99% |
| 31.57%
3.
| According to information found on the production analysis page of the Inquirer, Digby sold 1129 units of Dim in the current year. Assuming that Dim maintains a constant market share, all the units of Dim are sold in the Nano market segment and the growth rate remains constant, how many years will it be before Dim will not be able to meet future demand unless the company adds production capacity? Exclude any existing inventory. |
| Select: 1 |
| 2 year(s) |
| 3 year(s) |
| 1 year(s) |
| 4 year(s)
4.
| Which description best fits Andrews? For clarity:
– A differentiator competes through good designs, high awareness, and easy accessibility.
– A cost leader competes on price by reducing costs and passing the savings to customers.
– A broad player competes in all parts of the market.
– A niche player competes in selected parts of the market.
Which of these four statements best describes your company’s current strategy? |
| Select: 1 |
| Andrews is a niche cost leader |
| Andrews is a broad cost leader |
| Andrews is a broad differentiator |
| Andrews is a niche differentiator
5.
| Don is a product of the Digby company. Digby’s sales forecast for Don is 506 units. Digby wants to have an extra 10% of units on hand above and beyond their forecast in case sales are better than expected. (They would risk the possibility of excess inventory carrying charges rather than risk lost profits on a stock out.) Taking current inventory into account, what will Don’s Production After Adjustment have to be in order to have a 10% reserve of units available for sale? |
| Select: 1 |
| 364 units |
| 557 units |
| 415 units |
| 506 units
6.
| Demand is created through meeting customer buying criteria, credit terms, awareness (promotion) and accessibility (distribution). According to the Thrift segment’s customers, which of these products was the most competitive at the end of last year? |
| Select: 1 |
| Ate |
| Bill |
| Boat |
| Cone
7.
| Digby currently has $17,624 (000) in cash and management has decided to issue stocks and bonds worth an additional $8,000 (000). Assuming that cash from operations will be the same for each of the following activities, which activity exposes this company to the most risk of being issued an emergency loan? |
| Select: 1 |
| Retiring the oldest bond |
| Liquidate the entire inventory |
| Purchasing $18,000 (000) worth of plant and equipment |
| A $5 dividend
8.
| Creak is a product of the Chester company which is primarily in the Nano segment, but is also sold in another segment. Chester starts to create their sales forecast by assuming all policies (R&D, Marketing, and Production) for all competitors are equal this year over last. For this question assume that all 700 of units of Creak are sold in the Nano segment. If the competitive environment remains unchanged what will be the Creak product’s demand next year (in 000’s)? |
| Select: 1 |
| 798 |
| 700 |
| 1596 |
| 749
9.
| A productivity index of 110% means that a company’s labor costs would have been 10% higher if it had not made production improvements. Assume that Baldwin had a productivity index of 112% and that Chester had a productivity index of 103%. Now refer to the Income Statements in the Annual Report for Baldwin and Chester. Using the labor costs shown in the Income Statements, how much more did Baldwin save in direct labor costs compared to Chester by having a higher productivity index? |
| Select: 1 |
| $2,879 |
| $3,359 |
| $3,519 |
| $3,199
10.
Investing $1,500,000 in TQM’s Channel Support Systems initiative will at a minimum increase demand for your products 1.7% in this and in all future rounds. (Refer to the TQM Initiative worksheet in the CompXM Decisions menu.) Looking at the Round 0 Inquirer for Andrews, last year’s sales were $163,712,225. Assuming similar sales next year, the 1.7% increase in demand will provide $2,783,108 of additional revenue. With the overall contribution margin of 34.2%, after direct costs this revenue will add $951,823 to the bottom line. For simplicity, assume that the demand increase and margins will remain at last year’s levels. How long will it take to achieve payback on the initial $1,500,000 TQM investment, rounded to the nearest month?Select: 1
| 6 months |
| 13 months |
| 19 months |
| TQM investment will not have a significant financial impact |
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