#1. A productivity index of 110% means that a company’s labor costs would have been 10% higher if it
had not made production improvements. Now refer to the Income Statement in Digby's Annual Report.
The direct labor costs for Digby were $32,558. These labor costs could have been $20,000 higher if
investments in training that increased productivity had not been made. What was the productivity index
for Digby that led to such savings?
Select: 1
44.7%
38.6%
161.4%
155.3%
#2. 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
$163,290,917. Assuming similar sales next year, the 1.7% increase in demand will provide $2,775,946 of
additional revenue. With the overall contribution margin of 34.1%, after direct costs this revenue will
add $946,598 to the bottom line. For simplicity, assume that the demand increase and margins will
emain 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
13 months
6 months
19 months
TQM investment will not have a significant financial impact
#3. Brand managers know that increasing promotional budgets eventually result in diminishing returns.
The first one million dollars typically results in a 26% increase in awareness, while the second million
esults in adding another 18% and the third million in a 5% increase. Andrews’s product Ate cu
ently
has an awareness level of 79% . While an important product for Andrews, Ate’s promotion budget will
e reduced to one million dollars for the upcoming year. Assuming that Ate loses one-third of its
awareness each year, what will Ate’s awareness level be next year?
Select: 1
53%
74%
58%
79%
#4. Beetle's product manager is under pressure to increase market share, but is uncertain about how to
make the product more competitive. The product is reasonably well-positioned in the Thrift segment
and enjoys relatively high awareness and accessibility. Which of the following would most likely result in
a quick increase in market share?
Select: 1
Lower the unit selling price to the bottom limit of the segment price range
Re-position the product to the ideal spot within the segment
Increase awareness by 5%
Increase the unit contribution margin by decreasing the MTBF
#5. Assuming no direct factory overhead costs (i.e., inventory ca
y costs) and $3 million dollars in
combined promotion and sales budget, the Best product manager wishes to achieve a product
contribution margin of 35%. Given their product cu
ently is priced at $35.00, what would they need to
limit the material and labor costs to?
Select: 1
$21.00
$22.75
$24.50
$23.00
#6. According to information found on the production analysis page of the Inquirer, Chester sold 1127
units of Cent in the cu
ent year. Assuming that Cent maintains a constant market share, all the units of
Cent are sold in the Nano market segment and the growth rate remains constant, how many years will it
e before Cent will not be able to meet future demand unless the company adds production capacity?
Exclude any existing inventory.
Select: 1
2 year(s)
4 year(s)
3 year(s)
1 year(s)
#7. Which description best fits Digby? 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
oad 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 this competitor?
Select: 1
Digby is a niche cost leader
Digby is a
oad cost leader
Digby is a
oad differentiator
Digby is a niche differentiato
#8. Dim is a product of the Digby company. Digby's sales forecast for Dim is 1855 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 ca
ying charges rather than risk lost
profits on a stock out.) Taking cu
ent inventory into account, what will Dim's Production After
Adjustment have to be in order to have a 10% reserve of units available for sale?
Select: 1
1565 units
1855 units
2040 units
1750 units
#9. Boat is a product of the Baldwin company which is primarily in the Nano segment, but is also sold in
another segment. Baldwin 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 Boat are sold in the Nano segment. If the competitive environment remains unchanged what
will be the Boat product’s demand next year (in 000’s)?
Select: 1
749
798
700
1596
#10. Looking forward to next year, if Chester’s cu
ent cash balance is $19, XXXXXXXXXXand cash flows from
operations next period are unchanged from this period, and Chester takes ONLY the following actions
elating to cash flows from investing and financing activities:
Issues XXXXXXXXXXshares of stock at the cu
ent stock price
Issues $ XXXXXXXXXXin bonds
Retires $10, XXXXXXXXXXin debt
Which of the following activities will expose Chester to the most risk of needing an emergency loan?
Select: 1
Purchases assets at a cost of $25, XXXXXXXXXX)
Pays a $5.00 per share dividend
Liquidates the entire inventory
Sells $10, XXXXXXXXXXof their long-term assets