Chapter 1 Management accounting in context Choose the one alternative that best completes the statement or answers the question. 1) Management accounting: A) focuses on estimating future revenues, costs, and other measures to forecast activities and their results. B) reports information in accordance with relevant accounting standards. C) provides information to external parties. D) provides information that is generally available only on a quarterly or annual basis. Answer: A AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 2) Financial accounting: A) reports include detailed information on the various operating segments of the business such as product lines or departments. B) focuses on the future and includes activities such as preparing next year’s operating budget. C) is prepared for the use of department heads and other employees. D) must comply with GAAP (generally accepted accounting principles). Answer: D AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 3) Which of the following is MOST likely to use ONLY financial accounting information? A) Vice CEO of operations B) Department manager C) Current shareholder
D) Factory shift supervisor Answer: C AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 4) The person MOST likely to use management accounting information is a(n): A) governmental taxing authority. B) banker evaluating a credit application. C) assembly department supervisor. D) shareholder evaluating a share investment. Answer: C AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 5) Which of the following descriptors refers best to management accounting information? A) It is verifiable and reliable. B) It is prepared for shareholders. C) It is driven by rules. D) It provides reasonable and timely estimates. Answer: D AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 6) Which statement refers best to management accounting information? A) It primarily measures and records business transactions. B) The audience tends to be shareholders, creditors, and tax authorities. C) There are no regulations governing the reports. D) The reports are generally delayed and historical. Answer: C AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role.
7) Management accounting information includes: A) the cost of producing a product. B) tabulated results of customer satisfaction surveys. C) the percentage of units produced that are defective. D) All of these answers are correct. Answer: D AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 8) Management accountants evaluate the costs and revenue benefits of A) strategic B) tactical C) operational D) TQM Answer: D AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 9) Which of these types of information are used in management accounting? A) Financial information B) Information focused on the long term C) Non-financial information D) All of these answers are correct. Answer: D AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 10) Modern cost accounting plays a role in: A) planning new products. B) controlling costs. C) evaluating operational processes. D) All of these answers are correct. Answer: D AACSB: Able to analyse and frame problems
initiatives.
Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 11) A data warehouse or infobarn: A) is primarily used for financial reporting purposes. B) stores information used by different managers for multiple purposes. C) gathers only non-financial information. D) is reserved for exclusive use by the CFO. Answer: B AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 12) Cost accounting provides all of the following EXCEPT: A) pricing information from marketing studies. B) information for management accounting and financial accounting. C) financial information regarding the cost of acquiring resources. D) non-financial information regarding the cost of operational efficiencies. Answer: A AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 13) Financial accounting is concerned PRIMARILY with: A) cost planning and cost controls. B) providing information for strategic and tactical decisions. C) external reporting to investors, creditors, and government authorities. D) profitability analysis. Answer: C AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 14) While financial accounting provides a historical perspective, what does management accounting emphasise? A) past transactions
B) the future C) reports to shareholders D) a current perspective Answer: B AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 15) Which of the following best describes an Enterprise Resource Planning System? A) A database that is primarily used by a purchasing department to determine the correct amount of a particular supply item to purchase B) A sophisticated means of linking two or more companies to facilitate their planning processes C) A single database that collects data and feeds it into applications that support each of the company’s business activities, such as purchases, production, distribution, and sales D) A collection of programs that use a variety of unconnected databases Answer: C AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 16) The approaches and activities of managers in short-run and long-run planning and control decisions that increase value for customers and lower costs of products and services are known as: A) enterprise resource planning. B) customer value management. C) value chain management. D) cost management. Answer: D AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 17) Companies report on their approach to maintaining sustainability in: A) the report on social responsibility. B) the income statement. C) the balance sheet. D) None of the above. Answer: A
AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 18) In most organisations, there are also relationships that managers must understand when they attempt to implement their decisions. A) informal B) strategic C) interpersonal D) tactical Answer: A AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 19) What is the PRIMARY criterion when faced with a resource allocation decision? A) Cost minimisation B) How well the alternative options help achieve organisational goals in relation to the costs incurred for these systems C) Reduction in the amount of time required to perform a particular job D) Achievement of organisational goals Answer: B AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 20) Which of the following statements about the cost-benefit approach is TRUE? A) Resources should be spent if the costs of a decision outweigh the benefits of the decision. B) In a cost-benefit analysis, both costs and benefits are easy to obtain. C) Resources should be spent if they are expected to better attain company goals in relation to the expected costs of these resources. D) A cost-benefit approach would not be appropriate for a decision to install a budget system or not. Answer: C AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role.
21) The person(s) directly responsible for attaining organisational objectives is/are: A) line management. B) the chief financial officer. C) the controller. D) the treasurer. Answer: A AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 22) Where an organisation is large enough to employ both a chief financial officer (CFO) and a management accountant, the management accountant reports to the . A) president B) board of directors C) CEO D) CFO Answer: D AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 23) What has happened to the differences between staff and line management as teamwork has become more prominent in the last few years? A) Have increased. B) Have only been evident in the employee reward system. C) Have become more important relative to promotions. D) Have diminished. Answer: D AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 24) The Chartered Institute of Management Accountants (CIMA): A) issues standards for financial accounting. B) has its headquarters in the USA. C) is a professional organisation of management accountants.
D) is a professional organisation of financial accountants. Answer: C AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 25) What does line management include? A) Information-technology managers B) Management-accounting managers C) Human resource managers D) Manufacturing managers Answer: D AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 26) What does staff management include? A) Human resource managers B) Distribution managers C) Purchasing managers D) Manufacturing managers Answer: A AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 27) Responsibilities of a Chief Financial Officer (CFO ) include all of the following EXCEPT: A) chairing the board of directors. B) supervising the preparation of tax returns. C) managing short-term and long-term financing. D) providing financial reports to shareholders. Answer: A AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role.
28) Who is primarily responsible for management accounting and financial accounting? A) CIO (Chief Information Officer) B) COO (Chief Operating Officer) C) Treasurer D) Chief Management Accounting officer or controller Answer: D AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 29) All of the following report to the Chief Financial Officer (CFO) EXCEPT the: A) Production Manager. B) Company Secretary. C) Chief Management Accountant. D) Tax Department Manager. Answer: A AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 30) Examples of the Chief Management Accountant’s functions include all EXCEPT: A) planning. B) investor relations. C) operations administration. D) budgeting. Answer: B AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 31) Management accounting is an integral part of the A) taxation B) treasury C) internal audit D) None of the above. Answer: D AACSB: Able to analyse and frame problems
function in an organisation.
Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. Write ‘True’ if the statement is correct and ‘False’ is the statement is incorrect. 32) Management accounting information focuses on external reporting. Answer: False AACSB: Able to analyse and frame problems Difficulty: Basic Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 33) Cost management is narrowly focused on a continuous reduction of costs. Answer: False AACSB: Able to analyse and frame problems Difficulty: Basic Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 34) Managers always require the information in an accounting system to be presented in the same format. Answer: False AACSB: Able to analyse and frame problems Difficulty: Basic Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 35) The balance sheet, income statement, and cash flow statement are used for financial accounting, but not for management accounting. Answer: False AACSB: Able to analyse and frame problems Difficulty: Basic Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 36) Cost management provides information that helps increase value for customers. Answer: True AACSB: Able to analyse and frame problems Difficulty: Basic Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role.
37) Management accounting has to strictly follow the rules of generally accepted accounting principles for the purposes of measurement and reporting. Answer: False AACSB: Able to analyse and frame problems Difficulty: Basic Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 38) An ideal database should consist of data that could be used for a single purpose only. Answer: False AACSB: Able to analyse and frame problems Difficulty: Basic Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 39) Cost accounting systems provide information only for management accounting purposes. Answer: False AACSB: Able to analyse and frame problems Difficulty: Basic Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 40) Financial accounting reports financial and non-financial information that helps managers implement company strategies. Answer: False AACSB: Able to analyse and frame problems Difficulty: Basic Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 41) The use of teams to achieve corporate objectives is increasing. Answer: True AACSB: Able to analyse and frame problems Difficulty: Basic Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 42) The chief financial officer (CFO) is usually responsible for banking, short- and long-term financing, investments, and cash management.
Answer: True AACSB: Able to analyse and frame problems Difficulty: Basic Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 43) CPA Australia and the Institute of Chartered Accountants in Australia (ICAA) established the Accounting Professional and Ethical Standards Board. Answer: True AACSB: Able to analyse and frame problems Difficulty: Basic Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. Write your answer in the space provided or on a separate sheet of paper. 44) For each report listed below, identify whether the major purpose of the report is for (1) routine internal reporting, (2) non-routine internal reporting, or for (3) external reporting to investors and other outside parties. Item: a. study detailing sale information of the top-ten selling products b. weekly report of total sales generated by each store in the metropolitan area c. annual report sent to shareholders d. monthly report comparing budgeted sales by store to actual sales
Answer: a. (2) non-routine internal reporting b. (1) routine internal reporting c. (3) external reporting to investors and other outside parties d. (1) routine internal reporting AACSB: Able to communicate effectively orally and in writing Difficulty: Complex Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 45) Describe management accounting and financial accounting.
Answer: Management accounting provides information to internal decision makers of the business such as top executives, managers, sales representatives, and production supervisors. Its purpose is to help managers predict and evaluate future results. Reports are generated often and are usually broken down into smaller reporting divisions such as department or product line. There are no rules to be complied with since these reports are for internal use only. Management accounting embraces more extensively such topics as the development and implementation of strategies and policies, budgeting, special studies and forecasts, influence on employee behaviour, and non-financial as well as financial information. Financial accounting, by contrast, provides information to external decision makers such as investors and creditors. Its purpose is to present a fair picture of the financial condition of the company. Reports are generated quarterly or annually and report on the company as a whole. The financial statements must comply with GAAP (generally accepted accounting principles). An accountant audits, or verifies, that the GAAP are being followed. AACSB: Able to communicate effectively orally and in writing Difficulty: Complex Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 46) Is financial accounting or management accounting more useful to an operations manager? Why?
Answer: Management accounting is more useful to an operations manager because management accounting reports operating results by department or unit rather than for the company as a whole, it includes financial as well as non-financial data such as on-time deliveries and cycle times, and it includes quantitative as well as qualitative data such as the type of rework that was needed on defective units. AACSB: Able to communicate effectively orally and in writing Difficulty: Complex Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 47) Is it possible to have an active cost management program without an Enterprise Resource Planning (ERP) System?
Answer: Yes, an active cost management program can occur without an Enterprise Resource Planning (ERP) System. Cost management is a philosophy that guides management in their short-run and long-run planning and control decisions that increase value for customers and lower costs of products and services. Cost management is not dependent on any particular system or database, but it is rather an overall
philosophy of operation. AACSB: Able to communicate effectively orally and in writing Difficulty: Complex Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 48) What competitive advantage could a company obtain from a successful cost management program?
Answer: There are three broad outcomes from a successful cost management program: 1) costs are reduced with no loss in customer value. In this scenario, a company might gain a competitive advantage by lowering its price with no loss in profit, or maintain the same price and increase profit; 2) customer value is increased with no change in costs. This scenario might increase customer satisfaction resulting in increased customer loyalty and perhaps increase the overall demand for the product; 3) customer value might be increased while costs are reduced simultaneously. This scenario would result in the benefits described in both 1) and 2). AACSB: Able to communicate effectively orally and in writing Difficulty: Complex Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 49) Discuss the cost-benefit approach guideline management accountants use to provide value in strategic decision making.
Answer: Management accountants continually face resource allocation decisions. The cost-benefit approach should be used in making these decisions. Resources should be spent if the expected benefits to the company exceed the expected costs. The expected benefits and costs may not be easy to quantify, but it is a useful approach for making resource allocation decisions. AACSB: Able to communicate effectively orally and in writing Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 50) Discuss the potential behaviour implications of performance evaluation.
Answer:
As measurements are made on operations and, especially, on individuals and groups, the behaviour of the individuals and groups are affected. People react to the measurements being made. They will focus on those variables or the behaviour being measured and spend less attention on variables and behaviour that are not measured. In addition, if managers attempt to introduce or redesign cost and performance measurement systems, people familiar with the previous system will resist. Management accountants must understand and anticipate the reactions of individuals to information and measurements. The design and introduction of new measurements and systems must be accompanied with an analysis of the likely reactions to the innovations. AACSB: Able to communicate effectively orally and in writing Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 51) What areas of responsibility does a Chief Financial Officer (CFO) have in a typical organisation?
Answer: The responsibilities vary among organisations, but generally include the following areas: controllership, treasury, risk management, taxation, investor relations, and internal audit. AACSB: Able to communicate effectively orally and in writing Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. 52) How does a controller help ‘control’ a company?
Answer: By reporting and interpreting relevant data, the controller exerts a force or influence that impels management toward making better-informed decisions. The controller of Caterpillar described the job as ‘a business advisor to...help the team develop strategy and focus the team all the way through recommendations and implementation’. AACSB: Able to communicate effectively orally and in writing Difficulty: Moderate Topic: Management accounting and its role Learning Objective: 1.1 Describe management accounting and explain its role. Choose the one alternative that best completes the statement or answers the question. 53) are those functions, activities or business practices, defined by the market not the company, and as viewed by the customer, that are critical to the vendor/customer relationship.
A) Operations B) Cycles C) Tactics D) Key success factors Answer: D AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: The supply chain, the value chain and key success factors Learning Objective: 1.2 Describe the constituents of the value chain, how the value chain relates to the supply chain, and the dimensions of performance that customers expect. 54) Key success factors can exist in both the areas and the condition or circumstances of the company. A) cultural B) structural C) functional D) logistical Answer: C AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: The supply chain, the value chain and key success factors Learning Objective: 1.2 Describe the constituents of the value chain, how the value chain relates to the supply chain, and the dimensions of performance that customers expect. 55) Management accountants calculate a cost for a product by subtracting the operating profit per unit of product that the company thinks it can earn from the ‘target price’. A) reasonable B) target C) systematic D) estimated Answer: B AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: The supply chain, the value chain and key success factors Learning Objective: 1.2 Describe the constituents of the value chain, how the value chain relates to the supply chain, and the dimensions of performance that customers expect. 56) New product development time is the time it takes for market. A) old
products to be created and brought to
B) obsolete C) all D) new Answer: D AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: The supply chain, the value chain and key success factors Learning Objective: 1.2 Describe the constituents of the value chain, how the value chain relates to the supply chain, and the dimensions of performance that customers expect. 57) Place the four business functions in the order they appear along the value chain: A = Customer service B = Design C = Distribution D = Production A) B A D C B) A B D C C) A C D B D) B D C A Answer: D AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: The supply chain, the value chain and key success factors Learning Objective: 1.2 Describe the constituents of the value chain, how the value chain relates to the supply chain, and the dimensions of performance that customers expect. 58) What are R&D, production, and customer service as business functions included as part of? A) Marketing B) Benchmarking C) The supply chain D) The value chain Answer: D AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: The supply chain, the value chain and key success factors Learning Objective: 1.2 Describe the constituents of the value chain, how the value chain relates to the supply chain, and the dimensions of performance that customers expect. 59) The value chain is the sequence of business functions in which: A) value is deducted from the products or services of an organisation.
B) products and services are evaluated with respect to their value to the supply chain. C) usefulness is added to the products or services of an organisation. D) value is proportionately added to the products or services of an organisation. Answer: C AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: The supply chain, the value chain and key success factors Learning Objective: 1.2 Describe the constituents of the value chain, how the value chain relates to the supply chain, and the dimensions of performance that customers expect. 60) Which of the following involves the generation of, and experimentation with, ideas related to new products, services, or processes? A) Design of products, services, or processes B) Marketing C) Research and development D) Production Answer: C AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: The supply chain, the value chain and key success factors Learning Objective: 1.2 Describe the constituents of the value chain, how the value chain relates to the supply chain, and the dimensions of performance that customers expect. 61) Companies use the term to describe a strategy that integrates people and technology in all business functions to enhance relationships with customers, partners and distributors. A) cost leadership B) product differentiation C) market penetration D) customer relationship management Answer: D AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: The supply chain, the value chain and key success factors Learning Objective: 1.2 Describe the constituents of the value chain, how the value chain relates to the supply chain, and the dimensions of performance that customers expect. 62) is the acquisition, coordination, and assembly of resources to produce a product or deliver a service. A) Production B) Research and development
C) Marketing D) Customer service Answer: A AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: The supply chain, the value chain and key success factors Learning Objective: 1.2 Describe the constituents of the value chain, how the value chain relates to the supply chain, and the dimensions of performance that customers expect. 63) is the manner by which companies promote and sell their products or services to customers or prospective customers. A) Customer service B) Distribution C) Research and development D) Marketing Answer: D AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: The supply chain, the value chain and key success factors Learning Objective: 1.2 Describe the constituents of the value chain, how the value chain relates to the supply chain, and the dimensions of performance that customers expect. 64) is the delivery of products or services to customers. A) Distribution B) Production C) Customer service D) Design of products, services, or processes Answer: A AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: The supply chain, the value chain and key success factors Learning Objective: 1.2 Describe the constituents of the value chain, how the value chain relates to the supply chain, and the dimensions of performance that customers expect. 65) is the after-sale support provided to customers. A) Marketing B) Production C) Customer service D) Distribution Answer: C
AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: The supply chain, the value chain and key success factors Learning Objective: 1.2 Describe the constituents of the value chain, how the value chain relates to the supply chain, and the dimensions of performance that customers expect. 66) The function in the value chain concerned with promoting and selling products or services to customers is: A) marketing. B) customer service. C) production. D) distribution. Answer: A AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: The supply chain, the value chain and key success factors Learning Objective: 1.2 Describe the constituents of the value chain, how the value chain relates to the supply chain, and the dimensions of performance that customers expect. 67) Customer relationship management initiatives use technology to coordinate all: A) inventory management activities. B) production activities. C) customer-facing activities. D) research activities. Answer: C AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: The supply chain, the value chain and key success factors Learning Objective: 1.2 Describe the constituents of the value chain, how the value chain relates to the supply chain, and the dimensions of performance that customers expect. 68) Companies gain (in terms of cost, quality and the speed with which new products are developed) if of the individual business functions of the value chain work concurrently as a team. A) two or more B) one or more C) three or more D) four or more Answer: A AACSB: Able to analyse and frame problems Difficulty: Moderate
Topic: The supply chain, the value chain and key success factors Learning Objective: 1.2 Describe the constituents of the value chain, how the value chain relates to the supply chain, and the dimensions of performance that customers expect. 69) focus on internal activities, practices and functions. A) Core competencies B) Key success factors C) Strategies D) Values Answer: A AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: The supply chain, the value chain and key success factors Learning Objective: 1.2 Describe the constituents of the value chain, how the value chain relates to the supply chain, and the dimensions of performance that customers expect. 70) When are aligned with key success factors, the value of the business relationship blossoms and grows for the benefit of both the company and the customer. A) strategies B) values C) cores competencies D) ethics Answer: C AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: The supply chain, the value chain and key success factors Learning Objective: 1.2 Describe the constituents of the value chain, how the value chain relates to the supply chain, and the dimensions of performance that customers expect. 71) Key success factors can exist in both the areas and the condition or circumstances of the company. A) dynamic B) functional C) static D) organisational Answer: B AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: The supply chain, the value chain and key success factors Learning Objective: 1.2 Describe the constituents of the value chain, how the value chain relates to the
supply chain, and the dimensions of performance that customers expect. 72) Strategy should focus PRIMARILY on the organisation’s: A) customers. B) products. C) employees. D) shareholders. Answer: A AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: The supply chain, the value chain and key success factors Learning Objective: 1.2 Describe the constituents of the value chain, how the value chain relates to the supply chain, and the dimensions of performance that customers expect. 73) Whose perceptions of the company’s products or services are most important to the manager? A) chairman of the boards’ perception B) board of directors’ perception C) shareholders’ perception D) customers’ perception Answer: D AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: The supply chain, the value chain and key success factors Learning Objective: 1.2 Describe the constituents of the value chain, how the value chain relates to the supply chain, and the dimensions of performance that customers expect. 74) A company needs to be to be successful. A) ‘driven’ by the board of directors B) management-driven C) employee-driven D) customer-driven Answer: D AACSB: Able to analyse and frame problems Difficulty: Moderate Topic: The supply chain, the value chain and key success factors Learning Objective: 1.2 Describe the constituents of the value chain, how the value chain relates to the supply chain, and the dimensions of performance that customers expect. 75) Customers generally demand improved performance related to: A) both reduced costs and increased quality.