Question 1

Benchmarking can be defined as the practice of:
A) monitoring activities related to the design, creation, and delivery of a product, its marketing, and its support and after-sales service.
B) developing products that are new to the world or have superior attributes to existing products in the market.
C) measuring the time that it takes for a good to be delivered or a service to be performed.
D) measuring how well a company is doing by comparing it to another company, or to itself, over time.
E) analyzing the financial position of a company and creating the income statements and the balance sheets.

Accepted Answer

Benchmarking is a process of comparing a company's performance to another company or its own previous performance to identify areas where improvements can be made. It involves measuring specific metrics and analyzing the results to identify best practices and areas for improvement. Therefore, the correct option is D - measuring how well a company is doing by comparing it to another company or to itself, over time.

Question 2

Mikayla, a cost accountant, is responsible for gathering and monitoring data used for controlling the organization's costs. In which value-chain activity does Mikayla work?
A) Research and development
B) Human resources
C) Materials management
D) Marketing and sales
E) Company infrastructure

Accepted Answer

Mikayla works in company infrastructure, which includes activities like accounting, legal, and general management that support the entire value chain and help in controlling costs.

Question 3

Although several different measures of profitability exist, many authorities in the measurement of profitability argue that which of the following is the best measurement because "it focuses on the true operating performance of the company"?
A) Return on invested capital
B) Net profit margin
C) Return on equity
D) Capital turnover
E) Return on sales

Accepted Answer

Return on invested capital is considered the best measurement of profitability as it takes into account both returns generated from operating activities and the capital invested to generate those returns. This provides a more accurate picture of the company's true operating performance.

Question 4

Which of the following support activities in the value chain controls the transmission of physical materials through the value chain, from procurement through production and into distribution?
A) Human resources
B) Information systems
C) Research and development
D) Logistics
E) Operations

Accepted Answer

Logistics is responsible for controlling the flow of physical materials from procurement through production and into distribution. Human resources handle personnel management, information systems manage data and technology, research and development focus on innovation and product development, and operations are responsible for the actual production process.

Question 5

Which of the following measures how effectively the company uses its capital to generate revenues and is calculated by taking revenues and dividing it by invested capital?
A) Return on invested capital
B) Return on sales
C) Capital turnover
D) Cost of goods sold
E) Sales, general, and administrative expenses

Accepted Answer

Capital turnover measures how effectively a company uses its capital to generate revenues by dividing revenues by invested capital.

Question 6

Innovation refers to the act of:
A) seeking patent protection for new products.
B) developing new products and processes.
C) measuring time taken for a service to be provided.
D) measuring the output produced by an employee.
E) identifying and satisfying the needs of a customer.

Accepted Answer

Innovation involves creating and implementing new ideas and processes, which aligns with the development of new products and processes. Seeking patent protection for new products is a legal process, while measuring time taken for a service or output produced by an employee is related to process efficiency. Identifying and satisfying customer needs falls under the realm of marketing and customer service, rather than innovation.

Question 7

The term value chain refers to the idea that a company is:
A) one of a series of units that comprise an industry segment.
B) the producer of a series of customer-valued products that are linked together.
C) a chain of functional activities that transform inputs into products.
D) one of a series of economic functions.
E) a collection of various products and their attributes.

Accepted Answer

The term value chain refers to the series of functional activities that transform inputs into products, ultimately delivering value to customers. This includes activities such as procurement, production, marketing, and distribution, among others. The value chain concept emphasizes the importance of each activity in contributing to the overall value of the final product or service, and suggests that optimizing these activities can lead to competitive advantage and increased profitability for the company.

Question 8

Cost of goods sold is reported on the:
A) balance sheet.
B) financial position statement.
C) cash budget.
D) income statement.
E) overhead expense statement.

Accepted Answer

Cost of goods sold is an expense and is reported on the income statement, which shows a company's revenues and expenses over a period of time. The balance sheet shows a company's assets, liabilities, and equity at a specific point in time. The financial position statement and cash budget are not common financial statements. The overhead expense statement may show expenses related to producing goods but does not specifically report the cost of goods sold.

Question 9

Using the value chain model, which of the following primary activities is performed after the production phase, as inputs are transformed into outputs?
A) Research and development
B) Marketing and sales
C) Customer service
D) Production
E) Human resources

Accepted Answer

Marketing and sales is the primary activity that follows the production phase in the value chain model, focusing on promoting and selling the finished products.

Question 10

Ray, a toymaker, knits a stuffed unicorn for Belle. Which function of the value chain is illustrated in this scenario?
A) Marketing and sales
B) Distribution
C) Research and development
D) Production
E) Customer service

Accepted Answer

Production, as it involves the creation of the physical product, which in this case is the stuffed unicorn.

Question 11

Which of the following are primarily the digital systems for managing inventory, tracking sales, pricing products, selling products, and dealing with customer service inquiries?
A) Information systems
B) Logistics
C) Corporate infrastructure
D) Marketing and sales
E) Materials management

Accepted Answer

Information systems are primarily the digital systems for managing all the mentioned functions including inventory management, sales tracking, pricing products, selling products and dealing with customer service inquiries.

Question 12

Which of the following correctly describes the difference between product and process innovation?
A) An example of product innovation is just-in-time inventory systems while an example of process innovation is Cisco's development of the router.
B) Product innovation generates value by creating new products while process innovation often allows a company to create more value by lowering production costs.
C) Product innovation lowers production costs while process innovation provides enhanced versions of existing products that customers perceive as having more value.
D) Product innovation is more important than process innovation in achieving competitive advantage.
E) Product innovation decreases a company's pricing options while process innovation increases production costs.

Accepted Answer

Product innovation is focused on creating new or improved products, while process innovation is about improving how products are made or delivered. While both can create value, process innovation often allows a company to create more value by lowering production costs, improving efficiency, and reducing waste. So, option B correctly describes the difference between product and process innovation.

Question 13

Which of the following best describes product innovation?
A) Transforming a quantity of inputs into a given output
B) Identifying and satisfying a customer's needs
C) Creating products that have superior attributes than existing products
D) Developing a new process that focuses on quantity rather than quality
E) Measuring the quantity of outputs produced per employee

Accepted Answer

Product innovation involves creating new or improved products with superior attributes than existing products, rather than just producing more outputs or meeting customer needs.

Question 14

Research and development activities are concerned with:
A) enhancing the design of products to create the impression of superior value.
B) establishing greater efficiency in the production processes to lower costs.
C) increasing the functionality of products.
D) making products more attractive to increase value.
E) All of these are research and development activities.

Accepted Answer

The answer of Research and development activities are concerned with:
A)...

Question 15

Using the value-chain model, which of the following primary activities is performed last, as inputs are transformed into outputs?
A) Research and development
B) Marketing and sales
C) Logistics
D) Production
E) Customer service

Accepted Answer

Customer service is the last primary activity in the value chain model, focusing on supporting the product after it has been sold to ensure customer satisfaction and retention.

Question 16

Ford Motor Company developed the Explorer sports utility vehicle (SUV) in 1990, and it is still one of the best-selling SUVs in the United States, based on an extensive study of customer preferences. Which value-chain activity of Ford conducted those studies?
A) Research and development
B) Human resources
C) Materials management
D) Marketing and sales
E) Company infrastructure

Accepted Answer

Marketing and sales is responsible for conducting customer preference studies to determine the best-selling SUVs in the United States.

Question 17

Which primary activity in the value chain is concerned with the design of products and production processes?
A) Research and development
B) Marketing and sales
C) Materials management
D) Production
E) Company infrastructure

Accepted Answer

Research and development is primarily concerned with designing new products and improving production processes. This involves conducting research on customer needs, technological advancements, and market trends, as well as developing new prototypes, testing samples, and refining production methods.

Question 18

Mike works as a corporate trainer, teaching new employees how to perform manufacturing tasks. In which value-chain activity does Mike work?
A) Research and development
B) Human resources
C) Materials management
D) Production
E) Company infrastructure

Accepted Answer

Mike works in the human resources value-chain activity, specifically in the training and development sub-activity.

Question 19

Dale's methods of fitting horseshoes save time and money for his employer at the local ranch. However, when Dale suggests that everyone use his method, his boss, Cedric, says, "No. That's not the way we've always done it around here." Cedric's resistance to change illustrates:
A) organizational inertia.
B) barriers to imitation.
C) barriers to mobility.
D) lack of distinctive competencies.
E) causal ambiguity.

Accepted Answer

Cedric's resistance to change is an example of organizational inertia, which refers to the tendency of organizations to continue with their established ways of doing things even in the face of new and better ways. Cedric's preference for the old methods over Dale's improved methods demonstrates this resistance to change.

Question 20

Ted is an accountant at ABC Company. He calculates the difference between total revenues and total costs before tax. Ted calculates the:
A) net profit.
B) capital turnover.
C) cost of goods sold.
D) return on sales.
E) invested capital.

Accepted Answer

Ted is calculating the difference between total revenues and total costs, which is the definition of net profit. Therefore, A) net profit is the correct choice.

Quiz 3: Internal Analysis: Resources and Competitive Advantage

Benchmarking can be defined as the practice of:

Mikayla, a cost accountant, is responsible for gathering and monitoring data used for controlling the organization's costs. In which value-chain activity does Mikayla work?

Although several different measures of profitability exist, many authorities in the measurement of profitability argue that which of the following is the best measurement because "it focuses on the true operating performance of the company"?

Which of the following support activities in the value chain controls the transmission of physical materials through the value chain, from procurement through production and into distribution?

Which of the following measures how effectively the company uses its capital to generate revenues and is calculated by taking revenues and dividing it by invested capital?

Innovation refers to the act of:

The term value chain refers to the idea that a company is:

Cost of goods sold is reported on the:

Using the value chain model, which of the following primary activities is performed after the production phase, as inputs are transformed into outputs?

Ray, a toymaker, knits a stuffed unicorn for Belle. Which function of the value chain is illustrated in this scenario?

Which of the following are primarily the digital systems for managing inventory, tracking sales, pricing products, selling products, and dealing with customer service inquiries?

Which of the following correctly describes the difference between product and process innovation?

Which of the following best describes product innovation?

Research and development activities are concerned with:

Using the value-chain model, which of the following primary activities is performed last, as inputs are transformed into outputs?

Ford Motor Company developed the Explorer sports utility vehicle (SUV) in 1990, and it is still one of the best-selling SUVs in the United States, based on an extensive study of customer preferences. Which value-chain activity of Ford conducted those studies?

Which primary activity in the value chain is concerned with the design of products and production processes?

Mike works as a corporate trainer, teaching new employees how to perform manufacturing tasks. In which value-chain activity does Mike work?

Dale's methods of fitting horseshoes save time and money for his employer at the local ranch. However, when Dale suggests that everyone use his method, his boss, Cedric, says, "No. That's not the way we've always done it around here." Cedric's resistance to change illustrates:

Ted is an accountant at ABC Company. He calculates the difference between total revenues and total costs before tax. Ted calculates the: