Question 1

While Information Systems have greatly improved productivity, they have had little impact on lowering costs.

Accepted Answer

Information Systems have been known to both improve productivity and lower costs through automation, streamlining processes, and improving communication and decision-making capabilities.

Question 2

There is a negative relationship between the length of time that a customer stays with a company and profit per
customer.

Accepted Answer

False

Question 3

The challenge for a company's human resource function is to find ways to lower wage and benefits costs.

Accepted Answer

The challenge for a company's human resource function is to find ways to balance the company's financial goals with attracting and retaining talented employees. While cost control is a consideration, it is not the sole focus of the HR function.

Question 4

A vital source of information about the causes of poor quality are the firm's own employees.

Accepted Answer

Employees are often the ones who have firsthand knowledge about the processes and systems that produce a company's products or services. They may be able to identify where mistakes are being made or where inefficiencies are occurring, which can help improve the overall quality of the company's output. Therefore, they can be a vital source of information about the causes of poor quality.

Question 5

Mass customization describes the ability of companies to use flexible manufacturing technology to reconcile the two goals of low cost and differentiation through product customization.

Accepted Answer

Mass customization allows companies to produce customized products at a low cost, making it possible to achieve both goals of low cost and differentiation.

Question 6

Through efficient logistics at Grasshopper Grocers, the stock in the stores is automatically replenished once every week.Management at Grasshopper Grocers uses a just-in-time inventory system.

Accepted Answer

The statement mentions that the stock is replenished once every week through efficient logistics, which indicates the use of a just-in-time inventory system.

Question 7

Learning effects tend to be more significant when a technologically complex task is performed only occasionally.

Accepted Answer

The answer of Learning effects tend to be more significant...

Question 8

No matter how complex the task is, learning effects typically die out after a limited period of time.

Accepted Answer

This is true, as learning effects refer to the improvement in performance that occurs with practice or experience on a task. Once a certain level of proficiency is reached, further practice may not yield noticeable improvements in performance.

Question 9

All else being equal, if a company moves down the experience curve faster than its rivals, it should realize a lower cost structure.

Accepted Answer

The experience curve refers to the relationship between a company's cumulative production volume and its average cost per unit. As a company gains experience in producing a product, it should become more efficient and effective, leading to lower costs. If a company is able to move down the experience curve faster than its rivals, it should be able to achieve a lower cost structure compared to them.

Question 10

Six Sigma is a quality and efficiency program derived from the concept of Total Quality Management, and was widely used in Japan before acceptance in the U.S.

Accepted Answer

The answer of Six Sigma is a quality and efficiency...

Question 11

Functional strategies play only a small role in organizational success because they occur at a low level in the finn.

Accepted Answer

Functional strategies are essential for organizational success as they focus on specific operational areas such as finance, marketing, human resources, and production. These strategies help in achieving the overall business objectives and goals, and their effective implementation can lead to increased efficiency, productivity, and profitability. Therefore, functional strategies are critical for the success of organizations.

Question 12

Distinctive competencies shape the functional-level strategies that a company can pursue.

Accepted Answer

Distinctive competencies are unique strengths or abilities that a company possesses which enable it to differentiate itself from competitors. These competencies can shape the functional-level strategies that a company pursues by focusing on leveraging these strengths within specific functional areas (e.g. marketing, operations, finance) to gain a competitive advantage.

Question 13

When Amber first started working at a car manufacturing plant assembling car doors, she was slower at the task than her co-workers.As time passed, her speed at assembling the doors increased and she even taught others how to perform the task more quickly.As a result of increased employee productivity, this particular plant experienced cost savings.These cost savings can be attributed to learning effects.

Accepted Answer

The scenario describes how Amber's increased speed and ability to teach others led to increased employee productivity, which resulted in cost savings for the plant. These cost savings can be attributed to learning effects, as the employees were able to improve their skills and efficiency over time.

Question 14

Product attributes that collectively define product excellence include the form, features, performance, durability, and styling of the product.

Accepted Answer

The statement is true. These attributes collectively contribute to the overall quality and competitiveness of a product in the marketplace.

Question 15

A benefit oflong-time customer loyalty is the free advertising that customers provide for a company tluough referrals.

Accepted Answer

Long-time customer loyalty often leads to customers recommending the company to their friends and family, resulting in free advertising and increased customer acquisition.

Question 16

Sherree works at Dustcloud Manufacturing where she is part of a seven member team.Her team coordinates its own activities as well as makes its own hiring, training, work, and reward decisions.This type of team is referred to as a virtual team.

Accepted Answer

A virtual team typically refers to a team that works together but is geographically dispersed and relies on technology to communicate and collaborate. Sherree and her team work together in the same physical location, making them a traditional team rather than a virtual team.

Question 17

Diseconomies of scale are the unit cost increases associated with a large scale of output.

Accepted Answer

This statement is true. As output increases beyond a certain point, diseconomies of scale can occur due to issues such as inefficiencies in communication and coordination, increased bureaucracy, and difficulty in managing a larger workforce.

Question 18

The "sigma" in the Six Sigma name refers to the Greek letter meaning standard deviation from the mean.

Accepted Answer

The name Six Sigma comes from statistical quality control (SQC) concepts. The "sigma" symbol represents the standard deviation of a population of data points. Six Sigma aims to have no more than 3.4 defects per million opportunities, which requires a high level of process control and consistency.

Question 19

Flexible production technologies allow a company to produce a wider variety of end products at a unit cost that at one time could be achieved only through the mass production of a standardized output

Accepted Answer

Flexible production technologies allow a company to produce a wider variety of end products while maintaining a unit cost that was previously achieved only through mass production of a standardized output.

Question 20

The concept of economies of scale suggests that unit costs continue to fall indefmitely as output volume increases.

Accepted Answer

Economies of scale suggest that unit costs may decrease up to a certain point as output volume increases, but eventually they will reach a minimum and then may start to increase again due to various factors such as diseconomies of scale or diminishing returns. Therefore, unit costs do not continue to fall indefinitely but rather follow a U-shaped curve.

Quiz 4: Building Competitive Advantage Through Functional-Level Strategy