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#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 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 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 results in adding another 18% and the third million in a 5% increase. Andrews’s product Ate currently has an awareness level of 79% . While an important product for Andrews, Ate’s promotion budget will be 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 carry 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 currently 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 current 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 be 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 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 this competitor? Select: 1 Digby is a niche cost leader Digby is a broad cost leader Digby is a broad differentiator Digby is a niche differentiator #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 carrying charges rather than risk lost profits on a stock out.) Taking current 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 current cash balance is $19,378 (000) and cash flows from operations next period are unchanged from this period, and Chester takes ONLY the following actions relating to cash flows from investing and financing activities: Issues 100 (000) shares of stock at the current stock price Issues $400 (000) in bonds Retires $10,000 (000) in 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 $25,000 (000) Pays a $5.00 per share dividend Liquidates the entire inventory Sells $10,000 (000) of their long-term assets