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MBA Assignment Question Bank - SEM1
MBA Assignment Question Bank - SEM1
Strategies
Remarks
Column1 Column2 Column3 Column4
inventory Answer Remarks
A plant has an annual fixed cost of Rs. 1, 00,000 and a variable cost of Rs. 2000. If the product can be sold for Rs 3000,
100
the break even quantity is
A technique that averages the number of recent actual values and forms a new value is called:
Which of the following is true regarding forward scheduling? Forward scheduling is the scheduling of jobs as soon as the requirements are known
Which of the following dispatching rules ordinarily gives the best results when the criterion is lowest time
shortest processing time (SPT
for completion of the full sequence of jobs?
Correct answer
Current information on _________ can have a significant impact on forecast accuracy: all of the above
the finished products are mostly services
Demand for a given item is said to be dependent if
(rather than goods).
an exponentially smoothed forecast and a
In trend-adjusted exponential smoothing, the trend adjusted forecast (TAF) consists of: smoothed trend factor
The Pareto principle is best applied to which of the following inventory systems?
A tool for integrating customer requirements with design is called QFD
AQL stands for acceptable quality level (AQL)
Just in time focusses on Production
A sample of parts is measured. The mean of this sample is in the middle of the control limits, but some
The process is in control, but not capable of
individual parts measure too low for design specifications and other parts measure too high. Which of producing within the established control limits
the following is true?
Using the ABC classification system for inventory, which of the following is a true statement? The "A" items are of high dollar volume
Completion of any operations depends upon the slowest process in the assembly line. What operations
Target and eliminate bottlenecks
managers need to do in order to be successful?
This model of location selection considers a diagonal path of movement gravity
Moving average method considers all past demands False
Reduced labour cost is an advantage of Continuous production 1
RFQ is sent to few selected vendors 1
Productivity is defined as ratio of input to output False
Productivity can be measured only on workers.
According to the manufacturing-based definition of quality, quality is the degree to which a specific
0
product conforms to standards
In order to compute seasonal relatives, the trend of past data must be computed or known which means
1
that for brand new products this approach can't be used.
In process layouts, it is important to minimize the cost of raw material 0
Decision-making units often function as buying centers when they consist of individuals from various
areas of the firm, such as accounting, engineering, manufacturing, and marketing, who meet specifically 1
to make a purchase decision.
Exponential smoothing adds a percentage (called alpha) of last period's forecast to estimate next period's
0
demand
Bias is measured by the cumulative sum of forecast errors. 0
Designing for disassembly and designing for recycling are nearly synonymous terms. 1
Realistic commitment is an objective of MRP 1
A control chart involves setting action limits for cumulative forecast error. 0
Measurement of productivity in service is more straightforward than in manufacturing since it is not
0
necessary to take into account the cost of materials.
Quality function deployment is a method of integrating the voice of the customer into the design process. 1
Forecasts based on an average tend to exhibit less variability than the original data. 1
A proactive approach to forecasting views forecasts as probable descriptions of future demand, and
0
requires action to be taken to meet that demand.
The value of outputs is measured by the prices customers are willing to pay for goods or services. 0#
Routing is an aspect of production control 0#
Question 0
The sample standard deviation of forecast error is equal to the square root of MSE. 1
The shorter the forecast period, the more accurately the forecasts tend to track what actually happens. 1
A supply chain is a sequence of organizations that are involved in producing goods and/or producing
0
services.
setting the level of safety stock so that a given
The proper quantity of safety stock is typically determined by stockout risk is not exceeded
Ratio of standard deviation to mean is called skewness 0
The father of scientific management was Henry Ford. 0
Exponential smoothing is a form of weighted averaging. 1
The upper control limit in a control chart is at 3Ϭ 1
Forecasts for groups of items tend to be less accurate than forecasts for individual items because
0
forecasts for individual items don't include as many influencing factors.
This model of location selection considers a diagonal path of movement GRAVITY
Which of the following is NOT a factor impacting the supply chain? Longer product life cycle.
Which scheduling technique should be employed when due dates are important for a job order? backward scheduling
The center of gravity method to determine facility location looks Both distance and quantity transported
Two recent trends in operations management are supply chain management and specialization. 0 flexibility and specialization.
The types of individuals who work in the organization represent the organization's macrosegment. 0 composition
When a sample measurement falls inside the control limits, it means that if there is no other pattern in
1
the samples, the process is in control.
data point by its appropriate seasonal relative. 1
An example of an operational operations management decision is inventory level management. 1
Just in time focusses on sales 0
control the likelihood of a stockout due to the
The purpose of safety stock is to variability of demand during lead time
The word technology is used only to refer to information technology. 0
A major consideration in product design is manufacturability. 1
Value added' by definition is always a positive number since 'added' implies increases. 0
A cement plant should be located near river 0
JIT results in inventory reduction 1
For critical path scheduling techniques to be most applicable, the jobs or tasks of a project must be: all of the above correct option not given
A control chart involves setting action limits for cumulative forecast error. 0
A record of all the components of an item, the parent component relationship and usage quantities is called BOM 1
The value with highest frequency is called median 0
Curvilinear and multiple regression procedures permit us to extend associative models to relationships
1
that are non-linear or involve more than one predictor variable.
The three primary functions of a firm are financial management, operations management, and
0
accounting.
The operations manager has primary responsibility for making operations system design decisions, such
0
as system capacity and location of facilities.
TQM is applicable to services 0
Organizational strategy should be determined without considering the realities of functional area
0
strengths and weaknesses since they can be changed to meet our strategy.
Organizational objectives can be categorized as commercial, governmental, nonprofit, and cooperative. 1
Delivery schedule is not a part of PO 0
The probability of a bad lot being accepted is consumer risk 0
The product of achievable capacity and efficiency is called Effective capacity
A sample of parts is measured. The mean of this sample is in the middle of the control limits, but some individual parts measure too The process is in control, but not capable of
low for design specifications and other parts measure too high. Which of the following is true? producing within the established control limits
A productivity increase in one operation that doesn't improve overall productivity of the business isn't worthwhile
The assignable causes of variation Cannot be eliminated
The priority rule which processes jobs according to the smallest ratio of due date to processing time is: critical ratio
Which of the following corresponds to the predictor variable in simple linear regression? independent variable
The MPS calls for 110 units of Product A, there are currently 60 of Product A on hand. Each A requires 4 of Part B, there
180
are 20 units of B available. The net requirements for B are
Which of the following might be used to indicate the cyclical component of a forecast? Mean Squared Error (MSE)
Which of the following lot-sizing-techniques results in the lowest holding costs? lot-for-lot
Motivation is a result of MBO
The ratio of good output to quantity of raw material input is called process yield
material requirements planning with feedback
Distribution Resource Planning (DRP) is loop from distribution centers
Using the ABC classification system for inventory, which of the following is a true statement? The “A” items are of high dollar value
In the 1970's and 1980's in the USA, organizations concentrated on: marketing and financial strategies
Current information on _________ can have a significant impact on forecast accuracy: all of the above
The most appropriate sequencing rule to use if the goal is to dynamically track the progress of jobs and establish relative
critical ratio
priority on a common basis is
Purchase involves All above
The probability of a bad lot being accepted is Consumer risk
The concept of cause and effect is used in
The concept of cause and effect is used in
Quality circles
Use of the sequencing rule Shortest Processing Time generally results in minimum average flow time
Which of the following is not an assumption of the basic fixed-order quantity inventory model? Diminishing returns to scale of holding inventory
One way to facilitate production scheduling and production in firms making a large number of different final products is to
modular bills
use
___________ is generally used to facilitate an organization strategy that emphasizes low cost. None of the above
Discrepancy report is used for None of above
The desired probability of not running out of
Which one of the following descriptions best defines the cycle-service level as a measure of customer service?
stock in any one inventory cycle
A suitable chart for controlling defects is C chart
Petrochemical Industry is an example for ~*~ production Process
Planning workforce requirements, scheduling of the equipment and financial analysis are the major uses of__________. Productivity ratios
Most of the organizations adopt a defensive design R&D Strategy in an attempt to prolong the life of the product by
Maturity Decline is the answer as per google
employing new packaging, redesigning it, improving its reliability. This is __________ phase in product life cycle.
The output of a production system is Both Goods + Services
This is a factor affecting site selection All above
how well an acceptance sampling plan
An Operating Characteristic (OC) curve describes
discriminates between good and bad lots
A good layout affects All above
ISO 9000 is a Implementation standard 0
Forecasts based on an average tend to exhibit less variability than the original data. 0
Time required for production of a component is called lead time 0
A Boutique should be located near market 0
If value of input is more than the value of output, it is a value adding process 0
Human effort, technology, raw materials, information and time are all examples of the necessary inputs to operations 0
Quality-based strategies focus on customer satisfaction by ensuring that each product is carefully and thoroughly
0
inspected prior to delivery to prevent sending out bad product.
ISO 9000 is a standard for product quality 0
Early adopters are innovative organizations that derive a great deal of their success from leading change 0
Forecasting techniques that are based on time series data assume that future values of the series will duplicate past
0
values.
Productivity tends to be only a very minor factor in an organization's ability to compete. 0
Savings on transportation cost is a feature of localized purchasing 0
Organizational culture is a concept that is similar to consumer self-concept and lifestyle. 0
Expected payoff is equal to the highest payoff for an alternative in the environment of risk 0
Layout planning is a operational decision 0
Smoothing coefficient is low for new products for which demand is shifting 0
Roger owns 200 shares of stock in Home Depot. Then the home depot comes under public firm commercial firm 0
Plant layout design Precedes factory layout 0
Forecast for a group of items is more accurate than for a single item 0
The ratio of available capacity to designed capacity is called maximum capacity 0
Seasonal relatives can be used to de-seasonalize data or incorporate seasonality in a forecast. 0
Median refers to the central value 0
The T in the model TAF = S+T represents the time dimension (which is usually expressed in weeks or months 0
Wastivity is Equal to Productivity 0
A chase plan is characterized by low inventory
Operations managers are responsible for assessing consumer wants and needs and selling and promoting the
0
organization's goods or services.
A company can compete with other companies manufacturing a similar product only by reducing its price 0
In the maximin principle, the substitute with the best out of the worst payoffs is selected 0
Poka-yoke is the Japanese term for continuous improvement. 0
AOQL stands for Acceptable overall quality lot 0
The naive approach to forecasting requires a linear trend line. 0
DFM stands for: Design for Manufacturing
A scheduling technique used to achieve optimum, one-to-one matching of tasks and resources is the assignment method
Robustness of a product is _____________ related with the probability of failure. Inversely
Perhaps the most powerful type of reference group in industrial markets is that of market mavens 0
Correlation measures the strength and direction of a relationship between variables 0
Forecasts help managers plan both the system itself and provide valuable information for using the system. 0
Product layout is not a basic layout format 0#
Inventory level a performance measure of purchase 0
Site visits to potential vendors, laboratory tests of a new product, and investigation of possible product specifications are
0#
part of formal information search.
Carlos is trying to understand the organizational buyer behavior of firms in his sales territory. Therefore firmographics is
0#
an external influence on an organization's culture that he should examine
A suitable chart for controlling fraction defective is c chart 0 is
CAD uses computer graphics for product design 0#
A firm pursuing a strategy based on customization and variety will tend to structure and manage its supply chain to
Variation
accommodate more _____________ than a firm pursuing a strategy based on low-cost and high-volume.
Long time relation with a few suppliers is advocated by TQM 0
Increased emphasis on pollution control and the environment has led companies to adopt an environmental scanning
0
approach
Lead users tend to accelerate diffusion of information through infrastructure, which is labeled as market push 0
The latest version of ISO 9000 is 2000 0
If people would only work harder, productivity would increase 0
X-bar R chart is for controlling attributes 0
Vary size of inventory is a pure planning strategy for varying demand 0
The process improvement technique that sorts the vital few from the trivial many is Pareto analysis 0#
Standardized parts are interchangeable parts 0#
An advantage of trend adjusted exponential smoothing over the linear trend equation is its ability to adjust over time to
0
changes in the trend.
The term robust design refers to a product that has exceptional strength 0
Effective capacity is equal to design capacity 0
Varying workforce level to meet demand is a characteristic of chase plan 0
Flow of raw materials is in lots in Batch production
Size of site is a factor for Site selection
Which of the following is NOT a benefit of SCM/JIT Purchasing? Less dependence on suppliers
Given forecast errors of 5, 0, - 4, and 3, what is the bias? 4
Given forecast errors of 4, 8, and - 3, what is the mean absolute deviation? 5
Given forecast errors of 5, 0, - 4, and 3, what is the mean absolute deviation? 3
Purchase function needs information from All above
For firms competing in worldwide markets, conducting __________________ is more complex, since what works in one
Environmental analysis
country or region might not work in another
What type of process would a paper mill be most likely to use? Continuous flow
A fixed interval system is suitable for joint replenishment items
Quality refers to All above
Suppose a country's productivity last year was 84. If this country's productivity growth rate of 5% is to be maintained, this
88.2
means that this year's productivity will have to be _______.
Value added can be calculated by outputs minus inputs
to examine variability in acceptance sampling
A run test is used
plans
In a X-bar chart, the constant used for determining control limits is A2
If it takes a supplier four days to deliver an order once it has been placed and the standard deviation of daily demand is
100
10, which of the following is the standard deviation of usage during lead time?
Which of these is not part of the planning files of a production planning and control system? control files
A suitable chart for controlling fraction defective is P chart
Patrol inspection is a part of Process control
Each X requires 2 of component Y; each Y requires 4 of part Z. The lead time for assembly of X is 1 week. The lead time
for the manufacture of Y is 1 week. The lead time for the procurement of Z is 6 weeks. The cumulative lead time for X is 8
~*~ weeks.
Acceptance sampling is usually used to control incoming lots of purchased products
Acceptance sampling's primary purpose is to decide if a lot meets predetermined standards
Producer's risk is the probability of rejecting a good lot
Which of the following is used for constructing a control chart? mean squared error (MSE)
Using the economic order quantity model, which of the following is the total ordering cost of inventory given an annual
1200
demand of 36,000 units, a cost per order of $80 and a holding cost per unit per year of $4?
When a set of jobs must pass through two workstations whose sequence is fixed, ~*~ is the rule most commonly applied Johnson's Rule
change in the central tendency of the process
The x-bar chart tells us whether there has been a
output
The production database containing information about each of the components that a firm produces or purchases is the item master files
Purchase as a necessary evil is Never seen
In continuous (make-to-stock) operations, the master production schedule is usually expressed in terms of end-items
A manufacturer has been receiving excessive numbers of defective standard machine parts from a vendor on a regular
Statistical quality control
basis. What is the most effective way to design a formal inspection system for incoming parts?
A model representing functional relationship between variables is called Mathematical model
If each piece requires 30 minutes of machine time, each machine has 2500 hours available in one year and a total of
2
10,000 pieces need to be produced, the number of machines required is
An aluminum plant produces 50 KG aluminum per Kilowatt Hour of energy. This is a ________ of productivity Partial measure
Era of advanced techniques was during After 1980
If demand is not uniform and constant, then stockout risks can be controlled by adding safety stock
The earliest start time plus the time needed to
The early finish time for an activity equals:
complete the activity
Quality refers to cost of product 0
A control chart involves setting action limits for cumulative forecast error. 0
Productivity and efficiency are different names for the same thing. 0
In most acceptance sampling plans, when a lot is rejected, the entire lot is inspected and all defective items are replaced.
0
When using this technique the AOQ is not affected, but the AQL is improved.
Companies are either producing goods or delivering services. This means that only one of the two types of operations
0
management strategies are used.
TQM is applicable to services 0
Government statistics are a good source of data about productivity trends in the service sector. 0
The individuals (representing functional areas and management) within an organization who participate in making a given
0
purchase decision make up the decision center (DC).
The use of models will guarantee the best possible decisions. 0
Multifactor productivity considers one input 0
The principal activity in all production operations is to convert inputs into outputs that satisfy consumer wants. 0
A suitable chart for controlling defects is p chart 0
Product layout is not a basic layout format 0
Production volume in product layout is low 0
A moving average forecast tends to be more responsive to changes in the data series when more data points are
0
included in the average.
cost of distribution is not a component of total cost 0
Activities of handling and transport of goods is a part of maintenance function 0
The assignable causes of variation can be eliminated 0
Motivation is a result of MBO 0
Motives is an internal influence on organizational buyer behavior. 0
If the average number of defects is 9, the lower control limit in a c chart is 4 0
Traditional strategies of business organizations have tended to emphasize cost minimization or product differentiation. 0
Much of the responsibility for improving productivity rests with management. 0
Individual power and expertise have virtually no influence on organizational decisions since it is a group process involving
0
DMUs.
Investigation of trends to identify influencing developments is a part of analysis 0
Effectiveness is the measure of output versus capacity 0
A company can compete with other companies manufacturing a similar product only by reducing its price 0
Basic research, applied research and development are all part of the product life cycle 0
equipment and people are shared across
All of the following are advantages of the pure project organizational structure EXCEPT
projects.
Productivity is expressed as: output divided by input
X-bar R chart is for controlling Continuous variables
A tool for verifying design against failures is called FMEA
The ______ is the input to Materials Requirements Planning which lists the assemblies, subassemblies, parts and raw
bill of materials
materials needed to produce one unit of finished product.
The fundamental purpose for the existence of any organization is described by its: mission statement
Acceptance sampling is for Inspection of parts
If the average number of defects is 9, the lower control limit in a c chart is 3
A persistent tendency for forecasts to be greater than or less than the actual values is called: bias
ISO 9000 is applicable to All Above
making type I errors for various percentages of
The operating characteristic (OC) curve shows the probability of
defectives
Which technique is used in computing seasonal relatives? centered moving average
The ______ is(are) the MRP input detailing which end items are to be produced, when they are needed, and in what
master production schedule
quantities.
Plots of sample ranges indicate that the most recent value is below the lower control limit. What course of action would The process is out of control; reject the last units
you recommend? produce
Motion study was the contribution of Gilberth
Statistical and mathematical models use Algorithm
A model representing physical replica of processes is called Iconic model
A double sampling plan specifies all of the following Except Double acceptance number
The impact of cost reduction on profits is much larger than the impact of increased sales
Inventory classification on the basis of item cost is None of these
For products in maturity stage of the product life cycle the purchasing function of an organization likely to be the key
0
function influencing the purchase decision.
The use of a control chart assumes that errors are normally distributed about a mean of zero. 0
A Type II error occurs when the population is worse than the LTPD. 0
Forecasting techniques such as moving averages, exponential smoothing, and the naive approach all represent
0
smoothed (averaged) values of time series data
ISO 9000 is applicable to services 0
A combination of product and process layout is called assembly line 0
Level zero in a bill of materials is accorded to finished product 0
Environmental scanning is a search for events or trends that present either threats or opportunities to the organization 0
The principal activity in all production operations is to convert inputs into outputs that satisfy consumer wants. 0
The mission of a firm should be designed to support the firm's overall strategy. 0
A difference between large and small organizations when making a purchase decision is large organizations generally
0
involve more individuals in the decisionmaking process.
In the principle of minimax regret, equal probability is allocated to all conditions and the alternative with maximum
0
expected value is selected
People from different functional areas of an organization in a DMU will always use the same evaluative criteria. 0
The Delphi approach involves the use of a series of questionnaires to achieve a consensus forecast. 0
Standardization has the advantage of reducing variability. 0
The product of achievable capacity and efficiency is called maximum capacity 0
Environment of uncertainty is a condition in which probability of all possible outcomes is known 0
Accounts function is not covered by ISO 9000 0
Straight rebuy organizational purchase situation is characterized by low purchase importance, low choice complexity,
level of decision-making unit (DMU) at low levels of the organization, a very small DMU, very brief time to decision, and 0
very limited decision search.
The segment of small and moderate-sized businesses has a lot of potential and have marketers learned with respect to
0
segmenting business customers.
Services are intangible in nature 0
The EOQ model with quantity discounts attempts to determine lowest price 0
Designing the operations products , services &
Which of the following activities is not a direct responsibility of operations management? process
A Cpk index value of 1 is ideal, meaning all units
Which of the following is true regarding the process capability index Cpk? meet specifications.
Moving from the aggregate plan to a master production schedule requires disaggregation
Both are employed in a manufacturing
In what way are Distribution Resource Planning (DRP) and Material Requirements Planning (MRP) similar? organization
all of the above (Price, inventory,
Current information on _________ can have a significant impact on forecast accuracy:
competition)
Sark Incorporated is out of stock for a key item, which has a backorder of 200 units. An open order of 750 units
Less than or equal to 0 units
is scheduled for arrival on the following Monday. What is the current inventory position at Sark?
Using the ABC classification system for inventory, which of the following is a true statement? The “A” items are of high dollar value
The priority rule which processes jobs according to the smallest ratio of due date to processing time is: critical ratio
Which of the following factors would tend to reduce productivity? more inexperienced workers
Functional strategies are shaped by
Which of the following is true?
corporate strategy
Which of the following might be used to indicate the cyclical component of a forecast? Mean Squared Error (MSE)
Given forecast errors of 5, 0, - 4, and 3, what is the mean absolute deviation? 3
For firms competing in worldwide markets, conducting __________________ is more complex, since what
Environmental analysis
works in one country or region might not work in another.
The extension of MRP which extends to resources such as labor hours and machine hours, as well as to order
Enterprise Resource Planning
entry, purchasing, and direct interface with customers and suppliers is
Factory X is trying to use level use scheduling. If their first target were to cut the current lot size in half, by what
Cannot be determine
proportion must setup cost change?
This is not a component of production management Selling product
Flow of raw materials is in lots in Batch production
Which of the following is one of 6M,s All above (man, material, money)
Which one of the following is a characteristic of a continuous process? The ability to handle high volumes
Robustness of a product is _____________ related with the probability of failure. Inversely
A device to move material between two fixed points is called Conveyor
Which one of the following is the correct order of layout types from low volume/high variety to high volume/low
Fixed position, process, cell, product
variety?
A document describing quantity of end items to be produced within specified periods of time is called Master production schedule
p chart is for controlling attributes 1
Standardized parts are interchangeable parts 0
Question Answer Remarks
The annual compounded interest rate of an investment with a stated interest rate of 7%
compounded quarterly for 4 years (round to the nearest .1%) would be 6.7%.
In deciding the optimal level of current assets for the firm, management is confronted with
__________. a trade-off between profitability and risk
Payment to creditors is a manifestation of cash held for: trans motive
The longer the cash cycle, the more financing a firm requires.
Which of the following is not a part of credit policy?
Cost of issuing new shares to the public is known as :
In the Walters model, the DP ratio should depend upon the relationship between r and ke
Inventory is generally valued as lower of Market Price and Replacement Cost (Wrong Answer)
The riskiness of equity securities typically exceeds that of debt securities for firms.
The basic rent that you are charged when you borrow money is called real rate of return.
There is no explicit benefit of keeping inventory, hence no stock be maintained.
leverage can be used to measure the relationship between :
‘Bird in Hand’ argument is given by : Gordon’s Model
When an investment pays only simple interest, this means the future value of the investment
will be lower than invested sum. 0
Cost of Capital for Bonds and Debentures is calculated on : Risk-free Rate of Interest basis
compare the net present values under each
alternative, using the cost of capital as the
A way to analyze whether debt or lease financing would be preferable is to: discount rate
Mr. Munir purchased goods of Rs.100,000 on June 01, 2006 from Zeeshan and brothers on credit
terms of 3/10, net 30. On June 09 Mr. Munir decided to make payment to Zeeshan and brothers.
How much he would pay to Zeeshan and brothers? 97000
Which of the following does not effect cash flows from a proposal : Method of Project Financing
interest is earned only on the original
"When an investment pays only simple interest, this means:" investment
Same considerations are applicable to short-term sources as well as long-term sources of
funds. 0
Stability of dividend refers to the fact that the rate of divided must be fixed. 0
Which of the following is generally untrue for manufacturing firm? High level of cash balance
Which of the following does not usually affect working capital requirement? None of (a) and (b)
The net present value (NPV) decision rule is considered the best in theory. 1
Financial managers focus on cash flows. 1
Debentures are long-term unsecured bonds that are backed only by the general
creditworthiness of the issuer. 1
Depreciation is incorporated in cash flows because it : Reduces Tax liability
Receiving a required inventory item at the exact time needed is Jit
The more frequent the compounding, the less a person will earn on a savings account. 0 Compounding generates more returns
As bank overdraft is availed by business firms on a regular basis, it may be considered as a
long-term source of funds. 0 OD is a short term source of finance
Three advantages of the corporate form of organization are the ease of transfer of ownership,
limited liability for the shareholders and an unlimited life for the business entity. 1
A firm becomes bankrupt when the value of its debt equals the value of its assets. 0 Value of debts > Value of assets
Unsecured loans are those that appear to be too risky for over one year. 1
_____________ is the point at which firm profit is equal to zero. Breakeven
When money is invested at compound interest, the growth rate is the interest rate.
Minimum Rate of Return that a firm must earn in order to satisfy its investors, is also known as : Weighted Average Cost of Capital
A capital investment is one that has the prospect of long-term benefits
Which of the following is not an objective of cash management? Optimization of cash balance
The estimated benefits from a project are expressed as cash flows instead of income flows it is cash, not accounting income, that is central
because to the firms capital budgeting decision
Under the core preposition of NOI approach, the overall
cost of capital depends on the business risk of the firm,
and business risk does not change with change in debt
Under NOI Approach, overall cost of capital equity mix, hence overall cost of capital remains
Which of the following is true? remains same constant.
Accounting Rate of Return is based on Average Expected Profit
Both the future and present value of a sum of money are based on: Interest Rate and Number of Time Periods
In the EOQ Model EOQ will increase if order cost increases
A firm must make its dividend payments to preferred shareholders before it makes any interest
payments to its bondholders.
1 0
"Three advantages of the corporate form of organization are the ease of transfer of ownership,
limited liability for the shareholders and an unlimited life for the business entity." 1
A firm will borrow long-term if the extra interest cost of borrowing long-term is less than the
expected cost of rising interest rates before it retires its debt. 1
Capital market securities fall into two categories: bonds and stocks. 1
"When firms sell securities for the very first time, the issue is an initial public offering." 1
Stability of dividend refers to the fact that the rate of divided must be fixed.
1
Deferral period refers to the credit period allowed by: Creditor
Not all cash a company generates will be returned to the investors. Which of the following will
NOT reduce the amount of capital returned to the investors? Dividends
"At optimal capital structure, the k0 of the firm is highest." 0
Cash cycle is equal to operating cycle for a firm. 0
"A formal, legal commitment to extend credit up to some maximum amount over a stated period
of time is known as Line of credit."
0
"In India, commercial papers can be issued for any amount and for any duration." 0 ?
You have $1000 you want to save. If four different banks offer four different compounding
methods for interest, which method should you choose to maximize your $1000? compounded quarterly
You are planning to retire in twenty years. You'll live ten years after retirement. You want to be
able to draw out of your savings at the rate of $10,000 per year. How much would you have to
pay in equal annual deposits until retirement to meet your objectives? Assume interest remains
at 9%. 1254
You have $100,000 to invest at 4% interest. If you wish to withdraw equal annual payments for 4
years, how much could you withdraw each year and leave $0 in the investment account? 27548
What is the WACC for a firm with 50% debt and 50% equity that pays 12% on its debt, 20% on its
equity, and has a 40% tax rate? 0.136
Which of the following statements is correct for a conservative financing policy for a firm The firm uses long-term financing to finance all
relative to a former aggressive policy? fixed and current assets.
Which of the following would be consistent with an aggressive approach to financing working Financing some long-term needs with short-
capital? term funds
The amount of current assets required to meet a firms long-term minimum needs is referred to
as __________ working capital. net
This sub-area of finance looks at firm decisions in acquiring and utilizing cash received from
investors or from retained earnings. investments
Liberalizing the discount rate means increasing the discount rate for the same period. 1
The present value of a rupee to be received in the future is more than a rupee. 0
The longer the cash cycle, the more financing a firm requires. 1
For corporations, maximizing the value of owner's equity can also be stated as maximizing the
stock price. 1
If the fixed cost of production is zero, which one of the following is correct? None of the above
Which of the following is not a part of credit policy? paying practices of debtors.
Comparing the values of undiscounted cash flows is analogous to comparing apples to
oranges. 1
Sunk costs and opportunity costs are often the same thing. 0
Which of the following is not incorporated in Capital Budgeting? Rate of Cash Discount
If cash discount is offered to customers, then which of the following would increase? sales
The decision function of financial management can be broken down into the financing
and investment decisions. 0
Projects that have a zero NPV when calculated at the WACC will provide sufficient returns
to all stakeholders. 1
Operating leverage may be defined as Contribution ÷ EPS. 0
This sub-area of finance is important for adapting to the global economy. international finance
"In capital budgeting, the financial manager tries to identify investment opportunities that will
increase the value of the firm." 1
Retained earnings are an easily available source of funds at no explicit cost. 1
Strict adherence to the maturity matching approach to financing would call for all current assets
to be financed solely with current liabilities. 1
Permanent Working Capital is also known as: None of the above Net working capital is Wrong in key
"To financial analysts, ""net working capital"" means the same thing as __________." current assets minus current liabilities.
The Traditional Approach to Value of the firm m that that there is an optimum capital structure.
Walter’s Model suggests that a firm can always increase the value of the share by increasing dividend
Cash dividend and bonus share issue affect the firm in the same way. 0
Indifference level of EBIT is one at which EPS under two or more financial plans would be
same. 1
"If the Net Present Values of two, mutually exclusive options are both greater than zero,
which option should be selected if the firm uses the Net Present Value method?" The one with the largest Net Present Value.
"Risk, as it relates to working capital, means that there is jeopardy to the firm for not
maintaining sufficient current assets to meet its cash obligations as they occur and take
advantage of prompt payment discounts." 0
"The NI approach, the ke is assumed to be same and constant." 1
The concepts of present value and future value are: directly related to each other
A low price/earnings ratio usually means that a firm has positive expectations for the
future. 0
A perpetuity is a type of annuity that is set up so that the
payments will never end. There is no set maturity date.
As long as an investor owns a perpetuity, they will keep
A perpetuity is a special form of an annuity. 1 receiving payments.
This sub-area of finance helps facilitate the capital flows between investors and
companies. investments is wrong
Favourable financial leverage and trading on equity are same. 1
"Having defined working capital as current assets, it can be further classified according to
components and time." 1
___________ refers to meeting the needs of the present without compromising the ability
of future generations to meet their own needs Sustainability
The focal point of financial management in a firm is the creation of value for shareholders 1
Marketable securities are primarily Short term debt investment
_____ focuses on long term decision making regarding the acquisition of projects Capital Budgeting
Liquidity moves together with risk 1
Annuity is A series of equal and consecutive payments
Operating leverage works when A: Sales increases is wrong
A project requires an initial investment of 1,20,000 and yields annual cash inflow of 12,000 for 12
years. Its payback period is 10 years
Dividend is a part of retained earnings 0 ##
Conversion of debentures into share capital is equal to issue of share capital and hence it is a type of
cash inflow. 0
If ke = r, then under Walter's Model, which of the following is irrelevant DP Ratio
(I) Capital market securities fall into two categories: bonds and stocks. (II) Long-term bonds include
government bonds and long-term notes, municipal bonds, and corporate bonds Both are true
Receivables management deals only with the collection of cash from the debtors 0
The main goal of the financial manager is to maximize the value of the firm to its owners 1
The WACC is the rate of return that the firm must expect to earn on its average-risk investments in
order to provide an acceptable return to its security holders 1
A firm has inventory turnover of 6 and cost of goods sold is Rs. 7,50,000. With better inventory
management, the inventory turnover is increased to 10. This would result in Decrease in inventory by Rs. 50,000
What is the after-tax cost of preferred stock that sells for $10 per share and offers a $1.20 dividend
when the tax rate is 35% 0.12
What appears to be the targeted debt ratio of a firm that issues $15 million in bonds and $35 million in
equity to finance its new capital projects? 0.3
Which of the following is not applied in Capital Budgeting All accrued costs and revenues be incorporated
NPV of a proposal indicates C: Total Value of the Proposal (Wrong Ans)
If a firm has a DOL of 2.8, it means If sales rise by 1% , EBIT will rise by 2.8%
The cost of retained earnings does not consider _________ in the equation flotation costs
"In almost all present and future value computations, it is implicitly assumed that the cash flows occur
at the beginning of each period. 0
An advantage of the payback rule is that it is easy to understand. 1
"For corporations, maximizing the value of owner's equity can also be stated as maximizing the stock price
"Firms raise the funding they need through debt, equity and profits. 1
Gordon's model suggests that dividend payment does not affect the market price of the share 0
Trade credit is: D: is incorrect
A low price/earnings ratio usually means that a firm D: is incorrect
EOQ model assumes a constant usage rate for a particular item 1
Working Capital is defined as excess of Current assets over current liabilities
Which of the following does not usually affect working capital requirement None of (a) and (b)
If a project has conventional cash flows, it may also have more than one IRR 0
Financial statements are an important source of information to shareholders and stakeholders 1
Most preferred stock has dividends that are cumulative 1
CFO is the firm's highest-level financial manager 1
"If you have $1000 and you plan to save it for 4 years with an interest rate of 10%, the future value of
your savings would be $1464. 1
"Under COD terms, the seller extends credit to the buyer subject to bank approval 0
Short-term financing for a business firm includes A: Bonds is wrong, D: Morgages is wrong
"The board of directors has the power to act on behalf of the shareholders to hire and fire the operating
managers of the firm. In a legal sense, the directors are ""principals"" and the shareholders are
""agents.""" 0
Management of cash means management of cash inflows 0
Walters model supports the view that dividend is relevant for value of the firm. 0 1
The weighted-average cost of capital is the return the company needs to earn after tax in order to satisfy all its
security holders. 1
The principal amount of a bond at issue is called coupon value.
"For most firms, the cost of capital decreases to a low point as the firm ________ debt financing. At some point
beyond this optimal level, the cost of capital increases the amount of debt ________." increases decreases
Combined Leverage can be used to measure the relationship between : Sales and EPS
A: Sales increase is wrong (Same ques different
Operating Leverage is calculated as Contribution ÷ EBIT options)
Return on Equity and Earnings per Share are one and the same thing 0
The distribution of a firm’s capital between debt and equity is its capital structure 1
If a project has zero NPV when the expected cash flows are discounted at the weighted-average cost
of capital, then the project's cash flows are just sufficient to give debt holders and shareholders the
return they require. 1
DP ratio of a firm should be directly related to future growth plans of the firm 1
If you want to have $90 in four years, you must put $64 in a savings account today. Assume that the
savings account pays 8.5% and it is compounded monthly (round to the nearest $1) 1
MM Model argues that dividend is irrelevant as the value of the firm depends upon earning power 1
Use of safety stock by a firm would Increase Inventory Cost
The financial manager of a firm is mostly interested in the company's book balance of cash, not its
available balance 0
Which of the following is correct? Question on CL OL and FL
If the firm decreases its debt ratio, both the debt and the equity will become more risky. The
debtholders and equityholders require a higher return to compensate for the increased risk CL=OL×FL
If the Internal Rates of Return of two, mutually exclusive options are both greater than the cost of
capital, which option should be selected under the Internal Rate of Return method? Option C is wrong
(1 + i)n is FVIF
"A firm's cost of capital can be used in valuation of every new project they encounter, regardless of its
risk." 0
Credit period allowed to customers must be equal to credit period allowed by the supplier to the firm 0
Which of the following is not true for MM Model? Market value is unaffected by Dividend policy
"In deciding the optimal level of current assets for the firm, management is confronted with a trade-off
between liquidity and risk." 0
"A formal, legal commitment to extend credit up to some maximum amount over a stated period of time
is known as" Line of credit is Wrong
The firms that typically pay out dividends are those that have no long term debt. 1
Which of the following does not usually affect working capital requirement None of (a) and (b)
An asset sold at the end of a specified time period is called a _____________ asset. self-liquidating
Accrued interest declines with each payment on an amortizing loan 1
Current Liabilities are those obligations which are generally to be discharged in 1 year
You have $1000 you want to save. If four different banks offer four different compounding methods for
interest, you should choose compounded annually to maximize your $1000. 0
Capital structure in essence is a firm's mix of long-term financing 1
You are considering the purchase of two different insurance annuities. Annuity A will pay you $16,000
at the beginning of each year for 8 years. Annuity B will pay you $12,000 at the end of each year for 12
years. Assuming your money is worth 7%, and each costs you $75,000 today, which would you prefer Prefer Annuity A
The company cost of capital, after tax, for a firm with a 65/35 debt/equity split, 8% cost of debt, 15%
cost of equity, and a 35% tax rate would be Wrong Ans: 0.0702
You are going to pay $800 into an account at the beginning of each of 20 years. The account will then
be left to compound for an additional 20 years. At the end of the 41st year you will begin receiving a
perpetuity from the account. If the account pays 14%, how much each year will you receive from the
perpetuity (round to nearest $1,000)? $160,000
If you want to have $1,200 in 27 months, how much money must you put in a savings account today?
Assume that the savings account pays 14% and it is compounded monthly (round to nearest $10). 880
If you want to have $2,100 in 3 years, how much money must you put in a savings account today?
Assume that the savings account pays 7% and it is compounded quarterly $1,705
Question Answer Remarks
In the personal selling process, the step which consists of identifying potential customers is classified as prospecting
Price setting is usually determined by ________ in small companies. top management
What do many companies use to determine sales force size? the workload approach
In order to form a consistent and effective integrated marketing program, price decisions should be coordinated with each
of the following EXCEPT competitors' prices
The ________ concept is aligned with the philosophy of continuous product improvement and the belief that customers
will choose products that offer the most in quality, performance, and innovative features. product
What is the first element that a reader notices in a print ad? illustration headline - is wrong ans
A salesperson in the prospecting stage most likely identifies potential customers through all of the following methods
EXCEPT referrals from competing salespeople
Sales promotion features a wide assortment of tools. Which of the following is NOT one of these tools? catalogs
To address concerns about the misuse of research study findings, several highly regarded marketing associations have
developed ________. codes of research ethics
A detailed version of a new idea stated in meaningful customer terms is called a product concept
Retail convergence is a merging of all of the following EXCEPT employees
After determining its advertising objectives, the company's next step in developing an advertising program is to set its advertising budget
Product planners need to consider products and services on three levels. Each level adds more customer value. The most
basic level is the ________, which addresses the question, What is the buyer really buying? core customer value
The communication channel a company uses to move its advertising messages from sender to receiver is called the media
Which of the following is the process of the buying center deciding on the best product characteristics? product specification
Advertisers are increasingly shifting larger portions of their budgets to media that cost less and target more effectively.
Which of the following is harmed the MOST by such a shift? network television
All of the following are difficulties associated with selling to government buyers EXCEPT ________. low sales volume
A review of the sales, costs, and profit projections for a new product to find out whether they satisfy the company's
objectives is called a business analysis
When suppliers, distributors, and customers partner with each other to improve the performance of the entire system, they
are participating in a value delivery network
He/she is an individual acting on behalf of a company who performs one or more of the following activities: prospecting,
communicating, servicing, and information gathering. salesperson
The company designs what it considers to be a good product, totals the expenses of making the product, and sets a price
that adds a standard mark-up to the cost of the product. This approach to pricing is called cost-plus pricing
Salespeople should be trained to recognize ________ signals from the buyer, which can include physical actions such as
leaning forward and nodding or asking questions about prices and credit terms. closing
Which promotional mix strategy directs marketing efforts toward final consumers? pull
The personal selling step in which the sales person asks for an order to the customer is classified as closing
Which of the following is NOT a typical supply chain member? government agencies
Another name for systems selling is ________ selling. solutions
It includes all activities involved in selling goods and services to those buying for resale or business use. Wholesaling
A company's total marketing communications package consists of a special blend of advertising, sales promotion, public
relations, personal selling, and direct-marketing tools that the company uses to communicate customer value and build
customer relationships. This is also called the promotion mix
Business-to-consumer companies are more likely to emphasize a ________ promotion strategy, while business-to-
business companies are more likely to emphasize a ________ promotion strategy. pull; push
When determining the number of channel members to use at each level, three strategies are available: intensive,
exclusive, and ________ distribution. selective
When sales persons identify customers by selecting names of present customers, wholesalers or retailers they are
involved in Prospecting
you are about to test hypotheses about decreasing sales in certain markets and their causes. you are involved in what
type of research? causal
A(n) _____ is used to manage international marketing by simply shipping out goods. export department
What do many researchers encounter when conducting market research in foreign countries? all of the above
Which message execution style depicts average people using a product in an everyday setting? slice of life
Some consumers worry that they will be affected by marketing messages without even knowing it. They are concerned
about ________ advertising. subliminal
Some companies have adopted following strategy, offering just the right combination of quality and good service at a fair
price. good-value pricing
________ is never simple, yet understanding it is the essential task of marketing management. Consumer buying behavior
The ________ environment consists of factors that affect consumer purchasing power and spending patterns. economic
A ________ consists of all the product lines and items that a particular seller offers for sale. product mix
Almost all major purchases result in ________, or discomfort caused by postpurchase conflict. cognitive dissonance
As per Hofstede, there are ______ cultural dimensions that differentiate nations. :4
Consumer research, product development, communication, distribution, pricing, and service are all core ________
activities. marketing
A corporate VMS has the advantage of controlling the entire distribution chain under single ownership
your firm asks you to consult external sources for new product ideas. All of the following are common external sources
EXCEPT the firm's executives
When General Motors provides payments or price reductions to its new car dealers as rewards for participating in
advertising and sales support programs, it is granting a(n) promotional allowance
________ consists of activities undertaken to create, maintain, or change attitudes toward particular people. Person marketing
The owners of the company you work for have developed a core network of suppliers they are working closely with to
ensure an appropriate and dependable supply of products. This is an example of ________ management. supplier development
Advertisements built around dream themes are using which type of execution style? fantasy
A lurker on discussion boards and Web forums is a person who posts irrelevant or inflammatory messages. 0
Marketers describe the way the consumer processes information to arrive at brand ys as ________. alternative evaluation
Because of ________, a company cannot make its product illegally similar to a competitor's already established product. patent laws
When it comes to international distribution channels, _______ procure products from their entry point to final users and
buyers. Channels within foreign nations
Which product(s) will most likely be intensively distributed? Coca Cola
Introducing a new product into the market is called commercialization
Today, marketers are moving toward viewing communications as managing the ________ over time. customer relationship
The PLC concept can be applied by marketers as a useful framework for describing how products and markets work
Companies are always looking for ways to increase face-to-face selling time. All of the following are ways to accomplish reducing the number of customers each sales
this goal EXCEPT rep must visit
For primary data to be useful to marketers, it must be relevant, current, unbiased, and ________. accurate
Which method could a marketing researcher use to obtain information that people are unwilling or unable to provide? observational
Lawyers, accountants, and other professionals typically price by adding a standard markup for profit. This is known as cost-plus pricing
Each of the following economic factors can have a strong impact on a firm's pricing strategy EXCEPT the reseller's reaction to price changes
Paper, pencils, lubricants, paint, nails, and brooms are examples of ________. supplies
Information collected from online databases is an example of ________ data. secondary
Which method could a marketing researcher use to obtain information that people are unwilling or
unable to provide? observational
CellTones, a new company selling several lines of cellular phones, has closely modeled its products after
successful products that are already in the marketplace. As it prepares to enter the market with its new
products and services, which of the following should concern CellTones the most? patent laws
A firm is using ________ when it charges a high, premium price for a new product with the intention of
reducing the price in the future. price skimming
A hickory rocking chair, handmade by an Amish woodcarver in Lancaster, Pennsylvania, from locally
grown wood is an example of a(n) ________. specialty product
pricing below cost to drive out
Which of the following would most likely be considered predatory pricing? competitors is wrong
When consumers are highly involved with the purchase of an expensive product and they perceive
significant differences among brands, they most likely will undertake ________. complex buying behavior
An advantage of a vertical marketing system (VMS) is that it acts as a ________ system unified
Channel members should be evaluated using all of the following criteria EXCEPT which one? channel leadership
are easy to measure in comparison to
Demographic variables are so frequently used in market segmentation because they ________. many other methods
In the proper order, identify the correct terms for these intermodal transportation combinations: rail and
truck, water and truck, water and rail. piggyback; fishyback; trainship
Exclusive territorial agreements are normal in franchises
without communication from
Federal legislation on price-fixing requires that sellers set their prices competitors
When managers use small convenience samples such as asking customers what they think or inviting a
small group out to lunch to get reactions, they are using ________. informal surveys
In one way or another, most large companies sell to ________. other organizations
Banks, credit companies, insurance companies, and other businesses that help finance transactions or
insure against the risks associated with the buying and selling of goods and services are referred to as
________. financial intermediaries
When using price steps, the seller must establish perceived ________ that support the price differences. quality differences
Government organizations tend to favor ________ suppliers over ________ suppliers. domestic; foreign
The creation of a successful new product depends on a company's understanding of its : customers, competitors, and markets
In many industries, traditional intermediaries are dropping by the wayside because of changes in ________
and the growth of ________ marketing. technology; direct and online
Which of the following is NOT one of the main types of off-price retailers? category killers
Buy it now is the message of sales promotion
your new employer has asked you, as a new marketing graduate, to develop a group of potential
customers who might respond in a similar way to a given set of marketing efforts. you have been asked to
develop a(n) ________. market segment
A price at which independent firms deal
Arm's length price can be defined as with each other
The growing trend of using a group of people from sales, marketing, engineering, finance, technical
support, and even upper management to service large, complex accounts is known as ________ selling. team
Which of the following is an element of developing an advertising strategy? selecting advertising media
Marketers should be aware of laws, government agencies, and pressure groups that influence or limit
various organizations and individuals in a given society. This is most accurately described as the ________
environment. political
Which promotional mix strategy directs marketing efforts toward final consumers? pull
Markets can be segmented into groups of nonusers, ex-users, potential users, first-time users, and
regular users of a product. This method of segmentation is called ________. user status
A(n) _____ is used to manage international marketing by simply shipping out goods. export department
Which group determines a product's position relative to competing products? consumers
The ________ environment consists of factors that affect consumer purchasing power and spending
patterns. economic
They have filled the ultralow-priced, high-volume gap by buying at less-than-regular wholesale prices and
charging consumers less than retail. Off-price retailers
It is considered socially irresponsible when the marketing of adult products spills over into the ________
segment. child
It includes all the activities involved in selling products or services directly to final consumers for their
personal, nonbusiness use. Retailing
An advertising objective is classified by its primary purpose, which is to inform, persuade, or remind
When Burger King targets children, teens, adults, and seniors with different ads and media, it is practicing
________ segmentation. age and life cycle
Which of the following is the set of benefits a company promises to deliver the customer to satisfy their
needs? a value proposition
In order to get their new products to market more quickly, many companies are adopting a faster, team-
oriented approach called team-based new-product development
Persuasive advertising becomes ________ advertising when a company directly or indirectly compares its brand with one or more other
brands. comparative
________ is the systematic design, collection, analysis, and reporting of data relevant to a specific marketing
situation facing an organization. Marketing research
________ are consumer products that the consumer either does not know about or knows about but does
not normally think about buying. These products require a lot of advertising, personal selling, and other
marketing efforts. Unsought products
Which of the following is NOT an example of the type of public that is part of a company's marketing
environment? marketing department
A distinguishing feature of a contractual VMS is that coordination and conflict management among the
independent members of the channel are attained through contractual agreements
________ is a person's pattern of living as expressed in his or her psychographics, including his or her
activities, interests, and opinions. Lifestyle
Many companies now use a combination of phone, e-mail, fax, Internet, and other technologies to
provide ________ . support services
Geotargeting allows an advertising campaign to concentrate on a fixed locale through mobile technology 0 True according to Google
Which of the following transportation modes is used for digital products? the Internet
________ is defined as the use of commercial marketing concepts and tools in programs designed to
influence individuals' behavior to improve their well being and that of society. Social marketing
Service businesses boost the world economy and in turn a globalizing economy boosts the service
industry. 0 True according to Google
Favorite Memories specializes in serving gift shoppers that major competitors overlook and ignore. Which
of the following best describes Favorite Memories? market nicher
Michael Porter has identified ____________forces that decide the intrinsic long-run attractiveness of a
market or market segment. Five
Which type of store is much larger than regular supermarkets and offers a large assortment of routinely
purchased food products, nonfood items, and services? superstore
Advertisements built around dream themes are using which type of execution style? fantasy
Costs that vary directly with the level of production are referred to as variable costs
you are about to test hypotheses about decreasing sales in certain markets and their causes. you are
involved in what type of research? causal
A ________ is the way consumers perceive an actual or potential product. product image
A person's attitudes fit into a pattern, and to change one attitude may require difficult adjustments in
many others. Thus, a company should ________ try to fit its products into existing attitudes rather than
attempt to change attitudes. usually
Because of ________, a company cannot make its product illegally similar to a competitor's already
established product. patent laws
Which concept holds that achieving organizational goals depends on knowing the needs and wants of
target markets and delivering the desired satisfactions better than competitors do? marketing
A(n) ________ is a name, term, sign, symbol, design, or a combination of these, that identifies the maker or
seller of a product or service. brand
Which message execution style depicts average people using a product in an everyday setting? slice of life
you have decided to use only closed-end questions on your survey. Which of the following questions
would NOT be found on your survey? What do you like about your teacher?
Advertising ________ define the task that advertising must accomplish with a specific target audience during a specific
period of time. objectives
What is the term used to identify the individuals in a company who travel to call on customers in the field? outside sales force
Unsolicited e-mail advertising is known as _______. Spam
to address the issue of overdemand for a
Which of the following is a reason for a company to raise its prices? product
A company or store gains a(n) ________ by differentiating its products and delivering more value. competitive advantage
After company identifies primary competitors, it must look out for All of the above
Manufacturers must comply with specific laws regarding product quality and safety
that already exists but was collected for a
Secondary data consists of information ________. different purpose
The final step in the marketing process is ________. capturing value from customers
All too often companies today have failed to ________ their various communications channels, resulting in a hodgepodge
of communications to consumers. integrate
Blogs play an important curatorial role in social media because some popular blogs are followed by people seeking the
best and most interesting ideas. 0 Google and logic says otherwise
All of the following are stages in the PLC EXCEPT adoption
Most companies practice strong PRM to forge long-term relationships with channel members. What does PRM stand for? partner relationship management
Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor is called advertising
Shampoo marketers rate buyers as light, medium, or heavy product users. This is ________ segmentation. usage rate
A(n) ________ is the set of actual and potential buyers of a product. market
Which concept holds that firms must strive to deliver value to customers in a way that maintains or improves the
consumer's and society's well-being? societal marketing
According to one analyst, a Harley-Davidson motorcycle can make you feel like the toughest, baddest guy on the block.
Harley-Davidson promotes its motorcycles with images of independence, freedom, and power. Harley-Davidson has
created a ________. brand personality
A salesperson's ________ is often related to how well he or she meets a sales quota. compensation
In routine buying situations, which members of the buying center have formal or informal power to select or approve the
final suppliers? deciders
Break-even pricing, or a variation called ________, is when the firm tries to determine the price at which it will break even
or make the profit it is seeking. target profit pricing
Personal selling is the least expensive tool in the marketing communications mix. 0
These are sometimes several stores grouped together. These stores offer prices as low as 40 percent below retail on a
wide range of mostly surplus, discounted, or irregular items. Factory outlets
Price-fixing, predatory pricing, retail price maintenance, and deceptive pricing are examples of major public policy issues in pricing
Steve's Physco Skates sells its products to Wal-Mart, who then sells them to the consumer. This is an example of a(n) indirect marketing channel
Mark's Markers, a manufacturer of color markers, has required its dealers to charge a specified retail price for its markers.
Mark's is most likely guilty of retail price maintenance
One of Dr. Albrecht's dental assistants told the dentist he should buy a machine that would sterilize his tools without using
any water because water tends to cause the tools to rust or corrode over time. In terms of the buying center, the dental
assistant had the role of ________. influencer
you have just taken a new position in an organization and you're learning about the job functions of your new colleagues.
you observe that your marketing manager is heavily involved in the process of building and maintaining profitable
customer relationships. your marketing manager frequently speaks about the need to deliver superior customer value and
satisfaction. your manager is concerned with which one of the following? customer relationship management
In marketing research, the ________ phase is generally the most expensive and most subject to error. data collection
Marketers of automobiles, financial services, and travel are most likely to use which of the following types of
segmentation? income
promotions is wrong: Kindly Update
Use of telemarketing in B2B has increased at the expense of: personal selling correct one
Because of the scarcity of good secondary data, international researchers often must collect their own primary data. An
initial problem with this collection is developing good ________. samples
Although there are many differences between business buying behavior and consumer buying behavior, both respond to
the same four stimuli: product, price, promotion, and ________. place
It shows how large a business should be, to be
The long-run average cost curve (LRAC) helps the producer understand which of the following? most efficient
________ from marketing communications may suggest changes in the promotion program or in the product offer itself. Feedback
Which of the following would lead to greater competition in the maturity stage of the PLC? overcapacity
________ the manufacturer or service provider is the set of firms that supply the raw materials, components, parts,
information, finances, and expertise needed to create a product or service. parallel with : is wrong
The purpose of a training program for salespeople is to teach them about all of the following EXCEPT the company retirement benefits
Under the following, the market consists of a few sellers who are highly sensitive to each other's pricing and marketing
strategies. oligopolistic competition
Communication through the mail is categorized as a(n) ________ communication channel. personal
The purchasing agent at your company is working with engineers and users to define the items to purchase by describing
general characteristics and quantities needed. He is also ranking the importance of reliability, durability, and price. The
buyer is preparing a(n) ________. general need description
Which of the following is a customer-oriented approach to pricing? value-based pricing
As a result of the great success of corporate chains, many independent stores chose to band together in either a voluntary
chain or a(n) retailer cooperative
Which type of statement first states the product's membership in a category and then shows its point-of-difference from
other members of the category? positioning statement
Wrong Answer: Marketing
intelligence gathering is more
focused on gaining insights into
consumer activities than
Which of the following statements regarding marketing intelligence is true? competitors' activities.
MTV targets the world's teenagers, who have similar needs and buying behavior even though they are located in different
countries. This is called ________ segmentation. intermarket
your colleague is confused about using the marketing research process, as he knows that something is wrong but is not
sure of the specific causes to investigate. He seems to be having problems with ________, which is often the hardest step Wrong Answer:
to take. selecting a research agency
Diana Dion is currently researching data sources from within her company to make marketing decisions.
Diana is making use of ________ databases. internal
your marketing department is attempting to improve strategic decision making, track competitors'
actions, and provide early warning of opportunities and threats. To achieve this goal, which of the
following would be the best for your department to use? the Internet
If a seller charges more than the buyer's perceived value, the company's sales will suffer
During the ________ stage of the business buying decision process, the buying center assesses the
proposals. supplier selection
Relationship selling recognizes Long-term business relationships OPTION B IS REALLY FUNNY
Ryanair offers free flights to a quarter of its customers and rock-bottom prices to many of its other
customers. Ryanair then charges for all extra services, such as baggage handling and in-flight
refreshments. Which of the following best describes Ryanair's pricing method? low-cost pricing
Mach 3 razor blades must be used in the Mach 3 razor. Which type of pricing is most likely used? captive-product pricing
Big Moose Toys is a market pioneer introducing a modern version of Bullwinkle the Moose, a character
from an animated television series originally broadcast in the 40s and 60s. Their version of Rocky the
Flying Squirrel, another character from the show, targeted to baby boomers was a strong success. They
need to make the new launch strategy for Bullwinkle consistent with the intended product position
Marketing logistics involves getting the right product to the right customer in the right place at the right gathering customer's ideas for new
time. Which one of the following is NOT included in this process? products
Which type of research would be best suited for identifying which demographic groups prefer diet soft
drinks and why they have this preference? descriptive
A society's basic values, perceptions, preferences, and behaviors are all part of its ________ environment cultural
your marketing department is currently researching the size, density, location, age, and occupations of
your target market. Which environment is being researched? demographic
A consumer organization, environmental group, or minority group has challenged your firm's stand on a
local issue. your firm is being challenged by a ________ public. citizen-action
Creating word-of-mouth campaigns by cultivating opinion leaders and getting them to spread information
about a product or service to others in their communities is known as buzz marketing
Which of the following is NOT a type of factor in a company's macroenvironment? competitive
Which type of distribution is used when the producer wants more than one, but fewer than all, of the
intermediaries who are willing to carry its products? selective
________ are products and services bought by final consumers for personal consumption. These include
convenience products, shopping products, specialty products, and unsought products. Consumer products
Marketing researchers usually draw conclusions about large groups of consumers by studying a small
________ of the total consumer population. sample
Lexus targets wealthy consumers with similar needs and buying behaviors, even though the consumers
are located in different countries. This is an example of ________. Intermarket segmentation
After the purchase of a product, consumers will be either satisfied or dissatisfied and engage in ________. postpurchase behavior
Selecting which segments of a population of customers to serve is called ________. target marketing
The buyer decision process consists of five stages. Which of the following is NOT one of these stages? Variety-seeking buying behavior
Which of the four Ps describes the goods-and-services combination the company offers to the target
market? product
Consumers position products and services ________. with or without the help of marketers
An increasing number of retailers and wholesalers have created their own ________, also called store
brands. private brands
Which stage of the new-product development process focuses on finding new ways to solve customer customer-centered new-product
problems and create more customer-satisfying experiences? development
In the communication process, the reaction of the receiver after being exposed to a message is called the response
Building, keeping, and growing profitable relationships by delivering customer value and satisfaction is
called ________. customer relationship management
We define a ________ as anything that can be offered to a market for attention, acquisition, use, or
consumption and that might satisfy a want or need. product
________ are those products purchased for further processing or for use in conducting a business. Industrial products
The decision-making unit of a buying organization is called the ________. buying center
When managers use small convenience samples such as asking customers what they think or inviting a
small group out to lunch to get reactions, they are using ________. informal surveys
to gather and integrate information a
What is the purpose of a data warehouse? company already has
An e-mail from Amazon.com offers free shipping on your next purchase of more than INR 2000. This is an
example of sales promotion
Failure to enter the current price into a retailer's system may result in charges of scanner fraud
Which of the following are the three major types of vertical marketing systems? corporate, contractual, and administered
Underpriced products sell very well, but they produce less revenue than they would have if price were raised to the following level perceived value
Which promotional tool is most effective in building up buyers' preferences, convictions, and, most
importantly, actions? personal selling
________ is a new-product development approach in which one company department works to complete
its stage of the process before passing the new product along to the next department and stage. Sequential product development
Tiffany & Co jewelry can only be found in a limited number of intermediaries. This is an example of
________ distribution. exclusive
Specialty stores carry ________ with ________ within them. narrow product lines; deep assortments
Marketing communicators must do all of the following EXCEPT deliver products to the customer
Which of the following is NOT an example of a specialized and highly-targeted media that an advertiser might use to reach smaller
customer segments? network television
Companies that use a customer sales force structure organize their salespeople by industry
The Internet makes it easy for consumers
to view, interact with, and create
Which of the following statements about the Internet is most accurate? marketing content.
Although test marketing costs can be high, they are often small when compared with the costs of a major mistake
Which of the following is an example of a multichannel distribution system? JC Penney's catalog and retail store sales
A marketer focuses on several commonalities among all consumers. This marketer appears to be
engaging in ________ undifferentiated marketing
Information collected from online databases is an example of ________ data. secondary
Chicken of the Sea brand tuna sells more than the same size Kroger brand tuna, even though the Kroger
tuna costs $0.14 less per can. Chicken of the Sea has brand ________ equity
Gretchen Kabor has formal authority to select the suppliers and arrange terms of purchase for many of
the items her firm uses. Her role in the buying center is that of ________. decider
It is usually the most expensive component of the
Personal selling is important in almost every company because: marketing mix.
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