Question 1

Understanding the relationship between business processes and strategy is an important basic principle of business process management. Which of the following is an example of a strategy: (i) using general ledger software in the accounting information system, (ii) keeping prices low by controlling costs, (iii) providing goods and services that customers see as unique.

Accepted Answer

Strategies are overarching plans or approaches to achieve competitive advantage, such as controlling costs to keep prices low (II) and offering unique goods and services (III). Using general ledger software (I) is a tactical decision, not a strategy.

Question 2

MTP Corporation has performed a value-added analysis of costs for three business processes. The costs were classified on a three-point scale, where Level One represented activities with the greatest value added. The results are shown below: $$\begin{array} { c r r r } 
& \text { Process A } & \text { Process B } & \text { Process C } \
\% \text { of costs at Level 1 } & 51 \% & 46 \% & 36 \% \
\% \text { of costs at Level 2 } & 23 \% & 16 \% & 17 \% \
\% \text { of costs at Level 3 } & 26 \% & 38 \% & 47 \% \
 \text { Total }& 100 \% & 100 \% & 100 \% \

\end{array}$$
-Based on the value-added analysis alone, which process should MTP work on first?

Accepted Answer

Process C has the highest percentage of costs at Level 3, indicating the least value-added activities, suggesting it should be prioritized for improvement.

Question 3

As part of business process management, organizations should prioritize potential process improvements. Tools to accomplish that goal include:

Accepted Answer

Cost/benefit analysis is a tool used to evaluate the potential gains and costs associated with a process improvement, helping organizations prioritize which improvements to implement.

Question 4

MTP Corporation plans to hire a consultant for a business process management project. Which of the following is most true?

Accepted Answer

It is important for a consultant to have a solid understanding of MTP's competitive strategy in order to align the business process management project with it. Option A is not a valid choice since hiring an external consultant can bring in a fresh perspective and expertise. Option B is not detailed enough and may not cover all aspects of the project. Option C is not a valid choice since the internal audit department may not have the required expertise in business process management.

Question 5

Which of the following statements about activity-based management is most true?

Accepted Answer

Activity-based management can be a valuable tool for business process management as it focuses on identifying and managing the activities that drive value in a business process. It helps to optimize the process by eliminating non-value added activities, reducing costs, and improving efficiency. However, it should also consider the use of technology to support the process improvement efforts. People and technology are both important aspects of activity-based management. Flowcharts are often used to illustrate the process and to identify areas for improvement.

Question 6

MTP Corporation plans to use activity-based management in revising its sales / collection process. Activity-based management would be helpful in which steps of the generalized model of business process management: (i) selecting a business process, (ii) analyzing process-related data, (iii) prioritizing process improvements.

Accepted Answer

Activity-based management can be applied to all steps: selecting a business process, analyzing process-related data, and prioritizing process improvements, as it provides detailed insights into cost drivers and process efficiencies.

Question 7

Based on the basic principles of business process management discussed in the text, which of the following is the best defined deliverable for an external consultant?

Accepted Answer

The answer of Based on the basic principles of business...

Question 8

To complete the third step of the generalized model of business process management, managers could use: (i) interviews, (ii) information technology.

Accepted Answer

The third step of the generalized model of business process management involves analyzing and improving the process. To do so, managers can use both interviews and information technology. Interviews can provide valuable insights on how the process is currently functioning and areas that need improvement. Information technology, such as process modeling software, can help visualize the process flow, identify bottlenecks, and test potential improvements. Therefore, both options are useful in completing this step.

Question 9

Business process management can involve information technology, such as: (i) flowcharting software, (ii) relational database software, (iii) spreadsheets.

Accepted Answer

Business process management often involves the use of information technology tools to help model, automate, and analyze various aspects of business processes. Flowcharting software can be used to visually represent process flows and identify potential inefficiencies or improvements. Relational database software can be used to store and manage large quantities of data related to process inputs, outputs, and performance. Spreadsheets can be used to perform calculations, create charts, and analyze data related to process metrics. Therefore, all three options (I, II, and III) are commonly used in business process management.

Question 10

Which type of flowchart is least likely to be used in business process management?

Accepted Answer

The answer of Which type of flowchart is least likely...

Question 11

One basic idea of business process management is understanding how processes interact with organizational strategy. Which of the following best demonstrates that idea?

Accepted Answer

Redesigning the factory to reduce inventory movement is an example of how a process can be aligned with organizational strategy. The goal of reducing inventory movement is likely to improve efficiency and reduce costs, which can align with the strategic goal of increasing profitability. The other options do not necessarily demonstrate a clear alignment between processes and organizational strategy.

Question 12

Which of the following practices most clearly violates one of the basic principles of business process management?

Accepted Answer

Business process management emphasizes continuous improvement and responsiveness. Waiting until the end of a project to respond to negative feedback contradicts the principle of ongoing evaluation and adaptation.

Question 13

The first step in business process management is selecting a process and defining its boundaries. Which of the following has the best defined boundary?

Accepted Answer

Calculating cost variances has a clear start and end point, making it easier to define its boundaries compared to the other options, which are broader and more ongoing processes.

Question 14

Which of the following is least likely to be a value-added activity?

Accepted Answer

The answer of Which of the following is least likely...

Question 15

NTN Corporation has been maintaining its sales records in a spreadsheet. As part of a business process management initiative, NTN wants to develop a relational database instead. The relational database should include separate tables for: (i) customers, (ii) inventory, (iii) journal entries.

Accepted Answer

The answer of NTN Corporation has been maintaining its sales...

Question 16

The managers of SBT Corporation are following the generalized model for a business process management project. Which of the following would be most useful in the fourth step?

Accepted Answer

The answer of The managers of SBT Corporation are following...

Question 17

MTP Corporation has performed a value-added analysis of costs for three business processes. The costs were classified on a three-point scale, where Level One represented activities with the greatest value added. The results are shown below: $$\begin{array} { c r r r } 
& \text { Process A } & \text { Process B } & \text { Process C } \
\% \text { of costs at Level 1 } & 51 \% & 46 \% & 36 \% \
\% \text { of costs at Level 2 } & 23 \% & 16 \% & 17 \% \
\% \text { of costs at Level 3 } & 26 \% & 38 \% & 47 \% \
 \text { Total }& 100 \% & 100 \% & 100 \% \

\end{array}$$
-Based on the value-added analysis, which of the following statements is / are true: (i) Process A does not need any changes since more than half its costs are value-added, (ii) Process C should be abandoned since almost half its costs are non-value added.

Accepted Answer

Process A still has a significant portion of costs that are not value-added, so it may benefit from improvements. Process C having high non-value-added costs does not necessarily mean it should be abandoned; it may need optimization instead.

Question 18

Rose and Stacy were talking about redesigning training processes for newly-hired auditors at their CPA firm. Which of the following most clearly violates one of the basic principles of business process management?

Accepted Answer

This choice violates the basic principle of business process management which is to focus on the objectives and goals of the process, rather than on personal preferences or interests. The decision to keep demonstrating the general ledger software is not based on the objective of training new auditors to help clients, and may not be an effective use of training time and resources.

Question 19

Carlos and Gabrielle are forming a team to look at better ways for collecting data on employee performance at DHW Corporation. In keeping with the basic principles of business process management, the team should definitely include:

Accepted Answer

Including a member of the sales staff ensures that the team has insights from those directly involved in the processes being evaluated, which aligns with business process management principles of involving stakeholders who are familiar with the current processes.

Question 20

DEH Corporation recently conducted a value-added analysis as part of a business process management project. Results showed that each unit of product absorbed the following costs: assembly, $5.00; quality checking, $2.00; machine depreciation, $3.00. What percentage of those costs is non-value added?

Accepted Answer

The answer of DEH Corporation recently conducted a value-added analysis...

Quiz 13: Bussiness Process Mamagement