Question 1

Which one of the following is a performance measurement tool that looks at four areas that contribute to a company's performance?

Accepted Answer

The balanced scorecard approach is a performance measurement tool that looks at four areas that contribute to a company's performance: financial, customer, internal business processes, and learning and growth. The market value method is focused solely on measuring a company's financial worth, the triple bottom line method measures a company's performance in terms of its social, environmental, and financial impact, and the information control approach is not a recognized performance measurement tool.

Question 2

________ is the search for the best practices among competitors or non-competitors that lead to their superior performance.

Accepted Answer

Benchmarking is the process of identifying and studying the leading practices and processes of other organizations in order to improve performance. It involves identifying best practices from competitors or non-competitors and adapting them to improve an organization's own performance. Factors analysis is a statistical method used to identify underlying factors that explain the observed variations in a set of variables, while total quality management is a management approach that seeks to optimize quality in all aspects of an organization's operations. Market positioning is the process of identifying and communicating a product or brand's unique value proposition to its target market. Out of the four options, benchmarking is the only one specifically related to identifying and adopting best practices from other organizations.

Question 3

When data is analyzed and processed, it becomes ________.

Accepted Answer

Information is the result of analyzing and processing data. It is the organized and meaningful output that can be used for decision-making, understanding trends, and solving problems. While data is raw and unorganized, information is processed and structured in a way that makes it useful. Choices A, C, and D are not accurate descriptors of what data becomes after analysis and processing.

Question 4

Contours, Inc., quality auditors pull one part from the production line every 15 minutes. These parts are measured against the production print; any variation that is beyond acceptable levels is reported to the machine operators. Contours, Inc., is using ________ control.

Accepted Answer

Concurrent control involves monitoring and adjusting ongoing activities to ensure that goals are achieved, which is what Contours, Inc., is doing by checking parts during the production process.

Question 5

Raw, unanalyzed facts are called ________.

Accepted Answer

Raw, unanalyzed facts are called data. Information is the result of data analysis and interpretation, while a database is a collection of data that is organized and searchable. Factoids are small, unimportant pieces of information that may or may not be true.

Question 6

The information provided by the customer who brings a product in for warranty work can be used for ________ control

Accepted Answer

The information provided by a customer for warranty work is used for feedback control, as it helps the organization understand past performance and make necessary adjustments.

Question 7

Every March, Bill, who owns and operates a small retail shop, takes a large box of receipts and invoices to his accountant so the accountant can file Bill's taxes in April. Only then does Bill know if his business has been profitable. Bill could benefit from a(n) ________.

Accepted Answer

A management information system would provide Bill with real-time or regular updates on the financial health of his business, rather than having to wait until after taxes are filed to determine profitability. This would allow him to make adjustments and take proactive steps to improve his business operations throughout the year.

Question 8

The ________ ratios measure an organization's ability to meet its current debt obligations.

Accepted Answer

Liquidity ratios are used to measure the ability of a company to meet its short-term debt obligations by comparing its current assets to its current liabilities. This gives an indication of the company's overall liquidity or ability to pay off its debts as they fall due. Activity ratios measure the efficiency of the company's operations, leverage ratios measure the company's level of debt and its ability to pay off long-term debt obligations, and profitability ratios measure the company's ability to generate profits from its operations.

Question 9

________ is when a manager in the work area interacts directly with employees to maintain supervision.

Accepted Answer

Management by walking around (MBWA) is a technique where a manager walks around the work area and interacts with employees to maintain supervision. It helps to build relationships with employees, identify and solve problems, and stay informed about the day-to-day operations of the business. Preventive maintenance (A) is a process of regular maintenance to prevent breakdowns and reduce downtime. Proactive control (C) involves taking actions to prevent problems from occurring. Feedforward control (D) is a type of control that focuses on preventing problems before they occur by planning and implementing controls. While these techniques are important, MBWA is the most relevant choice for direct interaction with employees for supervision.

Question 10

Contours, Inc., uses its budget for labor hours as a ________ tool.

Accepted Answer

The answer of Contours, Inc., uses its budget for labor...

Question 11

Donald discovers major flaws in the packaging department. He consults the production manager and formulates control measures to improve packaging. Here, Donald is using the ________ control.

Accepted Answer

The answer of Donald discovers major flaws in the packaging...

Question 12

The launch went off without a hitch but the space capsule directed toward Neptune has veered off course. NASA sends signals to change the direction of flight to get it back on track. NASA is using ________ control.

Accepted Answer

The answer of The launch went off without a hitch...

Question 13

________ ratios measure how efficiently the firm is using its assets.

Accepted Answer

Activity ratios measure how efficiently the firm is using its assets, including how quickly inventory is sold, how quickly accounts receivable are collected, and how efficiently assets are used to generate sales.

Question 14

Devon interacts directly with the employees in the work area to identify problem areas. He works with various departments to obtain a holistic idea of the business. This type of direct supervision is an example of ________ control.

Accepted Answer

Devon is interacting directly with employees to identify problem areas, which is an example of direct supervision.

Question 15

The ________ approach to performance measurement was introduced as a way to evaluate organizational performance from more than just the financial perspective.

Accepted Answer

The balanced scorecard approach to performance measurement introduced four different perspectives: financial, customer, internal processes, and learning and growth. This approach allows for a more holistic view of organizational performance beyond just financial results.

Question 16

Ruth, a financial consultant, determines her client's leverage ratio to be very high. What suggestion could Ruth give to help the firm reduce its leverage ratio?

Accepted Answer

Paying back part of its debt will reduce the amount of debt in relation to equity, therefore reducing the firm's leverage ratio. Increasing the money supply by selling assets would also reduce the ratio, but it would not be the best suggestion as it may not be practical for the firm's operations. Maintaining more current assets than current liabilities and reducing the sales to total assets ratio would not directly address the issue of a high leverage ratio.

Question 17

Which one of the following ratios examines the organization's use of debt to finance its assets and its ability to meet the interest payments on the debt?

Accepted Answer

Leverage ratios examine the extent to which a company is using debt to finance its assets, and its ability to meet the interest payments on the debt. Examples of leverage ratios include debt-to-equity ratio and interest coverage ratio.

Question 18

Management by walking around is an example of ________ control.

Accepted Answer

Management by walking around is a type of concurrent control, which involves monitoring and adjusting ongoing activities as they occur. This technique involves managers walking around the workplace and observing employees in action, asking questions, and providing on-the-spot feedback. It allows managers to identify and address problems in real time, and can improve communication and accountability within the organization.

Question 19

Elaine wants to analyze her company's ability to meet its current debt obligations. Which one of the following ratios is most helpful to Ruth in analyzing this?

Accepted Answer

The current ratio is the ratio of current assets to current liabilities and is a measure of a company's ability to pay off its short-term debt obligations. A ratio of 1 or greater generally indicates that the company can meet its current debt obligations. Therefore, it is the most helpful ratio in analyzing a company's ability to meet its current debt obligations. The other ratios listed are more focused on profitability or efficiency measures.

Question 20

Which one of the following ratios measures how efficiently and effectively the firm is using its assets to generate revenue?

Accepted Answer

The answer of Which one of the following ratios measures...

Quiz 18: Monitoring and Controlling