Question 1

Please calculate the asset turnover rate if sales = $18,000,000; cost of goods sold = $10,000,000; and total assets managed = $10,000,000:
A) 1.8.
B) .67.
C) 1.2.
D) 1.5.
E) .83.

Accepted Answer

The asset turnover rate is calculated by dividing sales by total assets managed. So, $18,000,000 / $10,000,000 = 1.8.

Question 2

Please calculate the profit contribution as a percentage of sales to be used in the ROAM calculation, if sales = $20,000,000; accounts receivable = $8,000,000; and profit contribution = $5,000,000:
A) 20 percent.
B) 40 percent.
C) 50 percent.
D) 5 percent.
E) 25 percent.

Accepted Answer

Profit contribution as a percentage of sales is calculated by dividing the profit contribution by sales and then multiplying by 100. So, $5,000,000 / $20,000,000 * 100 = 25%.

Question 3

The assets that are typically included in the formula for calculating return on assets managed (ROAM) are
A) accounts payable and short-term loans.
B) accounts receivable and notes payable.
C) inventory and fixed assets.
D) accounts payable and inventory.
E) inventory and accounts receivable.

Accepted Answer

Return on assets managed (ROAM) typically includes current assets like inventory and accounts receivable, as these are directly involved in generating sales and profits.

Question 4

District 1 has a poor level of ROAM. However, their profit contribution percentage is acceptable, but they have a very low asset turnover ratio. What might cause this?
A) Selling too many low-margin products
B) Problems with accounts payable
C) Negotiating low selling prices
D) Problems with accounts receivable
E) Excessive selling expenses

Accepted Answer

Problems with accounts receivable can lead to a low asset turnover ratio.

Question 5

Which of the following actions would improve future ROAM performance?
A) Increasing selling expenses
B) Reducing inventory levels
C) Increasing accounts receivable
D) Reducing total sales
E) Reducing short-term notes

Accepted Answer

Reducing inventory levels can improve future ROAM performance as it can free up cash flow, decrease carrying costs, and reduce the risk of obsolete inventory. Increasing selling expenses, increasing accounts receivable, reducing total sales, and reducing short-term notes can all have negative impacts on ROAM.

Question 6

A major advantage of productivity ratios is
A) the ability to integrate sales growth and productivity assessments into one analysis.
B) the ability to compare total productivity to targeted productivity.
C) the inclusion of asset investment considerations in the ratio analysis.
D) that they can be compared directly across the entire sales organization and with other sales organizations.
E) that they eliminate the need for allocation judgments and are therefore viewed as more objective.

Accepted Answer

Productivity ratios allow for direct comparison across different sales organizations, providing a standardized measure of productivity.

Question 7

Which of the following statements regarding productivity analysis is false?
A) The most useful input unit for productivity analysis is total sales per salesperson.
B) Productivity is typically measured in terms of ratios between outputs and inputs.
C) Sales productivity and profitability are highly interrelated.
D) Productivity analysis is managerial oriented.
E) Improvements in sales productivity should be achieved by an increase in output with the same level of input.

Accepted Answer

Total sales per salesperson is not necessarily the most useful input unit for productivity analysis as it only focuses on one aspect of productivity related to sales. Other input units such as labor hours, material costs, and overhead expenses should also be considered in productivity analysis.

Question 8

The most useful input unit for productivity analysis is the
A) product.
B) salesperson.
C) manufacturing worker.
D) sales manager.
E) sales call.

Accepted Answer

The most useful input unit for productivity analysis is the product, as it directly relates to the output of a production process, allowing for a clear measurement of efficiency and effectiveness in converting inputs into outputs.

Question 9

Productivity improvements can be obtained by
A) increasing output.
B) increasing input.
C) increasing output with the same level of input.
D) increasing input with the same level of output.
E) maintaining the same level of input but using less output.

Accepted Answer

Productivity improvements are achieved by increasing output with the same level of input, thus reducing cost and increasing efficiency. Increasing input (option B) may lead to increased output, but it does not necessarily guarantee productivity improvements. Option A (increasing output) and D (increasing input with the same level of output) do not result in productivity improvements. Option E (maintaining the same level of input but using less output) contradicts the definition of productivity improvements.

Question 10

All of the following are characteristics of benchmarking except
A) It is an ongoing measurement and analysis process.
B) It involves comparing an organization's current operating practices to average industry operating practices.
C) It can lead to greater customer satisfaction.
D) It may lead to lower operating costs.
E) It may lead to improved operations.

Accepted Answer

Benchmarking involves comparing an organization's current operating practices to best practices within the industry, not average practices.

Question 11

According to the text, which of the following is not included in the implementation and control phase of the benchmarking process?
A) Communicate benchmark findings and gain acceptance.
B) Establish functional goals.
C) Develop action plans.
D) Implement specific action plans and monitor progress.
E) Recalibrate the benchmark.

Accepted Answer

The answer of According to the text, which of the...

Question 12

A benchmarking study should provide all of the following except
A) a measure that compares performance for the benchmarked process relative to the organization studied.
B) identification of the organization's performance gap relative to benchmarked performance levels.
C) identification of best practices and facilitators that produced the results observed during the study.
D) performance goals for the process studied.
E) a set of solutions to commonly encountered performance problems.

Accepted Answer

A benchmarking study is designed to compare an organization's performance with others in the industry or similar organizations. The purpose of benchmarking is to identify areas for improvement and to learn from best practices employed by others. Therefore, a benchmarking study should provide A) a measure that compares performance for the benchmarked process relative to the organization studied, B) identification of the organization's performance gap relative to benchmarked performance levels, and C) identification of best practices and facilitators that produced the results observed during the study. In addition, D) performance goals for the process studied should be identified. However, a benchmarking study does not necessarily provide a set of solutions to commonly encountered performance problems (E). The study may identify potential solutions but it is up to the organization to determine which solutions are appropriate for its unique circumstances.

Question 13

Which of the following is not considered a key to successful benchmarking?
A) Clearly identify critical activities that will improve quality or service or reduce cost.
B) Properly prepare and benchmark only one activity at a time.
C) Provide adequate resources--financial and personnel.
D) Make sure that you clearly understand the processes of your benchmarking partner company first.
E) Verify that your benchmarking partner company is the best in its class.

Accepted Answer

While it is important to understand the processes of your benchmarking partner company, it is not a key to successful benchmarking. The other options listed (A, B, C, and E) are all considered key to successful benchmarking.

Question 14

____________ is a data-driven methodology that attempts to eliminate defects in any process.
A) Activity-based costing
B) Benchmarking.
C) Six Sigma
D) Productivity analysis
E) Sales analysis

Accepted Answer

Six Sigma is specifically designed to identify and eliminate defects in any process using statistical analysis and data-driven approaches. Activity-based costing, benchmarking, productivity analysis, and sales analysis are all different methodologies used to achieve different goals, and do not necessarily focus on defect elimination.

Question 15

Which is the correct order of the steps involved in the Six Sigma process?
A) Define, measure, analyze, improve, control
B) Define, analyze, measure, improve, control
C) Define, measure, analyze, control, improve
D) Define, analyze, measure, control, improve
E) Measure, define, analyze, improve, control

Accepted Answer

The correct order of steps involved in the Six Sigma process is: Define, Measure, Analyze, Improve, Control. This is often referred to as the DMAIC process.

Question 16

Assessing the success of a sales organization is difficult because so many factors must be considered.

Accepted Answer

Assessing the success of a sales organization involves considering various factors such as revenue, customer satisfaction, sales volume, market share, and more. This makes it a complex and challenging process.

Question 17

When assessing the sales organization, the success of the sales organization must be differentiated from the success of individual salespeople.

Accepted Answer

The success of the sales organization is not the same as the success of individual salespeople. The organization's success is measured by factors such as revenue growth, market share, and customer satisfaction, whereas individual salespeople's success is measured by their own sales targets and metrics.

Question 18

Sales organization effectiveness and salesperson performance are essentially the same.

Accepted Answer

Sales organization effectiveness refers to the overall effectiveness of a company's sales organization, including factors such as sales strategies, processes, technology, and management. Salesperson performance, on the other hand, is specifically related to the performance of individual salespeople within the organization. While there is some overlap between the two concepts, they are not the same thing.

Question 19

Salesperson performance contributes to but does not completely determine sales organization effectiveness.

Accepted Answer

While salesperson performance is an important factor in sales organization effectiveness, it is not the only factor. Other factors such as sales strategy, marketing efforts, organizational structure, and overall business performance can also impact the effectiveness of a sales organization.

Question 20

Results of salesperson performance evaluations are typically tactical.

Accepted Answer

Salesperson performance evaluations typically assess specific, measurable aspects of their day-to-day work, such as sales volume, customer satisfaction ratings, or meeting specific targets. These tend to be tactical rather than strategic evaluations, which would focus on broader performance metrics such as alignment with organizational goals or long-term growth potential.

Quiz 8: Evaluating the Effectiveness of the Organization

Please calculate the asset turnover rate if sales = $18,000,000; cost of goods sold = $10,000,000; and total assets managed = $10,000,000:

Please calculate the profit contribution as a percentage of sales to be used in the ROAM calculation, if sales = $20,000,000; accounts receivable = $8,000,000; and profit contribution = $5,000,000:

The assets that are typically included in the formula for calculating return on assets managed (ROAM) are

District 1 has a poor level of ROAM. However, their profit contribution percentage is acceptable, but they have a very low asset turnover ratio. What might cause this?

Which of the following actions would improve future ROAM performance?

A major advantage of productivity ratios is

Which of the following statements regarding productivity analysis is false?

The most useful input unit for productivity analysis is the

Productivity improvements can be obtained by

All of the following are characteristics of benchmarking except

According to the text, which of the following is not included in the implementation and control phase of the benchmarking process?

A benchmarking study should provide all of the following except

Which of the following is not considered a key to successful benchmarking?

____________ is a data-driven methodology that attempts to eliminate defects in any process.

Which is the correct order of the steps involved in the Six Sigma process?

Assessing the success of a sales organization is difficult because so many factors must be considered.

When assessing the sales organization, the success of the sales organization must be differentiated from the success of individual salespeople.

Sales organization effectiveness and salesperson performance are essentially the same.

Salesperson performance contributes to but does not completely determine sales organization effectiveness.

Results of salesperson performance evaluations are typically tactical.