Question 1

In the inbound logistics activity of a value chain, the manufacturer receives, stores, and disseminates inputs to a product.

Accepted Answer

Inbound logistics involves receiving, storing and disseminating inputs to a product. This activity is typically carried out by manufacturers as they bring in raw materials and components for production.

Question 2

Define the primary activities in a generic value chain.

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Question 3

Explain linkages with an example.

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Question 4

A(n) ________ is a network of activities that generate worth by transforming inputs into outputs.
A) business process
B) competitive strategy
C) value chain
D) information system
E) linked investment

Accepted Answer

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Question 5

Porter defined value as the amount of money that a customer is willing to pay for a resource, product, or service.

Accepted Answer

This is the correct definition of value according to Porter.

Question 6

Which of the following defines a repository?
A) a backup plan of action in case of emergencies
B) a department devoted specifically for market research
C) a place where finished goods undergo a quality check before shipment
D) a collection of something, such as data or raw materials
E) a financial center for storing overnight balances

Accepted Answer

A repository is a collection of something, such as data or raw materials. Therefore option D is the correct answer. Options A, B, C, and E do not define a repository.

Question 7

What are the various support activities in a value chain?

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Question 8

In a manufacturing business, which of the following transforms finished goods into cash?
A) warehouse operations
B) manufacturing process
C) sales process
D) outbound logistics
E) inbound logistics

Accepted Answer

The sales process, which includes marketing, selling, and delivering the finished goods to customers, is what transforms finished goods into cash for a manufacturing business. The other options, such as warehouse operations, inbound logistics, and outbound logistics, may be important in the production and storage of the goods, but they do not directly result in the sale and subsequent revenue generation.

Question 9

The primary activity of sales and marketing is the collection, storage, and physical distribution of the products to the buyers.

Accepted Answer

The primary activity of sales and marketing is to identify customer needs and wants, promote and communicate the brand/product offering, and persuade potential customers to make a purchase. While physical distribution may be an important aspect of the process, it is not the primary activity.

Question 10

Briefly describe the concepts of value, margin, and value chain as defined by Porter.

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Question 11

The cost of the business process is the sum of the cost of the inputs and the ________.
A) cost of the activities
B) cost of the outputs
C) value of the outputs
D) value of the products
E) cost of the products

Accepted Answer

The cost of a business process is calculated by adding the cost of inputs, such as labor, materials, and overhead, to the cost of activities necessary to transform those inputs into outputs. The cost of outputs or products is not necessarily included in the cost of the process as it represents the revenue generated by the process. The value of the outputs is also not typically included in the cost calculation. Therefore, the correct answer is A) cost of the activities.

Question 12

Neil creates an application which facilitates the easy storage and access of employee information like name, age, experience, and qualification for his organization. The application is an example of a(n) ________.
A) repository
B) program
C) linkage
D) activity
E) array

Accepted Answer

The application created by Neil is an example of a repository because it stores and provides easy access to employee information. A program is a set of instructions that can perform a specific task, a linkage refers to a connection or relationship between two things, an activity is a specific task or action, and an array is a collection of similar items stored in contiguous memory locations. None of these definitions fit the application created by Neil.

Question 13

Support activities in a value chain include the processes of finding vendors, setting up contractual arrangements, and negotiating prices.

Accepted Answer

Support activities are those that provide necessary support for primary activities in a value chain. Finding vendors, setting up contracts, and negotiating prices are all examples of support activities.

Question 14

Distinguish between the primary and support activities of a value chain.

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Question 15

A business with a differentiation strategy will add cost to an activity only as long as the activity has a positive margin.

Accepted Answer

A differentiation strategy focuses on creating a unique product or service that sets a business apart from its competitors. This often involves adding costs to activities such as research and development, product design, and marketing. However, these costs should be balanced by the ability to charge a higher price for the differentiated product or service. Therefore, a business with a differentiation strategy will only add cost to an activity if it can generate a positive margin, meaning that the added cost will result in a higher price or greater sales volume that more than offsets the added cost.

Question 16

A linkage is a network of activities that generate value by transforming inputs into outputs.

Accepted Answer

A linkage refers to the connection between different components or parts, often in the context of mechanical systems or genetics, rather than a network of activities transforming inputs into outputs, which describes a process or value chain.

Question 17

The total margin of the value chain is the difference between the total value added and the total costs incurred.

Accepted Answer

The total margin of the value chain is indeed the difference between the total value added (total revenue generated) and the total costs incurred (expenses incurred to produce the product/service).

Question 18

The difference between the value that an activity generates and the cost of the activity is called margin.

Accepted Answer

This is the definition of margin.

Question 19

In the value chain, customer service is concerned with inducing buyers to purchase the product and providing a means for them to do so.

Accepted Answer

Customer service in the value chain is primarily concerned with enhancing customer satisfaction and assisting customers in using products or services effectively, rather than inducing buyers to purchase the product, which is more closely related to marketing and sales activities.

Question 20

Explain the concept of business process design.

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Quiz 3: Strategy and Information Systems