Question 1

Many firms choose to achieve target cost through redesign of the product or service because they recognize that design decisions:

Accepted Answer

Redesigning the product or service is an effective way to achieve target cost because design decisions account for much of the total product life cycle costs. This means that changing the design can have a significant impact on the overall cost of the product or service. By making changes to the design, firms can reduce costs and achieve their target cost more easily.

Question 2

The goals of coordinating manufacturing processes, reducing the amount of inventory, and improving overall productivity is particularly important in a:

Accepted Answer

The goals of coordinating manufacturing processes, reducing the amount of inventory, and improving overall productivity are the core principles of Just-in-time (JIT) system. JIT focuses on producing goods based on customer demand, which helps in reducing inventory, to avoid waste, and increase overall productivity. JIT aims to improve the efficiency of the manufacturing process, which in turn reduces the manufacturing cycle time, improves product quality, and increases profitability. Therefore, the correct answer is B.

Question 3

Which of the following is a method of reducing cost by identifying parts in different products that are common and interchangeable?

Accepted Answer

Group technology is a method of reducing costs by identifying parts in different products that are common and interchangeable. This involves grouping similar parts together and standardizing their production. This technique ensures that similar parts are manufactured and assembled in the same way, reducing costs associated with production and inventory.

Question 4

When a firm determines the desired cost for a product or service, given a competitive market price, in order to earn a desired profit, the firm is exercising:

Accepted Answer

This scenario is describing target costing, where the firm starts with the desired profit they want to earn and then sets the cost of the product or service to achieve that goal, while taking into account the competitive market price. Life cycle costing, variable costing, absorption costing, and competitive costing do not necessarily involve starting with a desired profit and working backwards to determine the cost.

Question 5

Generally, firms will price a product more competitively at which stages of the product's sales life cycle?

Accepted Answer

During the maturity and decline stages of a product's life cycle, competition tends to be higher, and the market is often saturated. To maintain or increase market share, firms may price their products more competitively.

Question 6

The theory of constraints (TOC) approach is strategically important in dynamic markets because it leads to:

Accepted Answer

The theory of constraints approach emphasizes identifying and addressing bottlenecks in a production process, allowing for a more responsive and flexible manufacturing environment that can quickly adapt to changes in dynamic markets. While faster data accessibility, setup times, and better customer relationships may be beneficial outcomes of TOC implementation, they are not the strategic focus of the approach.

Question 7

Throughput margin is defined as sales less:

Accepted Answer

Throughput margin is the difference between sales and direct material costs only. It does not take into account other costs such as labor, processing, or manufacturing. This is because throughput margin is focused on the efficiency of the production process and how it can be improved to increase profits.

Question 8

The theory of constraints (TOC) emphasizes which of the following?

Accepted Answer

The theory of constraints (TOC) emphasizes on removing bottlenecks from the production process to improve overall efficiency. While developing competitive constraints and finding and eliminating design constraints can be important aspects of production management, they are not the primary focus of the TOC.

Question 9

The sequence of activities within the firm which begins with research and development, followed by design, and manufacturing, marketing/distribution, and customer service is the:

Accepted Answer

The answer of The sequence of activities within the firm...

Question 10

Henry Ford was an early pioneer in the use of:

Accepted Answer

The answer of Henry Ford was an early pioneer in...

Question 11

Activity-based costing (ABC) and the theory of constraints (TOC) are viewed as methods that are:

Accepted Answer

ABC and TOC are complementary methods that can be used together to take advantage of their respective strengths. ABC provides detailed information on costs and helps identify areas where costs can be reduced, while TOC focuses on improving the overall flow of production and identifying constraints that limit productivity. Used together, these methods can lead to better decision making and improved profitability.

Question 12

Which one of the following is not one of the five steps in TOC analysis?

Accepted Answer

EThe five steps in the Theory of Constraints (TOC) analysis are: 1) Identify the system's constraint(s), 2) Decide how to exploit the system's constraint(s), 3) Subordinate everything else to the above decision, 4) Elevate the system's constraint(s), and 5) If in the previous steps a constraint has been broken, go back to step 1. Options D and E are not part of these steps. Option D focuses on identifying responsible individuals rather than managing constraints, and option E suggests a complete redesign, which is not a step in the TOC process.

Question 13

____________________ is an important first step in value engineering because it identifies critical consumer preferences that will define the product's desired functionality:

Accepted Answer

Consumer analysis is the best choice as it helps in identifying consumer preferences and understanding their needs, which will ultimately define the product's desired functionality. Other options may provide valuable information but may not necessarily focus on identifying critical consumer preferences.

Question 14

Which one of the following is true concerning TOC?

Accepted Answer

It is impossible to determine the correct answer without knowing the options provided. Please provide the options for a valid answer.

Question 15

Reduced time-to-market, reduced expected service cost, and ease-of-manufacture are critical success factors at which stage of the cost life cycle?

Accepted Answer

The critical success factors mentioned - reduced time-to-market, reduced expected service cost, and ease-of-manufacture - are most relevant and impactful during the product design stage. This is because product design decisions determine the product's fundamental attributes, manufacturing processes, and quality levels. Early design stage modifications are much easier to execute and less expensive than later stage changes. Thus, focusing on these critical success factors during the design stage can help companies avoid costly mistakes and improve profitability.

Question 16

Many firms are finding it is difficult to compete successfully on cost leadership or differentiation alone, and they must, in fact, compete on both:

Accepted Answer

The answer of Many firms are finding it is difficult...

Question 17

The sequence of phases in the product or service's life in the market - from the introduction of the product or service to the growth in sales and finally maturity, decline, and withdrawal from the market is the:

Accepted Answer

The answer of The sequence of phases in the product...

Question 18

Concurrent engineering relies on an integrated approach, in which the engineering/design process takes place throughout the cost life cycle using cross-functional teams. Strategically, this concurrent approach should give a firm all of the following except:

Accepted Answer

Concurrent engineering allows for a more efficient and effective design process that saves time and money, and incorporates customer feedback in real time. However, it does not necessarily provide for more detailed analysis of product functionality, as this is dependent on the skills and expertise of the cross-functional team members involved in the process.

Question 19

During which stage of the sales life cycle of a product do sales continue to increase but at a decreasing rate, and competition tends to focus on cost?

Accepted Answer

During the maturity stage of the sales life cycle, sales continue to increase but at a decreasing rate as the market becomes saturated. Competition tends to focus on cost as companies try to maintain their market share.

Question 20

Which of the following are computer-based databases that include comprehensive information about the firm's cost drivers?

Accepted Answer

The answer of Which of the following are computer-based databases...

Quiz 13: Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing