Test Prep Test Prep Certifications BUSINESS-ENVIRONMENT-AND-CONCEPTS Questions & Answers

• Question 301:

  An increase in the quantity demanded for a product would be associated with a(n):

  A. Increase in the price of a complementary product.

  B. Increase in average household income.

  C. Decrease in the price of that product.

  D. Decrease in the price of a substitute product.

  Correct Answer: C

  

  Choice "c" is correct. The fundamental law of demand holds that there is an inverse relationship between price of the product and the quantity demanded. We move along the demand curve D-D. Choice "a" is incorrect. An increase in complementary product prices would decrease the demand curve (e.g., if PC prices increase, the demand for printers and other peripherals decrease). Choice "b" is incorrect. Increases in consumers and consumer income shift the demand curve itself. Choice "d" is incorrect. A decrease in price for a substitute product (like Pepsi) decreases demand for the other product (Coke).

• Question 302:

  In which stage of supply chain management will integration move external to the firm to involve those outside the firm who are able to work as a unified team in an attempt to obtain slow, profitable growth?

  A. Cross-functional teams.

  B. Integrated enterprise.

  C. Extended supply chain.

  D. Supply chain communities.

  Correct Answer: C

  Choice "c" is correct. In the extended supply chain stage of supply chain management, integration moves external to the firm to involve those outside the firm who are able to work as a unified team in an attempt to obtain slow, profitable growth. Choice "a" is incorrect. In the cross-functional teams stage of supply chain management, the firm's management will turn its attention to consolidation of the various departments that make up operations in order to solve the firm's problems, and the focus will be on customer service. Choice "b" is incorrect. In the integrated enterprise stage of supply chain management, the firm's management will move away from simple consolidation of its operations to an internally-integrated supply chain, which all work together towards the main business issue of the cost of customer service. Choice "d" is incorrect. In the supply chain communities stage of supply chain management, the extended supply chain forms a single competitive entity with a synchronized supply chain and a complex system of networks.

• Question 303:

  In which stage of supply chain management will management move away from simple consolidation of its operations to an internally-integrated supply chain, which all work together towards the main business issue of the cost of customer service?

  A. Cross-functional teams.

  B. Integrated enterprise.

  C. Extended supply chain.

  D. Supply chain communities.

  Correct Answer: B

  Choice "b" is correct. In the integrated enterprise stage of supply chain management, the firm's management will move away from simple consolidation of its operations to an internally-integrated supply chain, which all work together towards the main business issue of the cost of customer service. Choice "a" is incorrect. In the cross-functional teams stage of supply chain management, the firm's management will turn its attention to consolidation of the various departments that make up operations in order to solve the firm's problems, and the focus will be on customer service. Choice "c" is incorrect. In the extended supply chain stage of supply chain management, integration moves external to the firm to involve those outside the firm who are able to work as a unified team in an attempt to obtain slow, profitable growth.

  Choice "d" is incorrect. In the supply chain communities stage of supply chain management, the extended supply chain forms a single competitive entity with a synchronized supply chain and a complex system of networks.

• Question 304:

  Considering the SCOR Model of supply chain operations, which of the following key management processes does collecting and processing vendor payments fall into?

  A. Plan.

  B. Source.

  C. Make.

  D. Deliver.

  Correct Answer: B

  Choice "b" is correct. Once demand has been planned, it is necessary to procure the resources required to

  meet it and to manage the infrastructure that exists for the sources. Collecting and processing vendor

  payments falls into the "source" process.

  Choices "a", "c", and "d" are incorrect, per the above Explanation.

• Question 305:

  Considering the SCOR Model of supply chain operations, which of the following key management processes does implementing changes in engineering fall into?

  A. Plan.

  B. Source.

  C. Make.

  D. Deliver.

  Correct Answer: C

  Choice "c" is correct. The "make" process encompasses all the activities that turn the raw materials into

  finished products that are produced to meet a planned demand. Implementing changes in the engineering

  process falls into the "make" process.

  Choices "a", "b", and "d" are incorrect, per the above Explanation.

• Question 306:

  Considering the SCOR Model of supply chain operations, which of the following key management processes does assessing the ability of the suppliers to supply resources fall into?

  A. Plan.

  B. Source.

  C. Make.

  D. Deliver.

  Correct Answer: A

  Choice "a" is correct. The process of planning consists of developing a way to properly balance aggregate demand and aggregate supply within the goals and objectives of the firm and plan for the necessary infrastructure. Assessing the ability of the suppliers to supply resources is part of the "plan" process. Choices "b", "c", and "d" are incorrect, per the above Explanation.

• Question 307:

  Considering the SCOR Model of supply chain operations, which of the following key management processes does managing accounts receivable and collections from customers fall into?

  A. Plan.

  B. Source.

  C. Make.

  D. Deliver.

  Correct Answer: D

  Choice "d" is correct. The "deliver" process encompasses all the activities of getting the finished product

  into the hands of the ultimate consumers to meet their planned demand. Managing accounts receivable

  and collections from customers falls into the "deliver" process.

  Choices "a", "b", and "c" are incorrect, per the above Explanation.

• Question 308:

  Which of the following is not correct regarding best cost provider strategies?

  A. The overall lowest cost in the industry is not a viable option in best cost strategies because the firm could not compete profit-wise with its differentiation strategy component.

  B. When generic products are not acceptable to buyers, yet they still remain price sensitive to the value they are receiving for their money, the best cost strategy may work well.

  C. The best cost strategy is a combination of the benefits of the cost leadership and differentiation strategies.

  D. The best cost strategy strives to have the firm evaluate and change its value chain such that it can achieve the highest cost among its closest competitors with a quality differentiated product in an effort to obtain the highest profits.

  Correct Answer: D

  Choice "d" is correct because it is not a correct statement. The best cost strategy strives to have the firm evaluate and change its value chain such that it can achieve the lowest (not highest) cost among its closest competitors while matching them on the features desired by consumers. Choices "a", "b", and "c" are incorrect, as they are all true statements regarding best cost provider strategies.

• Question 309:

  When do cost leadership strategies fail?

  A. Buyers have large amounts of bargaining power in the market.

  B. Heavy price competition exists in the market.

  C. Buyers become less price sensitive and start to have brand loyalty.

  D. New entry firms are able to influence buyers to switch to their product by cutting the price of their product for a period of time in an effort to gain market share and increase profits.

  Correct Answer: C

  Choice "c" is correct. If firms overlook the fact that few customers care about the fact that a product is priced lower than others and care more about brand loyalty, cost leadership strategies will fail. Choices "a", "b", and "d" are incorrect, as these are all situations in which cost leadership strategies work well.

• Question 310:

  Which of the following is not considered a factor that increases the bargaining power of the customer?

  A. Much information is available to the customer to compare and contrast features of all products on the market.

  B. One group of customers makes up a large volume of the firm's business.

  C. Buyers have low switching costs of changing products.

  D. The firm is unable to change suppliers easily.

  Correct Answer: D

  Choice "d" is correct. When a firm is unable to change suppliers easily, that is a factor that increases the

  bargaining power of the suppliers. Choices "a", "b", and "c" are incorrect because they all are factors that

  increase the bargaining power of the customer, which are:

  ?Customers make up a large volume of a firm's business.

  ?There is much information available to customers.

  ?The buyers have low switching costs.

  ?There are a high number of alternate suppliers.