B3-M2 Performance Management

Question 1

What are the types of costs on a Quality Control Program

Answer 1

1. Internal failure costs (rework)
2. External Failure costs (non conforming products ex. Responding to complaints, product repairs)
3. Appraisal costs (Statistical quality control procedures; Product testing)
4. Prevention costs (Equipment maintenance)

Question 2

What is the difference between financial and non financial measures

Answer 2

Typically financial measures deal with costs, revenues, or financial reports. Nonfinancial measures generally focus on operational statistics (such as defective products) rather than items measured in dollars.

Question 3

What is “responsibility accounting”

Answer 3

Responsibility accounting is associated with performance reports and a focus on revenues and costs that are within the control of the manager being evaluated.

Managers are not held accountable for revenues and costs that are outside their control.

Question 4

What are the Strategic Business units?

Answer 4

1. Costs - Focus on lowering cost
2. Revenue - Focus on increasing revenue
3. Profit - Focus on improving profit –> Revenue - Cost)
4. Investments (Focus on improving Return of Assets)

Question 5

What is a balance score card?

Answer 5

a strategic management tool that helps businesses measure and improve their performance by tracking multiple types of metrics: