Cost

Question 1

Reworking defective parts, spoilage

Answer 1

internal failure

Question 2

costs of inspecting products

Answer 2

appraisal cost

Question 3

labor cost of design components that will not break; most cost effective

Answer 3

prevention cost

Question 4

cost of returns by customers or quality, liability claims

Answer 4

external failure

Question 5

best at reducing defective products, TQM tools: control charts, pareto, fish bone

Answer 5

Six Sigma

Question 6

delay JE until after physical sequences occur (high speed automation env)

Answer 6

backflush costing

Question 7

best action under uncertain conditions (weighted average of payoffs)

Answer 7

Expected Value EV

Question 8

Compare and contrast financials

Answer 8

Benchmark

Question 9

4 functions of a Balanced Scorecard

Answer 9

Financial performance
internal operations
learning and growth
customer satisfaction

Question 10

success in targeted market segments

Answer 10

Customer

Question 11

3 components of Balanced Scorecard

Answer 11

Strategic objectives
targets
strategy initiatives

Question 12

ROI (Return on Investments)

Answer 12

income/avg invested capital

Question 13

RI (Residual Income)

Answer 13

Net Income - Investments (uses avg), capital int on investments

Question 14

Free Cash

Answer 14

NOPAT + deprec - chg working capital - capital expenses

Question 15

EVA (expected value)

Answer 15

NOPAT - capital charge on invested capital (investments x weighted avg cost)

Question 16

ROS (return on Sales)

Answer 16

Net Operating Profit/Sales

Question 17

Benchmarking with other firms

Answer 17

Cross sectional analysis

Question 18

% profit on sales x capital turnover rate

Answer 18

ROI Dupont

Question 19

Times Int earned

Answer 19

NI/int exp

Question 20

Operating Profit margin

Answer 20

Sales-Cogs-admin exp

Question 21

Profit margin

Answer 21

Sales-cogs-tax-int-admin-deprec

Question 22

Int exp shown as % of net sales, common size

Answer 22

vertical financial statement analysis

Question 23

Net sales over time, earnings per share

Answer 23

horizontal analysis

Question 24

Book value per share

Answer 24

Common Stock + Retained earnings/outstanding shares

Question 25

CM

Answer 25

Sales - Variable Costs

Question 26

GM

Answer 26

Sales - COGS

Question 27

Factoring AR

Answer 27

Selling AR to improve turnover

Question 28

Pledging AR

Answer 28

Loan on AR will not improve turnover

Question 29

Maximizes absolute dollars

Answer 29

Residual Income

Question 30

Maximizes % on return

Answer 30

Return on Investments ROI

Question 31

Market risk or non diversified

Answer 31

Systematic Risk

Question 32

Company/business risk or diversified

Answer 32

Unsystematic Risk

Question 33

Maximize income while faced with bottleneck

Answer 33

Theory of constraints

Question 34

trade off between function, product cost and customer satisfaction

Answer 34

Value engineering

Question 35

lower setup costs, flexible equipment, highly skilled laborers, cross trained

Answer 35

Lean Manufacturing

Question 36

higher setup costs, low skilled laborers, dedicated equipment

Answer 36

Mass Manufacturing

Question 37

estimate of how inventory costs are affected by number of shipments and weight of materials

Answer 37

Multiple regression analysis

Question 38

Amount to be ordered while reducing ordering/carrying costs

Answer 38

Economic order quantity

Question 39

Links process flows/managed based on customer demands, pull based continuous

Answer 39

Demand Flow