Management/Leadership Principles: Chapter A Flashcards
Casual Forecasting
statistical method that can be used to obtain the equation that best fits a set of data when time series data is not available.
Sensitivity analysis
multiplies the expected profit by the probability level and sums the amounts to determine the overall probability at each production level.
Concept of quality defined as “Fitness for Use”
Quality is products or services that match or exceed customer expectations at an anticipated price.
Exponential smoothing
has minimal data requirements and is used when forecasts are required for a large number of dependent variables.
Cause and effect diagram
Uses a visual to map out a list of factors that are thought to affect a problem or a desired outcome
TQM emphasizes use of a charter and work processes as appropriate
Effective teams will include a clear charter, a work process, and deadlines if appropriate.
Deploy the harvesting approach when?
The customer group is shrinking for a manufacturing industry. Harvesting maximizes cash flow while minimizing investments.
The costs of quality that are incurred in detecting units of product that do not conform to product specifications are referred to as
Appraisal costs. Those costs incurred to detect which products do not conform to specifications before they are shipped. These costs include inspecting products and testing raw materials and work-in-progress
Objectives need to be continually updated to reflect environmental changes? True or False
True
Cost leadership strategies to gain competitive advantage are exemplified by?
Operations with scale economies and Membership warehouses without extra services or amenities. Cost leadership is attained by scale economies or reduction of higher-cost services and amenities
Which type of integration strategy includes upstream development and production activities
Backward vertical integration
In Progressive model building the initial may be extremely ______?
Simple. Progressive model building usually starts with a very simple model that then evolves in complexity over time to yield better results. The factors added at each iteration are based on the decision maker’s comfort level and needs. This keeps the model from becoming more complex than the decision maker can understand.
What are three reasons governments restrict trade?
The government normally restricts trade in order to foster national security, develop new industries, and protect declining industries.
What are the five basic forces that drive industry competition?
Threat of new entrants, the threat of substitute products or services, bargaining power of buyers, bargaining power of suppliers, rivalry among existing firms
The price charged on a consistent basis for a specific product would most likely be lowest during which stage of the product life cycle
Maturity Stage. Why? Because during the maturity stage, competition is at its greatest and costs are at their lowest; thus, prices prices would be at their lowest.
Why is a backward strategy most appropriate when the firm’s current suppliers are not reliable?
Backward integration is appropriate when the firm’s current suppliers are unreliable so the organization has an upstream focus.
What are the four basic stages in the industry life cycles
Introduction, Growth, Maturity, Decline
An organization that seeks competitive advantage in the global marketplace might especially select which competitive strategy?
Synergy: To compete globally, an organization can benefit greatly from external alliances and partnerships.
To remove the effect of seasonal variation from a time series, original data should be?
Divided by the seasonal factor. If the original data (with the four trends) is divided by the seasonal norm, the seasonal component is factored out of the data.
When an organization wishes to enter an industry or change its competitive position, what should it do first?
Structural analysis.
An organization should study the structure of the industry and the competitive forces affecting the structure.
Examples that exemplify a differentiation strategy to gain competitive advantage.
An ice cream brand low in calories and fat, but rich in flavor, A bookstore that offers a coffee shop and a relaxing environment, The most sophisticated global positioning (GPS) system available.
Differentiation strategies add value for customers in ways that differentiate the product or service from competitors. This includes different ingredients, higher quality products and services, and added services.
Two key strategies in an emerging industry are to?
identify and target the most receptive customers and then provide support services for them.
What is most true of a focus strategy to gain competitive advantage?
The competition is usually less intense. Competition is reduced, which helps balance the fact that profits may not be as high as in a larger market.
A manufacturing company produces plastic utensils for a particular market segment at the lowest possible cost. The company is pursuing a cost?
focus strategy. A cost focus strategy aims to be a cost leader for a particular market segment.
A primary part of the total quality management (TQM) philosophy is that gains in efficiency and effectiveness can
be realized with no net increase in costs over the short term and a medium- or long-term net decrease in costs.
The costs of implementing quality initiatives can be a substantial part of revenue. Yet part of the TQM philosophy is that gains in efficiency and effectiveness can also be realized with no net increase in costs and can ultimately create significant cost reductions.
This will allow a manufacturer with limited resources to maximize profits.
Linear programming is a mathematical technique for maximizing or minimizing a given objective subject to certain constraints. It is the correct technique to optimize the problem of limited resources.
What are the four phases in the benchmarking cycle AKA Deming Wheel
Plan - Do/Analyze - Check/Integrate/ - Act/Implement
One factor that would encourage entry into an existing market.
Governmental subsidy for new investors. The subsidies for new players weaken the entrance barriers of the industry, allowing new players to get into the industry and producing a higher rivalry among more competitors.
