Multiple-Choice Questions Flashcards

Question 1

Q

What is Marketing Research?

Answer

A

Marketing Research is the “systemic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization.”

Question 2

Q

How does Marketing Research differ from Competitive or Marketing Intelligence?

Answer

A

Market research deals specifically with your company, marketing strategy, and product line.

Market intelligence is information about the market itself, not your specific positioning necessarily.

Question 3

Q

Marketing intelligence (MI) -

Answer

A

is the everyday information relevant to a company’s markets, gathered and analyzed specifically for the purpose of accurate and confident decision-making in determining market opportunity, market penetration strategy, and market development metrics.

Question 4

Q

Market oriented company -

Answer

A

telling customers what they want

when company’s culture is systematically and entirely committed to the continuous creation of superior customer value (slogans of the firms, ex. I’m loving it Mc)

Question 5

Q

Many salespeople earn a commission, which is a percentage paid on every:

a Sales Call
b Sale
c Profit

Answer

A

Many salespeople earn a commission, which is a percentage paid on every:

b Sale

Question 6

Q

The essence of selling is:

a Complaining
b Teaching.
c Being charming

Answer

A

The essence of selling is:

b Teaching.

Question 7

Q

Which of the following is not a good strategy for becoming an effective salesperson?

a Not focusing on customer complaints; they will just get you down.
b Assuming every person you sell to knows at least 250 other people.
c Making sure you experience a call from one of your competitor’s salespeople.
d Knowing ahead of time how you want to present your product or service.

Answer

A

Which of the following is not a good strategy for becoming an effective salesperson?

a Not focusing on customer complaints; they will just get you down.

Question 8

Q

During each sales call you make, focus on this:

a Is this customer someone who would buy this product?
b How can I make this sale?
c What does the customer need?

Answer

A

During each sales call you make, focus on this:

c What does the customer need?

Question 9

Q

What should you do during a sales call right after briefly telling the customer about your product/service?

a Sit back and listen to the customer’s response, in order to learn what the customer needs.
b Ask questions to keep the customer engaged in the sales call.
c Keep talking so the customer doesn’t lose interest.

Answer

A

What should you do during a sales call right after briefly telling the customer about your product/service?

a Sit back and listen to the customer’s response, in order to learn what the customer needs.

Question 10

Q

How should you deal with a customer’s objections during a sales call?

a Always acknowledge objections and respond to them.
b Take objections as a sign that the customer is not likely to buy from you.
c Ignore objections so the customer will forget about them.

Answer

A

How should you deal with a customer’s objections during a sales call?

a Always acknowledge objections and respond to them.

Question 11

Q

The rule of thumb is that if a customer says “No” this many times, he/she means it:

a four times
b once
c three times

Answer

A

The rule of thumb is that if a customer says “No” this many times, he/she means it:

a four times

Question 12

Q

Successful businesses are built on:

a repeat business.
b huge sales.
v frequent sales.

Answer

A

Successful businesses are built on:

a repeat business.

Question 13

Q

Which of the following is not an example of customer service?

a keeping a customer on hold longer than necessary
b delivering a product on time providing a toll-free
c customer assistance phone line
d suggesting a less expensive product that will meet the customer’s need

Answer

A

Which of the following is not an example of customer service?

a keeping a customer on hold longer than necessary

Question 14

Q

When responding to customer complaints you should do all of these except:

a limit the time for criticism.
b do not take negative comments personally.
c acknowledge and deal with them.

Answer

A

When responding to customer complaints you should do all of these except:

a limit the time for criticism.

Question 15

Q

Which of the following is best described as a market-oriented business definition?

a. Tallinn Railroad: We run a railroad.
b. Xerox: We make copying equipment.
c. Olerex Oil: We sell gasoline.
d. Encyclopedia Britannica: We distribute information.
e. Netflix: We make movies.

Answer

A

Which of the following is best described as a market-oriented business definition?

d. Encyclopedia Britannica: We distribute information.

Question 16

Q

Which of the following involves adapting a firm to take advantage of opportunities in its constantly changing environment?

a Team planning
b Short-term planning
c Media planning
d Strategic planning
e Annual planning

Answer

A

Which of the following involves adapting a firm to take advantage of opportunities in its constantly changing environment?

d Strategic planning

Question 17

Q

_______ is the worth in monetary terms of the economic, technical, service and social benefits a customer receives in exchange for the price it pays for a market offering.

a. Marketing efforts
b. Planning
c. Value
d. Marketing intelligence
e. Product

Answer

A

_______ is the worth in monetary terms of the economic, technical, service and social benefits a customer receives in exchange for the price it pays for a market offering.

c. Value

Question 18

Q

Sales of products in introductory stage are recorded by a company as

a. Low sales
b. Rapidly rising
c. Peak sales
d. Gradually declining
e. None of the above mentioned

Answer

A

Sales of products in introductory stage are recorded by a company as

a. Low sales

Question 19

Q

Marketing ________ is the aggregating of prospective buyers into groups that have common needs and will respond similarly to a marketing action.

a. Segmentation
b. Persuasion
c. Modifying the offer
d. Evaluation
e. Neither of the abov

Answer

A

Marketing ________ is the aggregating of prospective buyers into groups that have common needs and will respond similarly to a marketing action.

a. Segmentation

Question 20

Q

In which case should the project be accepted?

a. when NPV < 0
b. when NPV > 0

Answer

A

In which case should the project be accepted?

a. NPV < 0 : Reject Project
b. NPV > 0 : Accept Project

Question 21

Q

Ranges of Price Elasticity of Demand?

a. |εD| = 0
b. 0 < |εD| < 1
c. |εD| = 1
d. 1 < |εD| < ∞
e. |εD| -> ∞

Answer

A

Ranges of Price Elasticity of Demand?

a. |εD| = 0: Perfectly Inelastic
b. 0 < |εD| < 1: Inelastic
c. |εD| = 1: Unit elastic
d. 1 < |εD| < ∞: Elastic
e. |εD| -> ∞: Perfectly elastic

Question 22

Q

The opportunity cost of a given activity is

a. The value of material used
b. The value of the next best activity
c. The cost of input used
d. None of the above

Answer

A

The opportunity cost of a given activity is

b. The value of the next best activity

Question 23

Q

The competitive firm’s long run supply curve is the portion of it’s ____ curve that lies above average total cost

a. Fixed cost
b. Variable cost
c. Marginal cost
d. All of the above

Answer

A

The competitive firm’s long run supply curve is the portion of it’s ____ curve that lies above average total cost

c. Marginal cost

Question 24

Q

In a perfectly competitive market, individual firm

a. Cannot influence the price of its products
b. Can influence the price of its products
c. Can fix the price of its products
d. Can influence the market force

Answer

A

In a perfectly competitive market, individual firm

a. Cannot influence the price of its products

Question 25

Q

The market with a single producer is called:

a. Perfect competition
b. Monopolistic competition
c. Oligopoly
d. Monopoly

Answer

A

The market with a single producer is called:

d. Monopoly

Question 26

Q

In the case of ______ a small change in price leads to very big change in quantity demanded (think negatively).

a. Perfectly elastic demand
b. Perfectly inelastic demand
c. Elastic demand
d. Unit elastic demand

Answer

A

In the case of ______ a small change in price leads to very big change in quantity demanded.

c. Elastic demand

Question 27

Q

The distinction between variable cost and fixed cost is relevant only in

a. Sales period
b. Short run
c. Long run
d. Fiscal year

Answer

A

The distinction between variable cost and fixed cost is relevant only in

b. Short run

Question 28

Q

The proportionate change in the quantity demanded of a commodity in response to change in the price of another related commodity is called

a. Substitutes elasticity
b. Price elasticity
c. Income elasticity
d. Cross elasticity

Answer

A

The proportionate change in the quantity demanded of a commodity in response to change in the price of another related commodity is called

d. Cross elasticity

Question 29

Q

Product differentiation is the important feature of:

a. Monopoly
b. Perfect competition
c. Monopolistic competition
d. Monopsony

Answer

A

Product differentiation is the important feature of:

c. Monopolistic competition

Question 30

Q

Oligopoly is a type of

a. Perfect, few firms
b. Imperfect, few firms
c. Perfect, many firms
d. Imperfect, many firms

Answer

A

Oligopoly is a type of

b. Imperfect, few firms

Question 31

Q

In the long run all input become

a. Fixed
b. Variable
c. Partially variable
d. Depreciated

Answer

A

In the long run all input become

b. Variable

Question 32

Q

What item is not on the list of basic human capabilities by Martha Nussbaum (1999)?

a) Wealth
b) Emotions
c) Play

Answer

A

What item is not on the list of basic human capabilities by Martha Nussbaum (1999)?

a) Wealth

Question 33

Q

What element is not part of the classical liberal system of division of moral labor?

a) Strict boundaries between business and politics
b) Private sector of society focusing on fairness in distribution of wealth and incomes in a society
c) Public sector of society focusing on protecting the private property rights and freedom of contracts

Answer

A

What element is not part of the Classical Liberal System of Division of Moral Labor?

b) Private sector of society focusing on fairness in the distribution of wealth and incomes in a society

Question 34

Q

What is the major policy solution that classical liberal PCSR would not necessarily suggest when controlling the Big Tech powers?

a) Anti-trust policies
b) Deliberative democratic discussions among Big Tech firms and NGOs needed to create legitimate industry level self-regulation system
c) Defining rights of use of personal information in data capitalism

Answer

A

What is the major policy solution that classical liberal PCSR would not necessarily suggest when controlling the Big Tech powers?

b) Deliberative democratic discussions among Big Tech firms and NGOs needed to create legitimate industry level self-regulation system

Question 35

Q

In total institution according to Goffman (1961, 17) people do not necessarily:

a) Sleep together
b) Eat together
c) Vote together about the rules of the institution

Answer

A

In total institution according to Goffman (1961, 17) people do not necessarily:

c) Vote together about the rules of the institution

Question 36

Q

In “privatized society”

a) Democratic logics cover all aspects of society
b) Boundaries between business and politics are robust
c) There are no real boundaries between business and politics

Answer

A

In “privatized society”

c) There are no real boundaries between business and politics

Question 37

Q

Amazon in US is not yet providing or starting to provide by itself

a) Private Army
b) Private Health Care System
c) Private Communication and Transit Systems

Answer

A

Amazon in US is not yet providing or starting to provide by itself

a) Private Army

Question 38

Q

What are the characteristics of Democratic Market Economy?

Answer

A

Democratic Market Economy aka Classic Liberal System:

Public sector: democratically governed
Private sector: non-democratically governed, i.e. managerially run business firms operating in competitive markets
Structure of Society: boundaries between spheres of society, diversity of operating logics
CSR: economic/instrumental perspective dominant
Deliberative aspects: in the public sector deliberate democratic processes
Political philosophy: liberal democracy

Question 39

Q

Which of the following categories is not used to differentiate operations and processes?

a. Variety
b. Visibility
c. Velocity
d. Volume

Answer

A

Which of the following categories is not used to differentiate operations and processes?

c. Velocity

Question 40

Q

Which of the following levels is not one to measure operations performance?

a. Individual
b. Societal
c. Strategic
d. Operational

Answer

A

Which of the following levels is not one to measure operations performance?

d. Operational

Question 41

Q

Which can’t be measured by Little’s Law?

a. The average time a product spends in the whole system(throughput)
b. The average number of things in the system (Work-in-progress)
c. The average rate at which one product leaves the system (cycle time)
d. The average resource input to the system (resource input)

Answer

A

Which can’t be measured by Little’s Law?

c. The average rate at which one product leaves the system (cycle time)

Question 42

Q

Which of the following is a principle of Business Process Re-Engineering?

a. Have those who use the output of the process drive the process
b. Capture information multiple times at every output
c. Treat geographically dispersed resources as they are, decentralized
d. Put the decision point central and hierarchically at the top

Answer

A

Which of the following is a principle of Business Process Re-Engineering?

d. Put the decision point central and hierarchically at the top

Question 43

Q

Which of the following is a well-known sequencing technique?

a. Shortest operation time (SOT)
b. Last in. last out (LILO)
c. Average operation time (AOT)
d. Free queue selection (FQS)

Answer

A

Which of the following is a well-known sequencing technique?

a. Shortest operation time (SOT)

Question 44

Q

Which one is NOT a key problem when implementing an ERP?

a. The level of outside expertise required is always estimated appropriately.
b. The total cost is likely to be underestimated.
c. There will never be enough training.
d. The time and effort to implement it is likely to be underestimated.

Answer

A

Which one is NOT a key problem when implementing an ERP?

c. There will never be enough training.

Question 45

Q

Which of the following is NOT a key element of improvement

a. Evidence-based problem-solving
b. Customer centricity
c. End-to-End Processes
d. Improving based on Gut Feeling

Answer

A

Which of the following is NOT a key element of improvement

d. Improving based on Gut Feeling (?)

Question 46

Q

According to ISO 9001, which one is a quality management principle

a. Continuous improvement
b. Free-float approach
c. Strong focus on internal expertise
d. Decision making based on gut feeling

Answer

A

According to ISO 9001, which one is a quality management principle

a. Continuous improvement

Question 47

Q

Which of the following steps is not part of operations design?

a. Process design
b. People in organizations
c. Inventory management
d. Process technology

Answer

A

Which of the following steps is not part of operations design?

c. Inventory management

Question 48

Q

Which of the following levels is the highest level of operation analysis?

a. Flow between processes
b. Flow between people
c. Flow between resources
d. Flow between operations

Answer

A

Which of the following levels is the highest level of operation analysis?

d. Flow between operations

Question 49

Q

Which implication indicates a low variety of operations?

a. Complexity
b. Flexibility
c. Standardized
d. High units cost

Answer

A

Which implication indicates a low variety of operations?

c. Standardized

Question 50

Q

Which one is not an objective group of operation performance?

a. Dependability
b. Cost
c. Speed
d. Risk

Answer

A

Which one is not an objective group of operation performance?

d. Risk

Question 51

Q

What could quality mean in relation to operation management?

a. All assembly is to specification
b. Products and services on-time delivery
c. Volume flexibility – the ability to adjust
d. Bought-in materials and services

Answer

A

What could quality mean in relation to operation management?

a. All assembly is to specification

Question 52

Q

Which of the following measures belongs to the strategic level of operations management?

a. Speed
b. Economic (profit)
c. Risk and resilience
d. Flexibility

Answer

A

Which of the following measures belongs to the strategic level of operations management?

c. Risk and resilience

Question 53

Q

The project sponsor…:

a …drives project tasks in the closing phase
b …approves major milestones
c …has to run project marketing activities
d …needs to define the project team

Answer

A

The project sponsor…:

b …approves major milestones

Question 54

Q

What are key duties of the project manager during the “performing” phase (according to Tuckman Model)

a Communication, Risk Management, Coordination
b Structuring, Communication, Delegation, Coordination
c Stakeholder Management, Delegation, Planning, Quality Management
d Structuring, Risk Management, Controlling

Answer

A

What are key duties of the project manager during the “performing” phase (according to Tuckman Model)

b Structuring, Communication, Delegation, Coordination

Question 55

Q

Agile projects…

a …increase the ability to react to changes
b …aim to reduce communication to a minimum
c …are only relevant for IT/ Digitalization topics
d …focus on a lessons learned session at the very end of the project

Answer

A

Agile projects…

a …increase the ability to react to changes

Question 56

Q

The communication plan…

a …ideally considers the single best communication path to stakeholders
b …is based on the team charter
c …needs to cover at least recipient, frequency, medium and content of communication measures
d …is owned by the project sponsor

Answer

A

The communication plan…

c …needs to cover at least recipient, frequency, medium and content of communication measures

Question 57

Q

Project planning requires the following steps and sequence

a Defining the work, specifying duration and effort, determining dependencies and resources, clarifying activity ownership
b Defining the work, determining dependencies and resources, specifying duration and effort, assigning budget positions
c Defining the work, assigning responsibilities, determining dependencies and resources, assigning budget positions
d Defining the work, assigning budget positions, specifying duration and effort, clarifying activity ownership

Answer

A

Project planning requires the following steps and sequence

a Defining the work, specifying duration and effort, determining dependencies and resources, clarifying activity ownership

Question 58

Q

Project risks…

a …need to be avoided as good as possible
b …are owned by the project manager
c …should be evaluated by impact and probability
d …shall we closed after planning stage

Answer

A

Project risks…

c …should be evaluated by impact and probability

Question 59

Q

Definition of a PROJECT?

Answer

A

a UNIQUE endeavor with a clear GOAL that needs to be achieved by INTERRELATED TASKS in a FIXED PERIODS OF TIME with LIMITED COST and RESOURCES and influenced by RISKS

Question 60

Q

Is this a PROJECT? True of False.

My project is running a company to…

Answer

A

False, project is to set up a company, lacking target

Question 61

Q

Is this a PROJECT? True of False.

We improve online education for students

Answer

A

False, too broad

Question 62

Q

Is this a PROJECT? True of False.

Our project is to build a cafe that creates a comfortable environment, provides food and drinks while producing our own culture

Answer

A

False, personal ambition, lacking measurement

Question 63

Q

Is this a PROJECT? True of False.

We want to create an NGO

Answer

A

False, lacking target

Question 64

Q

Is this a PROJECT? True of False.

We will deliver food in time to your place

Answer 64

A

What do I do during the performing phase?

Structuring, Communication, Delegation and Coordination

Answer 65

A

What are the key characteristics of the project?

Goal, interrelated tasks, fixed timeline, limited cost, resources, risks

Answer 66

A

Core phases of the project according to PMI?

Initiating, Planning, Executing & Controlling & Monitoring, Closing

Answer 67

A

Classic (Waterfall) vs Agile?

Agile: iterations, result over documentation, changing reqs, fixed resources and time, flexible scope
Waterfall: fixed scope, flexible time and resources

Answer 68

A

What is a PROGRAM?

a set of projects focusing on the SAME, overarching GOAL

Answer 69

A

What is a PORTFOLIO?

is a set of projects with similar CHARACTERISTICS

Answer 70

A

5 phases of Tucman?

Forming, Storming, Norming, Performing and Transforming

Answer 71

A

Not SMART

Answer 72

A

Not SMART, what product?

Answer 73

A

Somewhat SMART

Answer 74

A

Not SMART, why?

Answer 75

A

Not SMART, the reason for campaign is missing

Answer 76

A

Not SMART, not a target

Answer 77

A

What does SMART stand for?

Specific, Measurable, Attainable, Relevant, Time-bound

Answer 78

A

Which of the following technologies has been in greater demand in the past year?

Natural Language Processing

Answer 79

A

Select one of the following which is NOT a class of ML algorithms?

Population Growth

Answer 80

A

Which one of the following is not included in the framework for blockchain adoption in article ‘The Truth About Blockchain’:

Computational logic

Answer 81

A

Which one of the following is NOT one of the 5 research streams of Smart Cities?

Tourism

Answer 82

A

Select one of the following which is related to decentralised computing

Edge computing

Answer 83

A

Which of the following is not one of the challenges and gaps to reach 5G?

Remote controlling

Answer 84

A

Financial accounting focuses on providing information to internal users

False, external users

Answer 85

A

Preparation of budgets is part of financial accounting

False, managerial accounting

Answer 86

A

Managerial accounting applies only to merchandising and manufacturing companies

False, all companies

Answer 87

A

Both managerial account and financial account deal with many of the same economic events

True

Answer 88

A

Managerial account reports are prepared only quarterly and annually

False, whenever needed

Answer 89

A

Financial account reports are general-purpose reports

True

Answer 90

A

Managerial account reports pertain to subunits of the business

True

Answer 91

A

Managerial account reports must comply with accounting standards

False, any format is used in an org

Answer 92

A

Managerial accountants have a single role within an organization, collecting and reporting costs to management

False, Managerial accountants determine product costs. In addition, managerial accountants are now held responsible for evaluating how well the company is employ- ing its resources. As a result, when the company makes critical strategic decisions, managerial accountants serve as team members alongside personnel from production, marketing, and engineering.

Answer 93

A

Financial accounting reports are general-purpose and intended for external users

True

Answer 94

A

Managers’ activities and responsibilities can be classified into three broad functions: cost accounting, budgeting, and internal control

False, this is financial manager

Answer 95

A

Managerial accounting reports must now comply with generally accepted accounting principles (GAAP)

False, not audited

Answer 96

A

All activities associated with providing a product or performing service is a …

Value Chain

Answer 97

A

A method of allocating overhead based on each product’s use of activities in making the product is a ….

Activity-based costing

Answer 98

A

Systems implemented to reduce defects in finished products with the goal of achieving zero defects is a ….

Total Quality Management (TQM)

Answer 99

A

A performance-measurement approach that uses both financial and nonfinancial measures, tied to company objectives, to evaluate a company’s operations in an integrated fashion is a …

Balanced Scorecard

Answer 100

A

Inventory system in which goods are manufactured or purchased just as they are needed for use is a …

Just-in-Time (JIT) inventory

Answer 101

A

A company’s efforts to employ sustainable business practices with regards to its employees, society, and the environment is a …

Corporate Social Responsibility (SCR)

Answer 102

A

Inventory system in which goods are manufactured or purchased just as they are needed for use is a …

Statement of Ethical Professional Practice

Answer 103

A

Marketing Principles:

Focus on the customer
Only compete in markets where you can establish a
competitive advantage
Customers do not buyproducts
Marketing is too important to leave to the marketing department (even if there still isone)
Markets are heterogeneous
Marketsand customers are constantly changing

Answer 104

A

Competitive Advantage is…

the attribute that allows an organization to outperform its competitors

Answer 105

A

Value = price paid

Value is…
the worth in monetary terms of the economic, technical, service and social
benefits a customer firm receives in
exchange for the price it pays for a market offering.

Answer 106

A

Goal of Advertising is …

Connecting with consumers’ unconscious minds 
TO: Build MEMORY STRUCTURES
BY: Being DISTINCTIVE
This is what...
...BUILDS DISTINCTIVE ASSETS OVER TIME

Answer 107

A

Distinctive Assets are …

distinctive memory structures created by advertising/marketing

Answer 108

A

Value = price paid

Value is…
the worth in monetary terms of the economic, technical, service and social benefits a customer firm receives in exchange for the price it pays for a market offering.

Answer 109

A

Sales is about getting people to exchange their cash for the company’s offering.

While Marketing is about satisfying the needs of customer, by means of a product or a service.

Answer 110

A

Marketing Approaches:

Product Push
Customer-led
Resource-based

Answer 111

A

Business market is

All the organizations that buy goods and services to use in the production of other products and services, and identify, evaluate and choose among alternative brands
and suppliers.It also includes retailing and whole saling firms that acquire goods for the purpose of reselling or renting them to others at a profit

Answer 112

A

B2C:

many customers
smaller value transactions
mass-produced products
fixed price
brief, the retail-focused selling process
multiple factors influence value
individual buying decision-maker
media-stimulated demand
standardized form, service important but less than for business products
emphasis on advertising
product passes a number of intermediate links en route to the consumer
relationship of relatively short duration
individual or a household makes a buying decision

Answer 113

A

B2B:

fewer customers
larger0value transactions
customized products
negotiated price
lengthy, complex selling process
usage determines the value
multiple buying decision-makers
derived demand
emphasis on personal selling
relatively short distribution, direct channels to market
relatively enduring and complex customer relations
relatively technical product, exact form often variable, accompanying services very important

Answer 114

A

Strategic approaches of Marketing:
(top down)

Corporate strategy
Business strategy (translated into Marketing Goals)
Functional strategy (translated into tactics and actions)
Tactical plans & actions (incl Marlketing Mix 4 P’s)

Answer 115

A

4 P’s in Marketing:

Product
Price
Promotion
Place

Answer 116

A

Marketing Segmentation is …

Aggregatingprospectivebuyersinto groups, or segments, that

(1) have common needs and
(2) will respond similarly to a marketing action
(3) articulates who we should not sell to

Answer 117

A

Which of the following statements concerning financial management are correct?

It is concerned with investment decisions, financing decisions and dividend decisions
It is concerned with financial planning and financial control
It considers the management of risk

b) 1, 2 & 3
Financial management concerns the management of cash flow and wealth generation. This encompasses investment, financial and dividend decisions (financial strategy), financial planning and control and risk management. The latter is safeguarding future cash flows and lower risk should result in lower cost of capital, increasing the value of the business for the shareholders.

Answer 118

A

With regard to capital market efficiency, to which form of efficiency does low transaction costs and few barriers to trading apply?

b) Operational efficiency

Answer 119

A

Markets are efficient based on all publicly available information is a test that describes which form of efficiency?

d) Semi-strong

Answer 120

A

Which of the following are thought to be problems with using ratios to report on performance?

Creative accounting
They ask more questions than they answer
Difference in accounting policies
Financial position statement relates to one day only

C. All of them

Answer 121

A

What is a bond?

a) simply long-term loan

Answer 122

A

What is value of bond?

a) present value of all cash flows (NPV)

Answer 123

A

What is yield to maturity?

a) IRR that equates the bond’s discounted cash flows with its price

Answer 124

A

If the bond yield is greater than the coupon, is the price of the bond greater or less than 100?

a) less

Answer 125

A

Which (if any) of these statements are true? Stock values appear to behave as though successive values:

c) Differ by a random number.

Answer 126

A

True or false?

The efficient market hypothesis assumes that:

There are no taxes;

FALSE, there are, but low

Answer 127

A

FALSE, there are, but low

Answer 128

A

TRUE, because info is publicly available and free

Answer 129

A

Rank the following from 1 to 5 where 1 represents the lowest risk and highest cost and 5 represents the highest risk and highest cost

Unsecured creditors - 3
Preference shareholders - 4
Ordinary shareholders - 5
Creditors with floating charge - 2
Creditors with fixed charge - 1

Answer 130

A

What is the assumed objective of financial management?

Maximise shareholder wealth

Answer 131

A

How does the objective of financial management manifest itself?

Dividends and increase in market value

Answer 132

A

To achieve the assumed objective of financial management, Finance manager has to make decisions relating to:

Investment
Financing
Dividends

Answer 133

A

What could be an example of investment decision?

Machinery, vehicles, non-current assets

Answer 134

A

What could be an example of financing decision?

Loans, shares, retained earnings?

Answer 135

A

What could be an example of Interaction with investing/dividends?

Enough return to cover cost? Reduce dividend?

Answer 136

A

What could be an example of dividend decision?

Where does the money come from? Borrowing?

Answer 137

A

What could be an example of Interaction with financing/investing?

Financing needed? Reduce investment?

Answer 138

A

Agency Problem is …

Managers make decisions that are not consistent with the objective of shareholder wealth maximisation

Answer 139

A

Can Agency Theory affect other stakeholder groups?

Yes, can also affect creditors (banks, suppliers, bondholders) and customers

Answer 140

A

Which of the following are likely to be relevant costs for investment appraisal?

Feasibility study cost: NO
Building cost: YES
Depreciation: NO
Net Sales Income: YES
Head Office Costs: NO
Machinery costs: YES
Machinery sale: YES

Answer 141

A

Payback method of investment appraisal. What are the advantages?

Simple to calculate and to understand.
Uses cash flows rather than more easily manipulated accounting profits.
Can be used as a screening device
Being biased in favour of short-term projects means that it tends to minimise both financial and business risk.
Useful when there is capital rationing to identify projects which generate additional cash for investment quickly.

Answer 142

A

Ranges of Income Elasticity and the types of goods associated with them?

a. εy > 0 Superior
b. εy < 0 Inferior

Answer 143

A

Ranges of Cross-price Elasticity and the types of goods associated with them?

a. εcross > 0 Substitutes
b. εcross < 0 Complementary

Formula:
△Qx/△Py * Py/Qx

Answer 144

A

Higher Price - Lower Demand

Higher Price - Lower Quantity

Answer 145

A

Demand Function: a function that describes how much of a good will be purchased at alternative values of the variables that affect demand
aka
This function describes how much of the good X will be purchased at alternative prices of X and related goods, alternative levels of income, and alternative values of other variables that affect demand

FORMULA:
QXD =f(PX,PY,M,H)
Qx = λ0 + λxPx + λyPy + λmM + λhH, where:

Qx - Quantity of the good X

Px - Price of the good X
λx < 0 - when the Price of X increases, the Quantity of X decreases

Py - Price of the good Y
λy > 0 - when the Price of Y increases, the Quantity of X increases (= complements)
λy < 0 - when the Price of Y increases, the Quantity of X decreases (= substitutes)

M - the type of Good
λm > 0 -> normal good
λm < 0 -> inferior good

H - other variables impacting demand

Answer 146

A

What does a NEGATIVE λx mean in the Demand Function?

when the Price of X increases, the Quantity of X decreases

aka elastic demand

Answer 147

A

What does a POSITIVE λy mean in the Demand Function?

a. POSITIVE: λy > 0 - when the Price of Y increases, the Quantity of X increases (= complements)
b. NEGATIVE: λy < 0 - when the Price of Y increases, the Quantity of X decreases (= substitutes)

Answer 148

A

What does a POSITIVE and NEGATIVE λm mean in the Demand Function?

a. λm > 0 -> normal good
b. λm < 0 -> inferior good

Answer 149

A

What happens to Normal Good when there is a Recession?

Decrease in Demand

Answer 150

A

What happens to Inferior Good when there is a Recession?

Increase in Demand

Answer 151

A

how the Demand changes when one of the variables from the Demand Function changes. It is a percental change: % of Demand changes up/down when 1% of one variable changes.

The more precise the demand is, the more inelastic it becomes. Ex. cigarettes and potato chips are very inelastic because the customer has a specific preference.

Answer 152

A

Which part of the graph of the Demand is Elastic and which is Inelastic?

If Demand is a linear function going from the top of the Price ax, all the way to the righthand side of the Quantity, then:

the top part of the Demand line is > 1, therefor it is ELASTIC
the bottom part of the Demand line is < 1, therefore it is INELASTIC

Answer 153

A

Which Demand graph is more inelastic - the more horizontal or the more vertical Demand function?

The more vertical the Demand line on the graph is, the more Inelastic the demand is.

Ex. medicine is normally inelastic (vertical Deman function) because regardless of the price, I will consume it anyway.

Answer 154

A

How does the Quality bought changes with Price?

Consumer is willing to buy more for a lower price, and pay more for lower quantities. Ex. buying in bulk for cheap.

Answer 155

A

How does Revenue change with Price increase in case of a very Elastic demand?

With the Price increase, the Quantity consumed decreases, and because R=PxQ, the Revenue will likely shrink significantly. Need to be careful with pricing in case of elastic demand.

Answer 156

A

How does Revenue change with Price increase in case of a very Inelastic demand?

Revenue is likely to increase in case of inelastic demand when the Price increases.

Answer 157

A

In which case, elastic or inelastic demand, it makes sense to increase Price for goods?

Elastic demand - decrease Price
Inelastic demand - increase Price

Answer 158

A

Is gasoline elastic or inelastic in:

a. short-run: inelastic
b. long-run: more elastic (will likely change the car)

Answer 159

A

Which goods are more elastic?

a. those that take bigger chunk of the income

Answer 160

A

The change in Demand when the income changes by 1%.

Answer 161

A

The change in Demand when the Price of the 2nd good changes by 1%.

Answer 162

A

In which case, elastic or inelastic demand, it makes sense to increase Price for goods?

Elastic demand - decrease Price
Inelastic demand - increase Price

Answer 163

A

In Economics we care about…?

a. efficiency (consumer surplus -> satisfied customer)

Answer 164

A

Shows how output changes depending on input.

Production Function
Q = F(K,L), where:

(K,L) are Inputs = Factors of Production (L labor + K capital)
Q is Output = Ready-made Good

Answer 165

A

Produce the maximum feasible Quantity given the amount of Inputs.

Answer 166

A

The most famous Production Function?

Cobb-Douglas production function:
Q = λLβ1*Kβ2, where:
β1 and β2 - tell how much of input is being put into the production function

Answer 167

A

Is Capital (K) or Labor (L) is higher in the Production Function in Developing (3rd word) countries?

Labor (L) because it is cheaper in Developing countries

Answer 168

A

Q = min {bK,cL}
this fucntion assumes that inputs are used in fixed proportions.

Ex. Q=min{3K,4L}
labor 2 units
capital 5 units
3 x 5 = 15
4 x 2 = 8
Q is min of the two, so 8.

Answer 169

A

Short-Run in Economics is…
the period of time in which one (or more) of the resources employed in a production process is fixed or incapable of being varied.

When at least one of the inputs is FIXED, it is SHORT-RUN.

Answer 170

A

Long-run is..
the period of time in which all the resources employed in a production process can be varied.

Once there are no longer any fixed inputs, it is a LONG-RUN.

Answer 171

A

Inputs in production that does not change regardless of the quantities produced. Ex. it always requires 1h of oven time when producing cookies.

Answer 172

A

Inputs that change depending on the output produced. Ex. sugar when making cookies.

Answer 173

A

Marginal Product…

It is the change in total output attributable to the last unit of input.

In other words, how the quantity produced changes if labor or capital is increased by 1.

Answer 174

A

Total Product …

The maximum level of output that can be produced with a given amount of inputs.

Answer 175

A

Average Product…

a measure of the output produced per unit of input.

Answer 176

A

Marginal analysis is an examination of the additional benefits of an activity compared to the additional costs incurred by that same activity. Companies use marginal analysis as a decision-making tool to help them maximize their potential profits.

Answer 177

A

When Marginal Productivity of Labor = 0

Answer 178

A

role of the manager in respect to production:

maximize production (by controlling the inputs)
minimize cost (by controlling the inputs)

Answer 179

A

At the point when wage is equal to the output s/he produces is the breaking point.

Ex. 1 cookie produced in an hour that costs 2EUR, the wage per h is 2 EUR.
W == Marginal Product of Labor (MPL)

Answer 180

A

Nominal Salary - the actual salary a person gets

Real Salary - what you can get with that money; i.e. translated into goods and services

Answer 181

A

Isoquant is a representation of the production function. Shows the output (Q) depending on the inputs (K and L).

Answer 182

A

Isocost line is..

a line that represents the combinations of inputs that will cost the producer the same amount of money.

Answer 183

A

Opportunity Cost is

the value of a resource in its next-best alternative

= lost revenue when this business direction is not taken, something else was chosen instead. Relevant cost.

Answer 184

A

Accounting profit the net income for a company

Accounting Profit = Total Revenue - Explicit Costs

Answer 185

A

An economic profit or loss is the difference between the revenue received from the sale of an output and the costs of all inputs used, as well as any opportunity costs. In calculating economic profit, opportunity costs and explicit costs are deducted from revenues earned.

Economic Profit = Total Revenues - Explicit Costs - Implicit Costs
Ex. Economic Cost = Total Accounting Costs + Total Opportunity Costs

Positive earnings do not guarantee increasing shareholders welth.

Answer 186

A

The costs of inputs to the production process that are constant over the short-run.
- cost that won’t change regardless of which opportunity was perceived, ex. rent. Normally does not change (irrelevant cost), if not specified otherwise.

Cost Function: TC = FC + VC

Answer 187

A

The costs of the variable inputs to the production process

TC = FC + VC

Answer 188

A

Sunk Cost…

is a cost that has already been incurred and cannot be recovered. Past cost that cannot be returned

Answer 189

A

Organizational behavior…

… can be defined as the understanding, prediction, and management of human behavior in organizations

or

… is the study of human behavior in organizational settings, the interface between human behavior and organization and the organization itself

Answer 190

A

Based on a conceptual model for the study of organizational behavior, what is not belonging into the list below as dynamics of organizational behavior?

c) leadership process

Answer 191

A

Managing & Leading for High Performance includes as per the Conceptual Model of Org Behavior:

Behavioral Management
Leadership Processes
Great Leaders

Answer 192

A

Social Cognitive Theory includes as per the Conceptual Model of Org Behavior:

Environmental Context: Globalisation, Diversity, Ethics
Organizational Context: Design & Culture, Reward System
Cognitive Processes: Personality, Perception, Attitudes, Motivational Processes & Application, Positive Org Behavior & Psychological Capital

Answer 193

A

What makes managers and organizations effective?

Enhancing performance behavior
Enhancing commitment and engagement
Promoting citizenship behavior
Minimizing dysfunctional behavior

Answer 194

A

Employees - ..

… an organization’s competitive advantage

Answer 195

A

Human Resource Management - …

… the set of organizational activities directed at attracting, developing, and maintaining an effective
workforce

Answer 196

A

Cultural Competence - …

… the ability to interact effectively with people of different cultures.

Components:

Awareness of our own cultural worldview, and of our reactions to people who are different
Our attitude toward cultural differences
Knowledge of different worldviews and cultural practices
Cross-cultural skills

Answer 197

A

Diversity - …

… the variety of observable and unobservable similarities and differences among people

Answer 198

A

reasons for increasing diversity:

Competitive pressures
recognition and desire for diverse viewpoints
changing workforce demographics (age, gender, ethnicity, and education)
legislations and lawsuits
rapidly growing increase in international business (aka globalisation)

Answer 199

A

5 types of diversity:

Surface level diversity: observable differences in people, including gender, race, age, ethnicity, and physical abilities
Deep level diversity: individual differences that cannot be seen directly, including goals, values, personalities, decision making styles, knowledge, and attitudes
Separation: differences in position or opinion among group members reflecting disagreement or opposition, especially with regard to group goals or processes
Variety: differences in a certain type or category, including group members’ expertise, knowledge, or functional background
Disparity: differences in the concentration of valuable social assets or resources – including dissimilarity in rank, pay, decision making authority or status

Answer 200

A

diversity benefits for orgs:

Diverse teams has increased performance
Diversity contributes to company’s competitive advantage
Culturally diverse teams make better decision over time than homogeneous teams
Diverse groups can develop a more comprehensive view of a problem and a broader list of possible solutions
More women in top management affects the performance of companies pursuing an innovation strategy
Law and regulations

Answer 201

A

Managing diversity through:

Learning
Empathy
Testing
Training
Mentoring

Answer 202

A

What determines ethical behavior?

Cultural influences: Family, friends, education, religion, media
Organizational influences: Ethical codes, role models, policies, practices, reward and punishment systems
External forces: Political, legal, economic, and international developments

Answer 203

A

Quick-test that helps ethical decision making costs of the following questions:

Is the action legal?
Is it right?
Who will be affected?
Does it fit the company’s values?
How would I feel afterwards?
How would it look in the newspaper?
Will it reflect poorly on the company?

Answer 204

A

How organizations prevent unethical behavior?

Code of conduct
Ethical guidelines
Ethics programs
Ethical culture
Ethics officer position
CSR

Answer 205

A

Corporate Governance - …

… Board of directors acting in the best interests of shareholders and other stakeholders.

Answer 206

A

Learning Organization - …

… is characterized by human-oriented cultural values, ie:

everyone can be a source of useful ideas;
the people closest to the problem usually have the best ideas regarding how to solve it (empowerment should be promoted throughout the structure);
learning flows up and down, so managers as well as employees can benefit from it;
new ideas are important and should be encouraged and rewarded;
mistakes should be viewed as learning opportunities;
learning from failures is an especially important cultural value for people in the learning organization.

Answer 207

A

Types of organizational structures:

Functional structure
Divisional structure
Matrix structure
Team-based structure
Network organization

Answer 208

A

Horizontal Org…

revolves around the process, not the task, where:
• The hierarchy is flattened;
• Teams are used to manage everything;
• Customers drive performance;
• Team performance is rewarded;
• Supplier and customer contact is maximized;
• All employees need to be fully informed and trained

Answer 209

A

Guidelines for Change of Culture in an Org:

Assess the current culture
Set realistic goals that impact the bottom line
Recruit outside personnel with industry experience
Make changes from the top down
Include employees in the cultural change process
Take out all trapping that remind personnel of the previous culture • Expect to have some problem, find ambassadors
Move quickly and decisively to build momentum • Be persistent

Answer 210

A

Rewards:

Compensation
Promotion
Recognition

Answer 211

A

Levels of human mental programming:

human nature (inherited)
culture (learned)
personality (inherited & learned)

Answer 212

A

self-esteem - …

… Self perceived competencies and self-image

Answer 213

A

The Social Cognitive Theory is composed of:

self-observation,
self-evaluation,
self-regulation
self-efficacy

Answer 214

A

self-observation

… The cognitive process of a person observing and monitoring themselves as
they work towards their goal

Answer 215

A

self-evaluation -

…The process of a person cognitively comparing their performance needed to achieve their goal

Answer 216

A

self-regulation - …

… Ability to manage your energy states, emotions, behaviors and attentions

Answer 217

A

self-efficacy - …

…. An individual’s belief in his/her capacity to execute behaviors necessary to produce specific performance attainments

Answer 218

A

Personality type refers to different types of individuals. Introverts and extraverts are two fundamentally different categories of people. Also, ambivert.

Personality traits (aka attitutes) refers to behavioral tendencies. Introversion and extraversion are part of a continuous dimension, with many people in the middle.

Answer 219

A

The value of team-role theory…

… it enables individuals or teams to benefit from self-knowledge and the power to adjust to demands placed upon them.

Answer 220

A

Halo effect -

… Judging person total personality based on one trait

Answer 221

A

job dimensions that affect job satisfaction:

The work itself;
Pay;
Promotion opportunities;
Supervision;
Coworkers

Answer 222

A

Outcomes of Job Satisfaction:

Satistfaction & performance
Satisfaction & turnover
Satisfaction & absenteeism
Satisfaction & better health

Answer 223

A

How to enhance job satisfaction?

Make jobs more fun;
Have fair pay, benefits; and promotion oportunities;
Match people with jobs that fit their interests and skills;
Design jobs to make them excisting and satisfying.

Answer 224

A

Three-component model (Meyer and Allen) of Organizational Committment?

Affective commitment – employees’ emotional attachment to; identification with; and involment in the organization.
Continuance commitment – the costs that an employee associates with leving the organization;
Normative commitment – employees’ feelings of obligation to stay (it’s the right thing to do)

Answer 225

A

How to enhance organizational commitment?

Commit to people-first values;
Clarify and communicate your mission;
Guarantee organizational justice;
Create a sense of community;
Support employee development.

Answer 226

A

A group is a collection of individuals who coordinate their individual efforts.

On the other hand, at team is a group of people who share a common team purpose and a number of challenging goals.

Answer 227

A

Five step process for setting team goals

Goal-setting process
Choose the goal setting framework (ex SMART)
Make goals visible
Plan regular check-ins
Adjust the goals as needed

Answer 228

A

WWWW (or 4W’s) framework delegation of tasks :

What: …tasks need to be completed or are delayed?
When: …is the deadline?
Who: …is the best fit for the task?
Why: …the work is important to your team?

Answer 229

A

Employee Satisfaction Index (ESI) measures…

… to what extent are employees happy on their job

Answer 230

A

Employee Engagement Level (EEL) measures…

… to what extent are employees ready to devote themselves to the mission and the vision of the company

Answer 231

A

Employee Advocacy score (EAS) measures…

… Would you recommend this company as an employer to a friend

Answer 232

A

Observing team-member performance consists of:

Attendance
Helpfullness
Efficiency
Initiative
Quality

Answer 233

A

SBI - framework:

Situation
Behavior
Impact

Answer 234

A

Self-managed teams - …

… a group of employees who are responsible for managing and performing technical tasks that result in a product or service being delivered to an internal or external customer

Answer 235

A

Best practices managing teams:

Creating a learning culture within your team
Manager as entrepreneur
Manager as a coach, mentor or/and sponsor

Answer 236

A

Different theoretical views for job motivation:

Scientific management - Assumption that employees are motivated by money
Human relations approach: employees’ inclusion in decision making will result in positive employee attitudes and motivation to work hard
Human resource approach: Assumes that people want to contribute and management task is to encourage participation and to create an environment that makes full use of human resource available

Answer 237

A

Two-factor (dual-structure) theory - …

… consist of:

Motivation factors: Achievement, recognition, the work itself, responsibility, growth
Hygiene factors: Supervision, working conditions, interpersonal relationships, pay and job security, company policies

Answer 238

A

Acquired Needs Framework (McClelland) consists of:

Needs for achievement,
affiliation
power.

Answer 239

A

Existence, relatedness and growth (ERG) theory:

Existence – necessary for basic human survival (basic and security needs in Maslow’s theory)
Relatedness – involving the need to relate (Maslow social and esteem needs)
Growth – analogous to Maslow’s self-esteem and self-actualization

Answer 240

A

Equity Theory -

… people desire to be treated fairly. Comparison of Self with Other.

Answer 241

A

Expectancy Theory - …

… People are motivated by how much they want something and the likelihood they perceive of getting it

Answer 242

A

New paradigm of satisfaction?

Autonomy-the desire to direct our own lives;
Mastery-the urge to get better and better at something that matters;
Purpose-the yearning to do what we do in the service of something larger than ourselves.

Answer 243

A

What are the types of job design?

Job rotation
Job enlargement
Job enrichment

Answer 244

A

What does the basic motivation process consist of?

Needs -> Drives -> Incentives

Answer 245

A

Monetary: involve direct money to the employees; normally given to employees who are extremely performing. Can work as a negative force.

Non-monetary: do not involve direct money to the employees, but cost company money; normally given to all the employees of a certain level. Always works as a positive force.

Answer 246

A

Wellbeing Theory (PERMA model):

Positive emotions: emotional intelligence (Goleman);
Engagement: Flow theory (Csikszentmihalyi)
Positive Relationships: Social capital (Baker / Dutton)
Meaning: PURE model (Wong); Values
Accomplishment: Goal setting theory; Hope theory (Snyder); Growth mindset (Dweck); Self Determination Theory (Ryan)

Answer 247

A

6-step Communication Model consists of:

Set Objectives
Know your audience
Develop a message
Choose medium
Communicate
Measure results

Answer 248

A

Type A (60% managers):

fast
multitasking
competitive

Type B:

not concerned about time
mild-mannered

Answer 249

A

Employee Stress consists of:

Personal stress
Org stress

Answer 250

A

conflict management techniques:

Collaboration
Compromise
Competition
Accommodation
Avoidance

Answer 251

A

5 types of Power:

Charismatic power (personal power) – based on personal attractivity and characteristics.
Position-based power (legitimate, position power) – aligned both with reward and coercive power.
Expert power (expert power) - related knowledge; expertise and experience.
Fee-based power (reward power) - the ability to control and organize certain activities (to recognize, increase wages).
Penalty-based power (coercive power) – based on fear. The ability to intimidate others, punish them

Answer 252

A

Classic law of effect - …

… of several responses made to the same situation, those which are followed by satisfaction (reinforcement) will be more likely to recur; those which are followed by discomfort (punishment) will be less likely to occur

Answer 253

A

Extinction principle of law - ..

.. If the behavior is followed by no consequence, the behavior will extinguish over time.

Answer 254

A

The rule of thumb -

… Regardless of employee’s infraction, managers must strive to maintain a positive working relationship by remaining open to dialogue and ensuring that the worker understands why he’s being reprimanded

Answer 255

A

Stages of Behavioral Performance Management:

Identify
Measure
Analyze
Intervene
Evaluate

Answer 256

A

What is the difference between Transactional and Transformational leadership?

Transactional leadership helps organizations achieve their current objectives more efficiently, such as by linking job performance to valued rewards and ensuring that employees have the resources needed to get the job done. Is considered by some writers as “managing” or “doing things right” because leaders concentrate on improving employee performance and well-being.

In contrast, transformational leadership is about “leading”—changing the organization’s strategies and culture so that they have a better fit with the surrounding environment. Transformational leaders are change agents who energize and direct employees to a new set of corporate values and behaviors.

Answer 257

A

substitutes for Leadership in an org:

co-workers stepping into leadership
self-leadership

Answer 258

A

leadership styles:

The AUTHORITATIVE (Visionary) leader sets the vision for the team;
The AFFILIATIVE leader takes time helping the team to bond;
The PARTICIPATIVE (Democratic) leader starts by asking all the team members what they would like to do, then voting on the options;
The PACESETTING leader sets a cracking pace from the beginning. The team operates with high energy, engagement, and motivation;
The COACHING leader focuses on the learning experience.

Answer 259

A

What should you do right after criticizing or praising someone’s actions or behavior?

d) Explain the broad effects of that behavior.

Answer 260

A

How can you gain influence over members of a cross-functional team who are not under your direct supervision?

d) by communicating with their supervisor regarding their performance

Answer 261

A

Why should a manager spend time organizing venues for casual or informal contact among virtual team members?

b) to improve overall communication within the team

Answer 262

A

What is the most critical stage (team members positioning themselves and it’s the most common stage where crisis can arise) in the team-development cycle?

b) storming

Answer 263

A

Based on a conceptual model for the study of organizational behavior, what is not belonging into the list below as dynamics of organizational behavior?

c) leadership process

Answer 264

A

Which action should you take after overcoming a setback?

a) review the process to determine key positive and negative features

Answer 265

A

Economy of Scale - …

… a proportionate saving in costs gained by an increased level of production

Answer 266

A

characteristics of an attractive industry according to Porter’s 5 Forces:

High barriers to entry (low threats from new entrants)
Suppliers and buyers with weak bargaining power
Low threats from substitute products
Low rivalry among competitors

Answer 267

A

Porter’s 5 Forces:

Threat of new entrants (ex barriers: high capital cost, brand loyalty, distribution channels, product differentiation)
Industry Rivals
Threat of Substitutes (ex. generic vs branded good); the more brand loyalty - the less threat
Bargaining power of Consumers
Bargaining power of Suppliers

2 factors are critical to keeping in mind:

1) Apply the underlying mechanisms of each force (ex. slow industry growth leads to an increased level of competition)
2) Have a dynamic perspective by understanding that each force is evolving (ex. traditional suppliers have become competitors, like in the case of Hulu).

Answer 268

A

VRIN(O):

Valuable - source of great value
Rare - resources or capabilities are not possessed by many competitors
Inimitable (aka unique) - difficult to imitate
Non-Substitutable - no strategically equivalent valuable resource or capabilities

Answer 269

A

3 pillars of Competitive Strategy:

RESOURCE-based capabilities
Business PROCESSES
Adaptive INNOVATION

Answer 270

A

RESOURCE-based capabilities - …

… secure access to key resources (like patents or distribution channels) that cannot be replicated easily by competitors

Ex. Amazon: books -> other goods

Answer 271

A

Business PROCESSES - …

… competitive strategy analyzes business processes that are difficult to initiate and capable of creating unique value for the target customers

Ex. Dell vs Kompact

Answer 272

A

Adaptive INNOVATION - …

… competitive strategy provides a road map for sustaining a firm’s profitability, principally through innovation

Ex. Polaroid: instant cameras -> digital cameras

Answer 273

A

Types of Strategies:

Product Differentiation
Cost-based = cheapest (most popular)
IT

Answer 274

A

Product Differentiation - …

… a business strategy that relies upon differences in products or processes affecting perceived customer value

Ex. Coca-Cola, Gillette

Answer 275

A

Cost-based - …

… business strategy that relies upon low-cost operations, marketing, or distribution

Ex. Lidl with its boxes

Answer 276

A

Informational Technology Strategy - …

… a business strategy that relies on IT capabilities (smth that the firm already has)

Ex. Insurance Car Companies based on GPS

Answer 277

A

Relevant Market - …

… a group of firms belonging to the same strategic group of competitors (based on 3 main business strategies)

Answer 278

A

Concentrated Market - …

… a relevant market with a majority of total sales occurring in the largest 4 firms

Answer 279

A

Fragmented Market -

… a relevant market whose market shares are uniformly SMALL; no one company that can exert enough influence to move the industry in a particular direction

Answer 280

A

Consolidated Market - …

… a relevant market whose number of firms has declined through acquisitions, mergers, and buyouts

Answer 281

A

incumbent -

… is the current holder of a position

Answer 282

A

Sustainable Profitability focuses on…

non-price rather than price competition

Answer 283

A

the Myth of the Market Share :

the key to profitability is to design a strategy that reduces the THREAT OF SUBSTITUTES, the POWER of BUYERS and SUPPLIERS, and the THREAT of ENTRY

Discounting prices won’t work in long-term.

Answer 284

A

Causes of Perfect Competition:
(don’t care about the brand)

very large of relatively small firms
standardized products
very easy entry and exit
non-price competition: impossible
no collusion (illegal) among firms
price takers; firm decides how much Q to produce
cross-price elasticity higher than in Monopolistic Comp; perfect susbstitutes

Ex. Foreign exchange markets, Internet related industries, etc

Answer 285

A

Causes of Monopolistic Competition:
(certain degree of market power due to product differentiation)

large number of relatively small firms
differentiated products
easy entry and exit
non-price competition: possible
cross-price elasticity lower than in Perfect Comp; substitutes, but not perfect

Ex. Restaurants, Hairdressers, Clothing, TV programmes

Answer 286

A

Causes of Oligopoly/Duopoly:

small number of relatively large firms
both standardized and differentiated products
difficult entry and exit
non-price competition: possible/difficult

Ex.
Oligopoly: Smartphones, high-tech TVs, auto industry, cable television, and commercial air travel

Duopoly: Visa and Mastercard, Coca-Cola & Pepsi

Answer 287

A

Causes of Monopoly:
(firm’s demand = industry’s demand)

barriers to entry and exit (ex. high capital cost, economies of scale, brand loyalty, distribution channels, product differentiation)
one big company
unique product
non-price competition: not necessary
price setter (maker), but has logic

Ex. Microsoft and Windows, DeBeers and diamonds

Answer 288

A

Collusion is a deceitful agreement or secret cooperation between two or more parties to limit open competition by deceiving, misleading or defrauding others of their legal right

Answer 289

A

Price Takers -

… are companies that have no power over price, and set prices based on what market dictates

Answer 290

A

Normal Profit -

Normal profit is a situation where a firm makes sufficient revenue to cover its total costs and remain competitive in an industry; with exclusion for one-time gains and losses

Answer 291

A

Which one - Accounting Profit or Economic Profit indicate that the firm made money?

Accounting Profit is positive means the firm made money

!!!Having a negative Economic Profit (or zero) does not eliminate the possibility to having a positive Accounting Profit.

Answer 292

A

Marginal Revenue -

… is the price from selling the additional unit

Ex. notebook costs 8, the additional notebook’s MR will be 8

Answer 293

A

In the case of Perfect Competition, Industry’s demand is all individual firms demands together

In the case of Monopoly, they are equal

Answer 294

A

What, P or Q, can the firm manipulate in order to adjust Profit?

Q. Even in the case of Monopoly, which is a Price maker, the P cannot be manipulated endlessly, but the quantity can.

Answer 295

A

Which Monopoly has more power - the one with very elastic or the one with very inelastic demand?

Monopoly with inelastic demand is more powerful.

Both Demand and Marginal Revenue are more vertical. In case of elastic demand, the D and MR are more horizontal.

Answer 296

A

What is the difference between Profit Margin and Profit Markup?

They both are profits on goods, but Markup is higher in relation to Marginal Cost than Margin.

The bigger is elasticity, the bigger is Markup. Ex. beers at stadiums.

Answer 297

A

Deadweight Loss -

.. is the inefficiency of the Monopoly. It consists of a part of what supposed to belong to Customer Surplus and Producer Surplus but was left put due to Monopoly being able to ask for a higher price and produce less.

Answer 298

A

What is the proportion between Methodology, Experience and Intuition in Project management?

methodology (20%)
experience (50%)
intuition (30%)

Answer 299

A

a UNIQUE endeavor with a clear GOAL that needs to be achieved by INTERRELATED TASKS in a FIXED PERIODS OF TIME with LIMITED COST and RESOURCES and influenced by RISKS

Answer 300

A

is a set of projects with similar characteristics

Answer 301

A

a set of projects focusing on the SAME, overarching GOAL

Answer 302

A

Project has a clear goal, product is evolving in an agile way

Answer 303

A

responsibilities of a Project Manager:

integrates the team in order to succeed;
solves issues that limit teams’ capabilities;
balances PM’s triangle (time, quality/scope, budget/resources);
responsible for success

Answer 304

A

PM’s Triangle consists of

time,
quality/scope,
budget/resources

Answer 305

A

Responsibilities of a Sponsor:

approves milestones,
holds the budget,
is the primary escalation at client side,
takes decisions when PM is not enough

Answer 306

A

Team- …

a pool of people grouped to solve a problem or to reach a common target by INTERDISCIPLINARY COLLABORATION; min 2 members, max ideally 5; with a team identity (different from the identity of individuals)

Answer 307

A

5 phases of team development:

forming
storming
norming
performing
transforming

Answer 308

A

Forming:

gather impressions
acting independently
observe
no conflicts
get to know one another

Answer 309

A

Storming:

sharing opinions
expressing disagreement
challenging
emphasizing differences
focusing on not losing motivation

find topics that are agnostic, ex weather

Answer 310

A

Norming:

moving toward one goal
giving up individual positions, agreeing with others
sharing controversial ideas as long as they are in line with the goal

Answer 311

A

Performing:

functions as one
handling decision-making process
reacting to changes
returning to previous phases when required
remain motivated

Answer 312

A

Transforming:

completing tasks
delivering results
recap experiences and LL (lessons learned)
breaking up the team

Answer 313

A

Leader:

coaches
goodwill
enthusiasm
“we””
fixes the breakdown
shows by example
develops people
gives credit
asks
“let’s go”

Switching to boss may be required in critical situations

Answer 314

A

How to ensure that team reaches the performing phase?

know the phases, actively observe
accept that you need to pass the first 3 phases
inform the team wisely - information is key for delegation and motivation
ensure that team is involved early in, and include them in the marketing activities
be ready for change

Answer 315

A

What do I do during the performing phase?

Structuring, Communication, Delegation and Coordination

split projects into logical tasks (WBS Work Breakdown Structure)
facilitate progress and interaction/comms
explain decisions to the team and who are affected by the decision
delegate tasks
help the team to feel responsibility
coordinate the project in every dimension (according to project charter)

Answer 316

A

Mutually Exclusive Collectively Exhaustive - no overlaps and no left-outs; all categories are of similar size

Answer 317

A

What does the communication by the Project Management look like?

structure and clear guidelines
always between sender and receiver, two-way
every stakeholder requires individual considerations for comms
establish several ways of communication for one target group

Answer 318

A

Feedback - …

form of comms during the project; comments, activities, statements, judgement, assessment, influence; focuses on improvement and allows for structured reflection

Answer 319

A

Delegation:

honor expert support
agree on how to deal with delegated activities
forget the line org hierarchy
everyone is welcomed to contribute
hand over not only the task, but also responsibility
clarity on the target, and freedom

Answer 320

A

How are Project Coordination and PM’s Triangle related?

Project Coordination = keeping the triangle in balance

Answer 321

A

Coordination of the project in every dimension is done through…

… Project Charter

Answer 322

A

Project Management Lifecycle phases:

Initiating
Planning
Executing & Monitoring & Controlling
Closing

Answer 323

A

Project’s Initiating phase consists of:

define scope
define financial resources
identify stakeholders
setup project team
agree on targets and milestones
obtain authorization

Answer 324

A

Project’s Planning phase consists of:

define requirements
determine budget
develop schedule & project plan
prepare quality management
prepare risk management

Answer 325

A

Project’s Executing, Controlling & Monitoring phase consists of:

execute projects
manage team & stakeholders
control scope, schedule, budget, and quality
report performance
develop deliverables

Answer 326

A

Project’s Closing phase consists of:

submit deliverables
request approval
discuss lessons learned
document results

Answer 327

A

Deliverables at each lifecycle phase:

Initiating: Project Charter
Planning: Project Management Plan
Executing & Controlling: Work results & updated plans
Closing: Approved deliverables & documented results

Answer 328

A

10 elements of the Project Charter:

Description & Targets
Scope & non-scope
Stakeholder Map
Team structure & Resource Requirements (skills, snr)
Communication Plan
Milestones & High-lvl Timeline
Budget (Capex, Opex)
Key Risks & Mitigation Strategy
Quality & Performance metricx - DoD
High-lvl work breakdown structure (tasks)

Answer 329

A

Does an Agile Project require a Project Charter?

Yes, the same project charter is needed, but does not have to describe the entire project at once.

Target still needs to be very clear.

Charter being updated after every sprint.

Answer 330

A

Agile Principles:

focus on satisfaction and collaboration of the client
ability to react to changes
first execution/realization, then documentation
strong focus on daily communicatin
environment needs to support productivity
complexity is broken down
focus on lessons learnt
Scrum Master - for the process

Answer 331

A

Waterfall:
- building a house
- running a wedding celebration
Typically smth you know well.

Agile:
- developing a mobile app
Typically smth you know little about.

In the middle:

shooting a short movie (ex. ad)
rucksack (waterfall + agile)

Answer 332

A

Tranditional(Waterfall):

fixed scope
flexible effort, time

Agile:

fixed effort, time
flexible scope

Answer 333

A

Challenges of Agile and Waterfall:

Agile:

uncertainty about final result
expectation for delivering quick-wins
risk of managing a fixed budget
overhead effort
keeping the final target in focus is hard

Waterfall:

longer planning
longer period until anything is delivered
difficulty to adapt to new insights
requirement for stable environment and team

Answer 334

A

Project Charter -

… a starting point for the entire project, is a key doc for authorizing the project (signoff by the sponsor), outlines main aspects, facilitaets orientation for the team and stakeholders, used for Project Plan

However:

most things will change throughout the project
reduces the risk of forgetting and, as a result, risk of failure
main elements to be kept visible to keep on the target
contract with the sponsor

Answer 335

A

10 Project elements: 1) Project description & targets:

key elements for sponsor and other stakeholders
use SMART rule for targets
define non-targets

Answer 336

A

10 Project elements: 2) Scope and non-scope:

scope includes: assumptions, constraints, acceptance criteria, etc
describe what will be done, and what will NOT be done in scope of the project

Answer 337

A

10 Project elements: 3) Reqs:

specify stakeholders’ needs:
- ex results
- ex resources
- ex timing
- ex quality

Answer 338

A

10 Project elements: 4) Milestones and time constraints:

key time elements defined before the project execution starts
milestones are fixed points, have no duration; activities != milestones
milestones usually have deliverables
time constraints cannot be changes (ex. regulations)
milestones are closely connected to project targets (last milestone = project target)

Answer 339

A

10 Project elements: 5) Budget & Financial data:

pre-defined negotiated, and agreed
the nr 1 limiting factor
used in business case = Return-of-Investment
types of financial key data (opex/capex)

Answer 340

A

10 Project elements: 5) Budget & Financial data:

pre-defined negotiated, and agreed
the nr 1 limiting factor
used in business case = Return-of-Investment
types of financial key data (opex/capex)
broken down by activities and resources

Answer 341

A

10 Project elements: 6) Risks:

no project without risks
evaluated by probability and impact
ways to deal with risks: acceptance, avoidance, transfer, mitigation
risks need to be monitored
Risk Management Plan shared with sponsor

Answer 342

A

10 Project elements: 7) Stakeholder Map:

individual or a group
interest could be positive or negative
map illustrates all stakeholders, their attitude toward the project, interests, special reqs, etc

Answer 343

A

10 Project elements: 8) Team structure and resource reqs:

define skillsets
dependent on individual strengths and weaknesses
team rules
not set in stone, should be thought through in case of risks

Answer 344

A

10 Project elements: 9) Comms Plan (aka Governance Chart):

every stakeholder requires individual consideration for comms
defines recipient, medium, frequency and content of comms
meetings/decision boards
several ways for one target groups (ex. daily, quarterly)
based on stakeholder map

Answer 345

A

10 Project elements: 10) Quality and Performance Metrics:

sponsor signs off the quality
quality depends on individual perception
quality and success to be defined and agreed during Initiation
quality to be defined in SMART way
KPIs

Answer 346

A

Should project or/and product KPIs be set for a Project?

Both.

Examples:

financial
team
deliverables, milestones
scope
schedule
functional KPIs

Answer 347

A

What are the 5 stages of Project Planning?

1) Define the work
2) Specify duration & effort
3) Determine dependencies & resources
4) Clarify activity ownership

Answer 348

A

What are the steps for Work breakdown structure (WBS)?

Project -> Work packages -> Tasks -> Activities

Answer 349

A

RACI model:

Responsible, Accountable (one person!), Consulted, Informed

Used for delegation.

Answer 350

A

Benefits of Project Plan:

reduction of risks misunderstanding
setting expectations
transparency within the team on activities, schedule, status
verification of initial estimates
allows for lessons learned to use in the next projects

Answer 351

A

Status Report:

a format to communicate progress to stakeholders

crisp
neutral
helps to reduce risks, manage accountability, organize work

Answer 352

A

Types of Stakeholders:

Internal: employees, directors, managers
Connected: shareholders, customers, suppliers
External: local communities, government

Answer 353

A

What is the role of Data in business?

Empower business leaders to make decisions based on facts

Answer 354

A

What is Time-value of data?

Value of information drops quickly after it is created. If capturing, analyzing and acting on the information can be made faster, the value to the business increases.

Ingestion latency, analysis latency, decision latency.

Answer 355

A

DIKW Model:

Data, information, knowledge, wisdom.

The lifecycle of the data in an org. Decision making process is at the top of the pyramid.

Answer 356

A

Big Data -

Large and diverse sets of information from a variety of sources that grows at ever-increasing rates.

The data is so large, fast or complex that it is difficult or impossible to process using traditional methods.

3 V’s: volume, velocity abd variety of data

Answer 357

A

3 V’s: volume, velocity abd variety of data

Answer 358

A

Smart Data -

Digital information that is formatted so that it can be acted upon at the collection point before being sent to downstream analytics platform for further data consolidation and analytics.

Answer 359

A

Machine Learning -

… Application of artificial intelligence that provides systems the ability to automatically learn and improve from experience without being explicitly programmed. Training is required.

Machine learning is applicable as soon as we have data.

Ex Titanic survival algorithm

Answer 360

A

Data Science -

Field of study that combines domain expertise, programming skills, and knowledge of mathematics and statistics to extract meaningful insights and value from data.

Answer 361

A

Classes of Machine Learning:

Classification
Supervised learning
Output: binary (yes/no) or probability (%)
Ex: Titanic survival
Regression
Supervised learning
Output: continuous value (numerical)
Ex: how income affects life expectancy
Grouping (clustering)
Unsupervised
Output: objects grouped by similarity
Ex: customer targeting, Netflix
Anomaly detection
Unsupervised
Output: data points far from the common majority
Ex: how much customer’s payment behavior deviates form normal pattern

Answer 362

A

Supervised and unsupervised machine learning:

Supervised - model is trained based on historical data in order to teach the system to act on new data. A supervised is needed who inputs the data. Classification is an example.

Unsupervised - no supervised is needed. Few data points are added in, the system connects the dots by itself, the system learns on the go. We don’t know how many clusters there could be, or we have no historical data to enter.
Clustering (Netflix) is a good example.

Answer 363

A

Machine Learning Lifecycle is usually…

6-8 months during which the model is being trained

Answer 364

A

Classification algorithms - …

Predictive modeling based on example data input.

Not ideal for real life use cases. Yes/no doesn’t elaborate what is the % of yes/no.

Examples of classification:
KYC (% of being risky)

Label/Target - what we want to predict in the future
Features - input parameters
Input data, ex. customer data, card data, payment data
Model - function (created automatically by the system based on input data) mapping features to target
Model training - fitting the function to known labels; train 80%, test 20%
Model testing - applying a model on test known data
Prediction - applying the model on new unseen (unlabeled) data

Answer 365

A

train 80%, test 20%

Answer 366

A

Decision Tree -

… Humanly understandable model that can be followed to reach a decision (vs neural network that isn’t readable). Any neural network in regulated areas (ex. banks) have to be explained in a humanly understandable manner.

Answer 367

A

Black Box ML -

… 3rd party machine learning system

Answer 368

A

Model Evaluation -

… aims to estimate the generalization accuracy of a model on future data = how well the model can predict future results.

Well-known metrics for measuring classification model: Confusion matrix.

Answer 369

A

Confusion Matrix -

… shows how many correct predictions and errors the model has made. Actual = 1 & Predicted = 1 -> System worked.

Answer 370

A

Formula of Machine Learning Accuracy?

[Sum of all true positives + sum of all true negatives] / sum of all cases. Max is always at 99%.

Answer 371

A

What cannot be predicted using Machine Learning?

Stock market behavior. Because of:

mass psychological nature of markets
uncertainty
too many factors influencing the market

Answer 372

A

Advantages of blockchain:

Store of value
Low transaction fees
Lots of use cases
Accessible to high inflated countries/regions
Instant transactions
Money can be sent in small amounts
Micro-payments are possible
Can be created by anyone (ex. for loyalty points)
Cannot undo the transaction
Don’t have to store money in crypto, can exchange immediately (used by shops)

Answer 373

A

Disadvantages of Blockchain:

Volatile
Some cryptocurrencies aren’t backed up by anything
Not sustainable from a climate point of view
Some cryptocurrencies (ETH) have inflation rooted in the code
Cannot undo the transaction

Answer 374

A

Advantages of Smart Cities:

Hitachi’s vision:

Better Quality of life
Resource wise solution
Address global market
Enabling ICT technologies and Data

Inputs:

urbanization 70% by 2050
Environment energy-CO2 emissions
energy consumption (store energy during cheap periods, avoid peak hours ex 7-9am, 5-10pm)
Infrastructure is under pressure
Real-estate development (sq m price)
depreciated buildings
make urban layout more sustainable and optimal

Answer 375

A

Examples:

Strong e-identification
Smart business solutions (ex. e-residence)
Data-exchange infrastructure (ex. X-road) that notifies governments and municipalities
developments in IoT areas

Use-cases:

e-government
home readings utility providers (ex. estfeed, loxofon)
last-mile services

Answer 376

A

Silos:

open data is limited (ex exclusive deals with local companies in Finland, unable to use the same parking system)
standalone services that do not communicate to each other (ex. green public transport card; digital signatures are not cross-border-standardized)

Answer 377

A

ICT -

… Information and communications technology; the role of unified communications and the integration of telecommunications (telephone lines and wireless signals) and computers, as well as necessary enterprise software, middleware, storage, and others

Answer 378

A

Un/Ethical side of Smart Cities:

Surveillance
Power in hands of big companies providing solutions
Open network
Fast transport network required
Data protection
Dependency on TelCo operators

Answer 379

A

Advantages of Cloud Computing:

No need to data transferring
Data accessibility from any device
Remote access, no need in physical data transfers
Data processing in the Cloud
Software stored in the cloud
Infrastructure stored in the cloud (AWS)

Answer 380

A

Cloud Computing -

… on-demand(!!!) availability of computer system resources, especially data storage (cloud storage) and computing power, without direct active management by the user

Answer 381

A

Disadvantages of Cloud Computing:

Needs Internet
Security, unable to encrypt info stored in the Cloud
Copyright issues (Spotify, Napster)
Regulations (Dropbox in China)

Answer 382

A

Cloud Deployment Model -

… defines the nature of the cloud and the ways cloud is located and accessed

Answer 383

A

Types of Cloud service model:

public
private
community
hybrid

Answer 384

A

Public Cloud Model

made available to the general public, is owned by a 3rd party provider selling cloud services

ex: Dropbox (initially), Gmail,

Answer 385

A

Community Cloud Model

infrastructure is run in-house, and supports a particular group of people.

ex: common uni space

Answer 386

A

Hybrid Cloud Model

composition of two or more clouds that are bound together.

ex: Dropbox (Private + Corporate), Gmail (Private + Corporate)

Answer 387

A

Private Cloud Model

operated within an org. Closed infrastructure. Managed by org or by a 3rd party, and may exist on or off the premises.

ex: EBS, MS Data Center

Answer 388

A

Cloud Service Models:

SAAS
PAAS
IAAS
+ XaaS

Answer 389

A

SaaS:

Software as a Service.

Interacted with by end-users.
Everything is the responsibility by Cloud provider.

Ex: Dropbox, Slack, MS Office, etc.

Answer 390

A

IaaS:

Infrastructure as a Service.

Interacted with by narrow IT professionals who also build the platform layer. Can configure Operating Systems, build any kind of software.

Ex: AWS, Google Compute Engine.

Answer 391

A

XaaS:

Anything as a Service.

Ex. Music as a Service (Spotify). Graphics as a Service. Transportation as a Service (Bolt), Banking as a Service.

Answer 392

A

types of Cloud Technical Architecture:

heterogeneous cloud
homogeneous cloud
composable cloud
automated cloud

Answer 393

A

Heterogeneous Cloud …

allows the use of different (multiple) hardware types to work efficiently and cooperatively together

Answer 394

A

Automated cloud …

Adds a layer of automation in terms of how resources are allocated to users.

Ex AIOps (Artificial Intellegence for IT Operations).

Answer 395

A

Homogenous Cloud …

consists of hardware of one single vendor only (ex IBM)

Answer 396

A

Composable cloud …

Concept of virtualisation is introduced.
Middle control software level that connects different resources.

Virtualization - virtual non-physical servers existing through a virtualization platform that all exist on one physical server. Resources allocation.

Answer 397

A

Value of Cloud Computing:

Costs (hardware, software, maintenance, etc)
Improved IT flexibility (new business opportunities, business continuity)
Ability to innovate
Technical IT capacity
Improved collaboration (support)
Greater employee productivity

Answer 398

A

types of Computing:

cloud
fog
edge

Answer 399

A

Fog Computing …

connects Edge to the Cloud.

is an architecture that uses edge devices to carry out a substantial amount of computation, storage, and communication locally(!) and routed over the Internet backbone.

Answer 400

A

Edge Computing …

5G.
Distributed computing systems that are connected, and move closer to the user. Self-driving cars.

Edge computing is a distributed computing paradigm that brings computation and data storage closer to the location(!) where it is needed to improve response times and save bandwidth

Big Tech in Edge:

Amazon, ex: predictive maintenance, device management
Microsoft ex: telecom
Google, ex`; augmented reality
Apple, ex: data processing
Facebook, ex: virtual reality, smart glasses

Answer 401

A

Cloud Computing …

on-demand availability of computer system resources, especially data storage (cloud storage) and computing power, without active management by the user

Answer 402

A

Quantum Computing …

power increases expontetially in proportion to the number of qubits
computers have high error rates, and need to be kept ultracold

Characteristics of Quantum gaming:

randomeness
renderness, fast
realistic characters
optimal complex-enough game
real-time events
large downloadable capabilities
quick db queries
heavy video streaming

In different industries:

Finance: markets and portfolios performance prediction
Cybersecurity: break RSA encryption that used ti keep sensitive data secure
AI
Healthcare: simulation of chemical reactions that was not possible before

Answer 403

A

Difference between 1G all the way to 5G:

Every 10years
1G: Analog Voice
2G: Digital Voice
3G:  Mobile Broad Band (Internet)
4G: Better and faster Internet (LTE)
5G: A Connected World

Answer 404

A

5G is capable of:

less latency (better response), ex. controlling machinery from home, remote controlled surgery
throughput connection 100x
connection per km2 - 100x, ex: IoT devices are better connected
mobility 1,5x, ex: high-speed railway
network architecture, ex: slicing (one more latent layer for personal devices, mid/high for more critical devices such as self-driving cars)

Remote controlling: mining, medicine, agriculture, drones

Extended reality: gaming, tourism, sport & culture events

Massive IoT network: better coverage indoors and under ground, better battery life, more than 1mln devices per km2

Answer 405

A

Industries, companies and devices relying heavily on older G:

(2G & 3G)

Fleet
Home meter readers
Car devices (monitors)
Smart watches and other IoT do not need 5G to provide service because technically not feasible to switch them early

Answer 406

A

IoT:

Internet of Things, connected to each other through the network

Examples of first IoTs: space shuttle, atm, telegraph, fax, etc

Answer 407

A

3 business layers surrounding IoT:

IoT Applications (Content)
IoT Interconnectivity (Platform)
Connected Devices (=IoT Nodes = Devices)

Answer 408

A

Narrow-Band (NB) IoT - …

…meant for devices that only send data occasionally, ex once a day/week

Answer 409

A

Smart City Levels:

Environment (ex air)
Movable objects
Buildings
Apartments
Individual

Answer 410

A

Value for the customer - …

answers question why I buy something

Answer 411

A

Marketing is about:

bringing value
build a competitive advantage, make product outstanding
telling the continuous(!) story

Value = price

Answer 412

A

Marketer -

… Someone who seeks a response (attention, purchase, vote) from another party, called the prospect.

Answer 413

A

Types of Marketing:

Accidental
Intentional

Answer 414

A

Market oriented company -

telling customers what they want

when company’s culture is systematically and entirely committed to the continuous creation of superior customer value (slogans of the firms, ex. I’m loving it Mc)

Answer 415

A

3 Marketing Approaches:

Product push (ex. solar-powered lighting)
Customer-led (taxi services)
Resource-based (desease detection)

Answer 416

A

B2B -

… orgs that buy goods or services to use in the production of other products and services; or resell and rent those services and goods to others at a profit

Answer 417

A

B2B:

B2B Market:

less customers
larger-value transactions
customized products
negotiated products
lengthy, complex selling process
usage determines value
multiple buying decision-makers
derived demand

B2B Marketing:

complex relationship
emphasis on personal selling (dinners, conferences, etc)
competitive bidding for unique items

Ex. providers, re-sellers, shopping centres, grocery stores, etc

Answer 418

A

Fast-moving consumer goods (FMCG), also known as consumer packaged goods (CPG), are products that are sold quickly and at a relatively low cost. Ex. tooth paste, toilet paper, toothbrush, etc

Answer 419

A

‘ATL Marketing’ stands for ‘Above The Line Marketing’. This kind of marketing is the kind of marketing that has a very broad reach and is largely untargeted.

EX:

billboards
newspaper

Answer 420

A

‘BTL Marketing’ stands for ‘Below The Line Marketing’. This kind of marketing is the kind of marketing that targets specific groups of people with focus.

Answer 421

A

‘TTL Marketing’ stands for ‘Through The Line Marketing’. This kind of marketing is really an integrated approach, where a company would use both BTL and ATL marketing methods to reach their customer base and generate conversions.

Answer 422

A

Product Journey in B2B:

Producer
Seller
Reseller
Distributor
Store

Important to keep good relationship with resellers to get the best positioning.

Answer 423

A

Sales’ goal:

convince to buy
sell more

Answer 424

A

Marketing Dep’s Goal:

create demand
support sales

Answer 425

A

Role of Marketing is to …

explain the value of product

identify customer reqs
decide on competitive positioning to be adopted; what is it you are doing differently
focus efforts of all members of the org to satisfy customers

Answer 426

A

Marketing Mix:

The four Ps of marketing are the key factors that are involved in the marketing of a good or service.

They are:
- product
- price
- place
- promotion
of a good or service.

Answer 427

A

Customer 4C’s:

cost
customer solution (focus on prospects, not those who are already hooked to the product)
convenience
communication

Answer 428

A

GOST model (Goals, Objectives, Strategic Initiatives, and Tactics):

Primary objectives + Secondary objective translated into strategic initiatives, and therefore, to tactics

Answer 429

A

Primary objective of any company: more customers to be hooked up to my product (that will translate into profit)

Secondary objective of any company: identify the battle (ex. market/region)

Answer 430

A

Marketing Principles:

focus on customer
only compete in markets where you can establish a competitive advantage
customers do not buy products, they buy a story
marketing should be rooted in the company, not left to the marketing dep only; know the focus of the company (m&m ex)
markets are heterogeneous
markets and customers are constantly changing

Answer 431

A

Total customer value =

economic benefit + technical benefit + service benefit + social benefit

Answer 432

A

Market Offer =

Total customer value - monetary cost

Answer 433

A

how can market offer be improved?

speed of delivery
ordering procedures
condition of the product upon delivery
after-sales support
support costs and complexity
credit procedures
product guides and doc

Answer 434

A

customer value models:

understand different values for different consumer groups
predict provided value by customer segments
find value elements that differentiate value for dif groups
choose clients for whom the company provides the highest added value

Answer 435

A

Its customers

Answer 436

A

LTV -

value of all current and future profits generated from a customer over the life of his or her business with the firm

Answer 437

A

ABC Client Profiles:

a clients: whales - largest REVENUES

b clients: smaller clients, but LARGER profit margins

c clients: smallest clients

Answer 438

A

hub and spoke model:

network of consultants supported by staff

Answer 439

A

!!! Which concept involves adapting a firm to take advantage of opportunities in a constantly changing environment?

Strategic Planning

Answer 440

A

!!! What is Marketing Research?

Marketing Research is the “systemic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization.”

Answer 441

A

!!! How does Marketing Research differ from Competitive or Marketing Intelligence?

Market research deals specifically with your company, marketing strategy, and product line.

Market intelligence is information about the market itself, not your specific positioning necessarily.

Answer 442

A

!!! Marketing intelligence (MI) -

is the everyday information relevant to a company’s markets, gathered and analyzed specifically for the purpose of accurate and confident decision-making in determining market opportunity, market penetration strategy, and market development metrics.

Answer 443

A

!!! Competitive intelligence -

is the result of a company’s efforts to gather and analyze information about its industry, business environment, competitors, and competitive products and services

Answer 444

A

!!! Marketing information system (MKIS) -

is a management information system (MIS) designed to support marketing decision-making.

aka “system in which marketing data is formally gathered, stored, analyzed and distributed to managers in accordance with their informational needs on a regular basis.”

Answer 445

A

!!! Casual Research -

can be conducted within the company (convenience sample but bias) or with company partners.

Answer 446

A

What is selling?
one of many marketing components

What does selling include?
personal selling includes: 
- personal comms
- persuasion
- helping others with goods and services

Answer 447

A

Personal selling - personal communications of information

Golder role of personal selling: phylosophy of unselfishly treating others as you would like to be treated; not to be insulted easily

Answer 448

A

Different kinds of salespeople:

Traditional - do what they can get away with
Professional - ex. consultancy in Apple stores
Golden Rule salesperson

Answer 449

A

Salesperson’s goals:

themselves - earn a living
employees - companies to survive
customers- sell

Make products visible, and create the relationship and environment for a successful sell

Answer 450

A

Struggle of salesperson:

Bonuses are distributed between different products, when you are asked to sell worse performing product, it is harder to sell

Answer 451

A

Relationship between Sales and Marketing:

Marketing can do all the work to promote a product/service, but if Sales do not feel the same way, they wont sell it

Answer 452

A

Sales essentials:

relationship
listening
mutually beneficial solutions
overcome objectives
leverage resources for execution
close sale
evaluate sale

Answer 453

A

focuses of Sales and Marketing:

Marketing focuses on consumers and brands
Sales - shopping experience

Answer 454

A

Agency Problem -

… when a conflict of interests arises between the shareholders (aka principals) and managers (aka agents). Agents generally work in the interests of their principals, but when they don’t - it is an agency problem.

Answer 455

A

Managers are monitored through:

financial statements
audits
annual general meetings
removal of directors
corporate governance regulations

Answer 456

A

Agency costs -

.. are any costs associated with controlling that agents continue to work in the interests of their principals.

Ex.:

legal costs
incentives and fees
opportunity costs
reports and audits costs

Answer 457

A

Ways to measure company’s performance:

rations

Answer 458

A

Asymmetry of Information -

… manipulated information about company’s performance.

Exists between agent and principal. The root cause is due to the fact that Managers have daily access to financial information, while Shareholders - annual data to accounting data.

Answer 459

A

Reasons for Asymmetry of Information

Occurs when Managers are focused on:

reducing risk for the company
growth & maximizing the size of a company
increasing managerial power
creating personal job security
increasing pay & rewards
pursuing social or side projects

Answer 460

A

How to eliminate Agency Problem?

Shareholders to:
1) monitor managers'activities
- through audits
- reporting
- corporate governance
2) compensate & incentivise managers
- performance-related pay
- share options schemes (only in public firms)
 ESOPs - executive share option plans

Answer 461

A

Agency Relationship =

shareholders OWN the company + agents RUN it

Answer 462

A

Goal Congruence -

… the ultimate goal at which managerial actions are directed toward maximizing shareholders’ wealth.

Answer 463

A

Benefits of linking Rewards to Performance:

helps to attract and keep employees valuable
shows that their performance creates company’s success
motivates employees to act in the long-term interest of the org

Problems:

dysfunctional behavior, ex creative accounting
favoring decisions that result in remuneration
employees only concentrate on what is measured
personal performance over teamwork
high outputs at the expense of quality
long-term goals are too distant, and therefore ignored
accessibility of bonuses and rewards means lowered standards

Answer 464

A

Stewardship Code (UK) -

… the code that enhances the quality of engagement between Institutional Investors and Companies, in order to help improve long-term returns to Shareholders.

Answer 465

A

Influences of International and Digitalised Markets:

On investors:

increase of share ownership by investors from overseas
international mergers
subsidiaries from overseas
headquarters in large cities

On companies:

hard to identify investors one by one
more objectives
increases the need in corporate governance

Answer 466

A

Code of Conduct for Corporate Governance:

Board is responsible for major Policy & Strategic Decisions
Directors performance is assessed regularly
Chairman and CEO are separated
Independent Non-Executive Directors (NEDs)
Directors’pay is set by a committee consisting of NEDs
Appointments are administrated by NEDs
NEDs are liaised with external auditors
Board to maintain a regular dialog with shareholders

Answer 467

A

NEDs -

… Independent Non-Executive Directors

Answer 468

A

IFRS -

… International Financial Reporting Standards

Answer 469

A

Capital Expenditure -

…capital occurred to increase the company’s value.

Ex.:

machinery
R&D
advertising
patents

Answer 470

A

Relevant Costs related to Capital Increase:

Answers the question “What cash flows are changed by the decision?”

avoidable costs that are incurred only when making specific business decisions

Amounts are RELEVANT if:

they occur in the future
incremental (increased in the future)
cash
opportunity costs
cash invested in inventory or receivables
tax

Answer 471

A

Non-relevant Costs:

Answers. the question “What cash flows are NOT changed by the decision”

IRRELEVANT:

sunk and past costs
book values = past expenditure or revaluations
reappointment of existing fixed costs
depreciation
committed costs

Answer 472

A

Payback Period -

… the time it takes for CASH INFLOWS from a capital investment project to EQUAL the CASH OUTFLOWS, usually expressed in years

Answer 473

A

Return on Capital Employed (ROCE). -

.. another way of calculating if project is worth taking on. Companies compare ACTUAL ROCE to TARGET ROCE.

Answer 474

A

Net Present Value (NPV) -

… the value of a project obtained by discounting all cash inflows and outflows by a chosen target rate of return or cost of capital, & adding them.

Answer 475

A

Principle of The Value of Money -

… core principle of finance holds that provided money can earn interest, any amount of money is worth more the sooner it is received

Answer 476

A

Annuities -

… constant annual amounts, ex. constant rate, constant sales prices and volumes. Occur annually.

Answer 477

A

Perpetuity -

… a constant annual amount received FOREVER (±99y)

Answer 478

A

Role of Finance Manager:

… to control the flow of cash between financial markets and the firm’s operations.

Sell assets to INVESTORS
investcash in the firm’s operations & use it to purchase real assets (aka invest in the investment projects)
REINVEST cash

Answer 479

A

Financial management -

… management of the finances of an org in order to achieve the FINANCIAL OBJECTIVES.

Maximize shareholders’ wealth by paying dividends & Increasing the market value of the org.

Answer 480

A

Each shareholder wants these 3 things:

1 to get richer
2 transform wealth into borrowed money now or reinvest to spend later
3 manager risks associated with nr 2

Answer 481

A

Corporate Objectives:

maximization of profits (aka cash)
maximization of sales (may lead to overtraining)
survival
social responsibility

Answer 482

A

Levels of Strategy in an Org:
(from top to bottom)

Corporate Strategy - direction of the whole org; relates to: market share, growth, satisfaction
Business Strategy - how to tackle particular markets
Operational / Functional Strategy = for different departments

Answer 483

A

Accounting Profit vs Economic Profit:

Accounting Profit can be manipulated.
3 examples of Acc Profit manipulation:
1) depreciation & anticipated losses
2) capitalization of dev costs
3) adding overhead costs to inventory valuations

Economic - the cash received.

Profit does not take into account risks and volumes of investment.

Answer 484

A

Internal sources of finance:

1) remaining money after TAX and DIVIDENDS = aka RETAINED EARNINGS
2) working capital - what’s left after liabilities are covered by assets (ex inventory, receivables)

Only Cash can be reinvested!

Advantages of internal financing:
- ready source of cash
- decision on how much to pay
- no issue costs
- no dilution of control
- no restriction on business ops
BUT limited by Cash Flows.

Answer 485

A

Cash Conversion Cycle -

… = inventory days (materials into goods) + trade receivables days (credit customers) - trade payable days (paying suppliers)

Can be reduced via:

1) reduce inventory
- shorten production time
- reduce wastage
- reduce inventory levels
- obtain better prices
2) reduce receivables period
- offer discounts to early payers
- reduce payment terms
3) increase payment period to suppliers
- delay payments
- negotiate better terms

Answer 486

A

External sources of finance:

1) debt (short-term, medium-term, long-term): bank LOANS, BONDS
2) equity = ordinary and preference SHARES

Answer 487

A

Capital Market -

… market where 2 parties can exchange goods & services.

2 main functions:

primary
secondary

Answer 488

A

Primary market -

raise long-term funds from financial institutions & private investors

Answer 489

A

Secondary Market -

… investors sell sahres & bonds or buy new ones

Answer 490

A

Types of Securities:

ordinary shares (can vote)
bonds and loan stocks (secured or unsecured)
convertible bonds (bonds -> shares)
preference shares (paid first, don’t vote)
eurobonds (bonds outside of country, less regulated)
treasury bills & government stock (borrowings by gov)

Answer 491

A

Capital Markets Efficiency :

Operational Efficiency
- low transaction costs
- minimal barriers for trading
2) Allocational efficiency
- primary markets direct funds to their most productive uses
3) Pricing efficiency
- fair pricing on secondary markets
4) International efficiency
- prices reflect all available information
- freely available information

Answer 492

A

Perfect (Efficient) Market :

no barriers to buy/sell
all have the same expectations for pricing
free entry and exist
info is available for free
large number of buyers and sellers, no dominance

Answer 493

A

3 forms of market efficiency:

weak - markets are efficient based on PAST data
semi-strong - efficient based on PUBLICALLY available info
strong - efficient based on ALL PUBLIC and PRIVATE info

Implications of Stock Market Efficiency on Companies and Managers:

share price fairly reflects the value of the company and market expectations about the future
financial managers need to increase wealth to increase the share price
manipulation of accounting information will not mislead the market
timing of new shares issue is not important

Answer 494

A

Random Walk Hypothesis -

… if we know share price at the end of one period, we cannot accurately predict the share price at the end of the next period

Answer 495

A

Technical Analysis & Fundamental Analysis of Stock Markets -

Technical uses CHARTS to predict the future share prices. Implies that there is a link between past and future.

Fundamental Analysis uses PUBLIC information to calculate fundamental share value, then - compares this value to the current one.

Answer 496

A

Anomalies in Share PRice bahevior:

1) Calendar Effects
- weekend effect
- share prices rise during thee last 15 min of trading
- some months (April in UK, Jan US) show higher returns
2) Size anomalies
- in long run, investing in smaller companies shows higher returns
3) Value effect - higher returns when investing in value stock (shares with high earnings)
4) Abnormal Returns - when investing in portfolios with poor past returns (ex Google)

Answer 497

A

Behavioral Finance -

investors are not able to consistently make decisions that maximize their wealth.

Answer 498

A

rely on when Assessing Financial Performance:

financial statements
financial databases
financial press and internet
ratios (ex ROCE, EPS)
by comparing to similar companies

Answer 499

A

Risks Categorisation:

Strategic = enterprise risk; when unable to achieve strategic objectives
Operational: ex business processes, missed opportunities, financial risk, overtrading, currency exchange, compliance risk, tax problems
Credit risk = credit default risk; ex credit policy, customer quality, credit vetting; Liquidity Risk = difficulty meeting obligations
Country risk / Market risk = aka systemic risk; ex value of an investment will decrease, interest rate changes, foreign exchange rate

Ex: Common risks: market risk, credit, IT, legal, health, etc

Answer 500

A

Risk Management ages:

1st age: non-enterprevenural: fire, fraud, pollution, etc
2nd age: when preventive methods are applied to the 1sr age risks
3rd age: entrepreneurial: innovation, investments, new & emerging markets

Answer 501

A

Risk Management Process:

Identify -> Analyze -> Review -> Manage

Answer 502

A

bid price (set by banks)

Answer 503

A

offer / ask price

Answer 504

A

3 forms of Foreign Currency Risk:

1 Transaction exposure aka transaction risk (short-term) - the difference in price between when the price is agreed and the date when the cash is paid
2 Translation exposure aka translation risk (book gains or losses) - org will make losses when the accounting results of its foreign branches or subsidiaries are translated into home currency
2 Economic exposure aka economic risk (effect on present value of longer term assets) - effect on exchange rate movement on the international competitiveness. A country’s economy becomes more or less competitive because of depreciation/appreciation of currency

Answer 505

A

Supply and Demand of Curerncies influenced by:

rate of inflation
interest rate
balance of payments in goods and services
inward and outward foreign investments
speculation
government policy

Answer 506

A

Interest rate Parity -

… method of predicting foreign exchange rates based on hypothesis that the difference between interest rate in 2 countries will offset the difference between the spot rate and forward rate.

Answer 507

A

Purchasing POwer Parity -

exchange rate between 2 currencies is the same in equilibrium when the purchasing power of currency is the same in each country.

Answer 508

A

Foreign Currency Risk Management tactics:

HEDGING
MATCHING receipts & payments: wherever possible, a company that expects to make payments and have receipts in the same foreign currency should plan to of set it payments against its receipts in that currency.
INVOICING IN OWN currency
LEADING & LAGGING the times
exchange CONTRACTS (for fixed exchange rates)
NETTING

Answer 509

A

Money market hedging -

borrowing in one currency, converting the money to another currency & putting the money on deposit until the time the transaction is completed.

Answer 510

A

Currency Future Contract -

contract for sale or purchase at a set future date of a set quantity of currency

Answer 511

A

Currency Option -

protect against adverse exchange rate movements while allowing the investor to take advantage of favorable rates. Pays a premium.

Answer 512

A

Currency Swaps -

exchange of debt from one currency to the other. Longer periods than Future Rate.

Answer 513

A

Floating Interest rate Debt (Risk) -

… form of interest rate risk faced by non-bank company is the volatility of cash flows associated with high proportion of floating interest rate debt

Answer 514

A

Fixed Interest rate Debt (Risk) -

… company with fixed interest debt has committed to fixed interest payments. Means loss when rates fall.

Answer 515

A

Gap Exposure -

… the degree to which the firm is exposed to interest rate risk.

Negative gap - more liabilities
Positive gap - liabilities are covered.

Answer 516

A

Basis Risk -

when floating rates aren’t determined using the same basis of benchmark

Answer 517

A

Causes of interest rates fluctuations:

re-lending
size of the loan
different types of financial assets
duration of the lending

Answer 518

A

Bonds -

alternative to stocks, issued by corporations, governments, states, local municipalities.

They are predetermined promises & fixed amount of interest per year.

Bond cosists of:

yield - rate of return; aka the % earned if the bons is sold; if bond is purchased cheaper, then yield is higher than coupon rate, and return is higher
par value - face value returned to the holder at maturity
price - %of face value
coupon - interest rate
price - of the bond; same as par value when bond issued, flactuates after

Answer 519

A

Zero coupon rate -

bond that is issued at big discount, below the par value.

Answer 520

A

Bond’s Maturity -

time until bond issuer returns the par value and redeems the bond

Answer 521

A

Call Provision -

gives corporation the option to redeem the bond before its maturity date

Answer 522

A

Bond Rating - future risk.

AAA -> 0 risk
The lower is the rating, the higher are chances of default. Lower rating -> higher risk -> higher return

Answer 523

A

Defaulting Bond -

bond that stops paying coupon interest resulting in loss by investors

Answer 524

A

Junk Bonds -

high risk bonds with high return. Rating BB and lower.

Answer 525

A

Corporate vs Junk Bonds:

Corporate pays higher yield, risk varies

Junk: very high yield (10-12%), high default rate

Answer 526

A

Treasury Bonds -

the safest security.

exempt from taxes
issued by gov
avg return 4% over 50y
short & long-term bonds (t-bills & t-bonds)

Answer 527

A

T-bills & T-bonds:

T-bills:

does not pay coupons
only face value at maturity
sold at discount
very safe
sold at auctions

T-bonds:

pays coupons
interest rate=coupon rate
safe
risk-free

Answer 528

A

Default rate of a Bond -

the chances of bonds defaulting. Depends on the rating.
Muni bonds default ± at the same rate as corporate bonds (±0,4)

Answer 529

A

microeconomics theory that enables managers to select strategic direction, and to respond to tactical issues.

Helps with decisions about:
􏰀 Shape pricing
􏰀 Output decisions
􏰀 Optimize the production process and input mix
􏰀 Choose product quality
􏰀 Optimally design internal and external incentives

Answer 530

A

6 steps of decision-making:

Define the problem
Determine the objective → if “you cannot always get what you want”, you need to know at least what you want
Explore alternatives
Predict the consequences: deterministic, probabilistic models
Make a choice: optimal decision
Perform sensitivity analysis

Answer 531

A

The value of a firm is determined by:

is defined as the present value (PV) of its expected future profits

Answer 532

A

Present Value (PV) of a Future Value (FV) to be received at the end of ”n” periods, when the interest rate is ”i”

FORMULA:
PV = FV / (1+i)^n

EXAMPLE
For example, the present value of $100 in 10 years if the interest rate is at 7 percent is: PV = $100 / (1+0.07)^10=$50.83, This means that if you invested $50.83 today at a 7 percent interest rate, in 10 years your investment would be worth $100

Answer 533

A

present value of a stream of future amounts, FVt, received at the end of each period for ”n” periods

FORMULA:
PV Annuity = FV1/(1+i)^1 +FV2/(1+i)^2 + FV3/(1+i)^3…etc

Answer 534

A

Suppose a manager can purchase a stream of future receipts FVt by spending C0 dollars today. The NPV of such a decision is:

FORMULA:
NPV = [FV1/(1+i)^1 +FV2/(1+i)^2 + FV3/(1+i)^3…etc] - C0, where C0 is the initial investment

Answer 535

A

NPV < 0 : Reject Project

NPV > 0 : Accept Project

Answer 536

A

An asset that perpetually (forever) generates a stream of cash flows CF at the end of each period is called a perpetuity

FORMULA:
PVperpetuity = Cash Flow1/(1+i)^1 + CF2/(!+i)^2…etc
OR
PVperpetuity = CF / i

Answer 537

A

Marginal Analysis:
Analyzes the additional benefits derived from a particular decision and compares them with the additional cost incurred
The maximization rule is: MR = MC

Marginal Principle:
To maximize net benefits, the managerial control variable should be increased up to the point where MB = MC
- MB > MC means the last unit of the control variable increased benefits more than it increased costs
- MB < MC means the last unit of the control variable increased costs more than it increased benefits

Answer 538

A

Net Benefits = Total Benefits - Total Costs

Answer 539

A

is a change in total benefits arising from a change in the control variable, Q

FORMULA:
MB = △B/△Q

Slope of the total benefit curve

Answer 540

A

Consumer Theory:
The demand schedule will give you how much would be purchased at alternative prices → holding everything else constant
Consumer income, advertising, price of other goods are ignored

Demand shifters:
- other criteria that influence the decision to buy
Examples:
Tastes and preferences
Income 
Normal and inferior goods
Prices of related products 
Substitute and complement goods 
Expectations about the future
Number of buyers

Answer 541

A

The demand schedule allows us to draw the demand curve

Answer 542

A

The market demand curve indicates the total quantity of a good all consumers are willing and able to purchase at each possible price, holding everything else constant

Gallons of petrol example

Answer 543

A

Price and quantity demanded are inversely related

→ As the price of a good rises, and all other things remain constant, the quantity demanded of the good falls

Answer 544

A

changes in variables such as income or the price of another good, lead to a change in demand
This results in SHIFT of the entire demand curve
changes in the price of a good lead to a change in the quantity demanded of THAT good
movement ALONG a given demand curve

Answer 545

A

Increasing the price of a product will reduce the purchasing power of your money or income. Conversely, a price reduction will increase the purchasing power of your dollar.

Answer 546

A

is the decrease in sales for a product that can be attributed to consumers switching to cheaper alternatives when its price rises. One product replaced with another (ex Pepsi vs Coca-Cola)

Answer 547

A

Substitutes-

are identical, similar, or comparable to another product, in the eyes of the consumer. Substitute goods can either fully or partly satisfy the same needs of the customers.

Answer 548

A

Complements-

A complementary good or service is an item used in conjunction with another good or service.

Answer 549

A

Normal good -

a type of a good which experiences an increase in demand due to an increase in income.
Ex. more eating out when wage is higher.

Answer 550

A

Inferior -

is a good whose demand decreases when consumer income rises, unlike normal goods.
I.e. bad quality products that could be replaced by better quality goods. Ex. shoes from Ecco vs random unknown brand.

Answer 551

A

Consumer surplus -

is the difference between the price that consumers pay and the price that they are willing to pay.

Answer 552

A

Producer Surplus -

is the total amount that a producer benefits from producing and selling a quantity of a good at the market price. The total revenue that a producer receives from selling their goods minus the total cost of production equals the producer surplus.

Sold Goods - Total Cost of Production = Total Revenue

Answer 553

A

The ratio of the percentage change in quantity demanded to the percentage change in price, assuming that all other factors influencing demand remain unchanged

FORMULA
εD = %∆Q / %∆P = ∆Q/∆P x P/Q

|εD| > 1 ⇒ Elastic demand
|εD| < 1 ⇒ Inelastic demand

Answer 554

A

What does the price of elasticity tell us?

Think about the revenue of the firm: TR = P × Q
The more elastic the demand is, the larger the change in revenue is

Answer 555

A

Marginal Revenue -

The change in total revenue that results from a one-unit change in quantity demanded

FORMULA:
MR = ∆TR / ∆Q = [P2(Q2-Q1) + (P2-Pq)Q1] / (Q2-Q1)
or
MR = P(1+ 1/εD)

Answer 556

A

Elasticity-Revenue Relationships -

Knowing whether and at what magnitude demand is responsive to: 
􏰀 Changes in price
􏰀 Advertising
􏰀 Packaging
􏰀 Promotional displays

Answer 557

A

Factors Affecting the Price Elasticity of Demand:

The availability and closeness of substitutes
Percentage of the consumer’s budget
Durability of the good
Time period

Answer 558

A

Income Elasticity -

The ratio of the percentage change in quantity demanded to the percentage change in income, assuming that all other factors influencing demand remain unchanged

FORMULA:
εy = %∆QD / %∆Y

εy > 0 Superior
εy < 0 Inferior

Answer 559

A

Superior good -

that typically make up a greater percentage of a person’s spending as their income rises. These are generally expensive, scarce and high quality as compared to available alternatives and substitutes

εy > 0 Superior
εy < 0 Inferior

Answer 560

A

Cross Elasticity of Demand -

The ratio of the percentage change in quantity demanded of good A to the percentage change in the price of good B, assuming that all other factors influencing demand remain unchanged

FORMULA
εcross = %∆QDA / %∆PB

εcross > 0 Substitutes
εcross < 0 Complementary

Answer 561

A

What is behind the Politicization of the Businesses?

Globalization is behind the phenomena. Private firms take over governmental tasks of social regulation and operate as new providers of citizenship rights and public goods.

Answer 562

A

Superior good -

that typically make up a greater percentage of a person’s spending as their income rises. These are generally expensive, scarce and high quality as compared to available alternatives and substitutes

εy > 0 Superior
εy < 0 Inferior

Ex. houses

Answer 563

A

Old idea:
Businesses deal with economics only, isolated from the society

New idea:
Businesses are heavily involved in social areas of life

Answer 564

A

the society uses its resources most efficiently

Answer 565

A

to focus on the protection of people, enforcing voluntary contracts, and minimizing externalities.

Government and state are separated from private interests.

Answer 566

A

focus on economic issues.

Answer 567

A

business = economics
government = politics

Characteristics of Classical Liberal Democracy:
The limited public sector with the provision of:
- monetary system
- constitution and parliament
- independent judiciary
- background institutions for competitive markets

Answer 568

A

Promise of Private Power (aka Businesses)

because of the pressure from NGOs, businesses are required to develop codes of conduct for their global brands, that eventually get audited for better working conditions.

Brands, due to globalisation, exit factories.

Answer 569

A

Total Institution -

no boundaries between different spheres of life; one single bureaucratic order when a business is rooted in all areas of the life of a person
ex. people are living on-site where they work/study

Answer 570

A

wrote a book about The Threshold Level of Decency

she does not focus on people’s satisfaction, but if they can do what they want to do; subjectiveness is ignored

“What each person is able to do and to be”

List of Basic Human Capabilities by Martha C. Nussbaum:
1. Life
2. H
Universal standard of decency
ealth
3. Bodily Integrity
4. Senses, Imagination, Thought
5. Emotions
6. Practical Reason
7. Affiliation
8. Other Species
9. Play
10. Contol over one's environment: a) Political, b) Material

Human life is a network where you cannot compensate one capability with something, such as money. All 10 human capabilities need to be present in person’s life.

Capabilities are better metrics than material resources, preferences and functioning because they are subjective. Ex. what is enough money?

Answer 571

A

identify business practices in global economy that may push people below the decency level; and eliminate them on a global level

Answer 572

A

When social lives are being affected not just by the governments, but also by the businesses with power.

= politicization of the businesses.

Answer 573

A

Which type of democracy supports an effective market economy?

Classical Liberal Democracy

Answer 574

A

3 paradigms of CSR:

Economic (neutral) = firms are economic players; any CSR needs to be justified from an economic perspective
Critical (negative) = all CSR is an extension of the private power in the society; businesses use CSR as a political agenda; there is no democratic justification of the private power in the society
Political (poShareholder Primacy (Friedman)

Shareholder Primacy (Friedman)sitive) = no boundaries between politics and economics; if firms want the power, they have to take on the political responsibilities

Is there an integrative version of three?

Answer 575

A

Shareholder Primacy (Friedman)

the underlying concept of Classical Liberal Democracy, i.e. the firms should be economically oriented, to maximize shareholders’ wealth.

Answer 576

A

Total Economic Value of Firm (Jensen):

Limited government. The strict separation between economy and politics. The strict separation is too narrow, the firms should also focus on the long-run total value of firms.

Answer 577

A

Mainstream CSR

The division of responsibility and power is good. There is a business case for CSR.

Answer 578

A

Market Failures Approach (Health)

Government and market failures should NOT be used in firms’ advantage.

Answer 579

A

What is the reason for the shift from Classical Liberal Democracy to Deliberative PCSR?

Globalization

Answer 580

A

Deliberative Paradigm -

private firms take over governmental tasks of social regulation and operate as new providers of citizenship rights.

Answer 581

A

Rational -> Reasonable

Economic rational -> Politics & Social Responsibility

Answer 582

A

Surveillance capitalism -

when our data is being used in various capital areas, ex. marketing

Answer 583

A

Forms of private power:

There is no longer federal control, no tenders.

money over the pure competition
filling in the gaps that the government is unable to
using the lack of understanding about technical possibilities in the government to firms’ advantage
being the first in something

Answer 584

A

Traditional vs Novel Relationship between Politics and Business

Novel:

huge information asymmetries
lack of expertise by the regulator
global reach and consumer base
control over media distribution
surveillance, lack of privacy, limited freedom of speech
monopolistic power in some areas (ex over information, personal data)
self-regulation
knowledge production that even governments become dependable on
business models based on personal data usage

Answer 585

A

Ways and means of Classical Liberalism:

pro-competition regulation
merger and antitrust enforcement
public utility regulation
other antitrust measures
defining data ownership
surveillance as a negative externality

Answer 586

A

Institutional mechanisms to control democracy:

addressing market failures
creating competition in the market

Answer 587

A

Classical Liberalism is not enough because

The price of the share is not a good indicator of the efficiency of the firm.

Answer 588

A

Externality Tax on Surveillance

One way of controlling the firms is through the tax on data that is free today. The firms create enormous firm values out of the free data.

Answer 589

A

Defining Property Rights on Personal Data

Another tool of controlling the firms. Ex: GDPR.

Answer 590

A

Limits of Classical Liberalism:

does not focus to neutralize the economic inequality
this creates a free space for Big Tech to expand
economic power is easily transformed via (resources, knowledge, high image) tech lobby into the political power
the use of money in politics is against the Classical Liberalism

Answer 591

A

Ways and means of Deliberative PCSR:

voluntary self-regulation based on their deliberations with their stakeholders
industry-level multi-stakeholder initiatives and forums
internal democratization of firms

Answer 592

A

Flip Side in the US -

US is no longer the home of free markets due to the political activities of major corporations

Answer 593

A

Integration possible if:

there is a solution/standard for privacy
some of the power is given away to private power

Answer 594

A

High Liberalism:

The whole idea of Liberalism that there must be a border between private and public sectors.

concerned with individual liberty, social justice, equality, poverty as well as economic efficiency
economic contracts need to be regulated more than they are right now
markets need to have a less extensive role
the need for the political role of companies is diminished
public sector should not only be interested in economic value, but also justice

Answer 595

A

High Liberal Integration -

the solution proposed by politicians to limit power of private firms

Answer 596

A

Democratic Deficit in Political CSR

Democratic Deficit - refers to a perceived lack of accessibility to the ordinary citizen, or lack of representation of the ordinary citizen, and lack of accountability

To give private firms more power, we need to have:

democratic corporate governance
stronger separation between private and public
deliberative forums between firms, NGOs, etc, aka business leads democratization processes on macro and meso levels

Answer 597

A

Deliberative Democracy (Habermann) -

something that goes beyond economic rationality; best ideas count, does not matter who they are coming from

Background justice that is needed for this ideas:

equal political freedoms
equality before the law
economic justice
procedural fairness

Answer 598

A

Deliberative PCSR

seeks to address governance gaps where governmental institutions are unwilling or unable to provide a particular public good

Answer 599

A

Democratic Deficit -

loss of social acceptance stemming from the firm’s ability to allocated or withdraw their resources to public issues at will

Some deliberative processes and structures initiated by the firms can have the opposite effect and nay erode macro-level democracy

Answer 600

A

1!. democratic market economy: economy and politics are strictly divided
2. fully privatized society: the society can function without a government (except army and police)
3!. fully democratized society (aka democratic socialism) - democratic sector of society is extended, both firms and governments act in the interests of the society; utopia?
4. privatized democracy (a perfect mix): public sector functions in the economic interests, and there are more expectations from the firms for the society

Answer 601

A

Privatization of cities -

when public space is being bought by the firms, ex billboards, advertisements, Velib in Paris, cheating regulators by Volkswagen

Democracy becomes elite.

Answer 602

A

Dynamic Challenges of Deliberative PCSR:

increasingly privatized liberal democracy (ex. Australian mines)
democracy only for the stakeholders of the business (ex. Lafarge)
internal democratization in the privatized welfare states (ex. Velib)
democratic corporate governance undermining the public good (ex. Volkswagen)

Answer 603

A

Why it is necessary to let the Classic Liberal Democracy go?

Some firms may be interested in focusing purely on economics.

Privatized Democracy (a mix) may be the best solution here.

Everything in society is based on who has the economic power.

Answer 604

A

Ops Management -
- management of resources that are crucial to deliver a product or a service

Ops Management uses… RESOURCES to APPROPRIATELY CREATE OUTPUTS that FULFIL DEFINED MARKET REQUIREMENTS

Answer 605

A

Ops Function -
the part of org which creates and delivers services and products for the org’s external customers

3 core operation functions / operations functions:

Marketing (promotes products, creates demand)
Product/Service Dev (modifies products)
Operations (produces products)

Answer 606

A

Ops Manager -

people who have particular responsibility for managing some, or all, of the resources that comprise the ops function

Uses resources to appropriately create outputs

Answer 607

A

Operation Management / Operations Management consists of:

Directing
Developing
Delivering
Designing processes

Answer 608

A

Org responses to changes through:

adaptation of technology
adaptation of supply chain
implementation of societal and environmental policies

Answer 609

A

Operation consists of:
Input resources -> Transformation process -> output products and services -> value-added for customer

Types of outputs:

pure products
…
pure services

Transforming resources:

facilities
staff

Transformed resources:

materials
information
customers

Answer 610

A

Process hierarchy -

is a cascade of operations or processes.

Analyzed on these levels:

supply network
operation
process level

Answer 611

A

Who manages operations?

All and every department of the business/company

Answer 612

A

Operation and non-operation functions

Operations delivers and creates.

Non-operations do not create or deliver external services, BUT deliver internal services (supportive services).

Answer 613

A

4V’s:

Volume dimension of the output (Low vs High) - ability to handle a certain volume
Variety (Low vs High) = different kinds
Variation in demand (Low vs High) = changing demand
Visibility (Low vs High) = how the customer perceives

4V’s examples:
Low Variety, High Volume: Mass-market
High Variety, Low Volume: Constructions, individual orders

Answer 614

A

Why does ops matter?

can make or break
makes business
helps to create sustainable advantage
costs reputation

Answer 615

A

How is ops performance measured?

There are ALWAYS 3 lvls:

Societal lvl (CSR): triangle = planet, people, profit
Strategic level: risks, learnings, capital, cost, revenue
Operational level: quality, speed, cost, flexibility, dependability

Societal level:
- all stakeholders are taken into account
- SCR
- impact on social, environmental, economic levels (profitability, return on assets, return on investments)
- etc
KPIs ex.:
- safety (tesla)
- pollution
- economic

Strategic level:
- utilization of ops capacity
- less waste
- less failure, reduced errors
- process for learning and improvement
- etc
KPIs ex:
- service interruptions
- return on assets
- capacity
- profitability
- revenue from new offerings
-etc

Operational level:

conforms customer needs
faster delivery
doing things in time
deliver what is promised
every EUR moved from ops costs is an EUR earned

KPIs ex:

defects
scrap lvl
lead time
throughoutput time
complaints
product range
machine efficiency
etc

Answer 616

A

Balanced Score Card (BSC) -

combination of measures for operations, strategy and social
multi-dimensional performance measurement approach; combines main aspects of business: Financial. Customer. Learning and Growth, Internal process

Answer 617

A

Strategy vs Operational Strategy

Strategy - high-level, where we want to be; long-term; detached from day-to-day activities

Ops Strategy - deals with strategic options for the resources that create products and services and how they are best employed in order to contribute to the overall strategy

Answer 618

A

Perspectives on Ops Management:

Top-down (boss -> employees)
Outside-in (dictated by the demand)
Bottom-up (learn from employees)
Inside-out (resources dictate)
ex Six-Sigma & TQM

Top-down ops strategy

corporate (overall company’s direction)
business (business units)
functional (functions in the business units)

Bottom-up ops strategy:
- mutually reinforcing with top-down approach.
= knowledge-based view of the firm - tacit knowledge needs to be shared inside the company, and made explicit
ex BPM, Lean

Inside-out ops strategy:
- producing products based on key resources that create a competitive advantage.

Rare, valuable, non-imitable, non-substitutable.

Answer 619

A

Business model vs Operating model

Business model (WHAT):

value proposition
target customers
core capabilities
revenue streams

Operating model (HOW):

how the critical work is carried out
relationships
processes
structures

Answer 620

A

Competitive factors:

order winners - factors that directly contribute to success
order qualifiers - factors that need to meet a certain criteria, the level of quality above which won’t help to get more customers
less important factors - do not influence customer decisions in a significant way

Answer 621

A

strenghtens brand
reduces cost
reduces failure rate
differentiation

Answer 622

A

Innovation structures:

functional org
lightweight project management
balanced matrix org
heavyweight project management
pure project org

Answer 623

A

Innovation structures:

Through increasing project orientation.

Kinds:

functional org
lightweight project management
balanced matrix org
heavyweight project management
pure project org

Innovation approaches: Business Design approach = Agile
Classic approach = Waterfall.

Answer 624

A

Process mapping -

identifying the types of activities that take place during the process, that shows materials, people, information through the process, in order to identify what could be optimizied

Ex:

process blueprinting
process analysis

Answer 625

A

Little’s Law:

Little’s Law - is a theorem that determines the average number of items in a stationary queuing system, based on the average waiting time of an item within a system and the average number of items arriving at the system per unit of time.

Throughput-time = WIP (queue) * Cycle Type

shows:

the avg time that the product spends in the whole system (throughput)
avg number of things in the system (WIP)
avg rate at which one product leaves the system (cycle time)

Answer 626

A

Workload -

activities that do not add directly to the end product/service, but are necessary in the process (ex. swicthing machine)

Answer 627

A

Work content -

directly related to the end product or service (ex scanning products in the grocery store)

Answer 628

A

Process Arrangements, kinds:

Long-thin (sequential, step-by-step), ex Waterfall
Short-fat (parallel),ex Agile

Long-thin benefits:

controlled flow of items
lower capital reqs (specialists, simple machinery)
simple handling
more efficient operation (can predict the entire process)
if breaks down - out of work
ex. watch

Short-fat benefits:

higher mix flexibility
higher robustness
higher volume flexibility
less monotonous work
can move employees around, more interchangeable
production doesn’t stop if one employee is unavailable

ex. sorting trash/packages, packaging

Answer 629

A

Factory/Office Layouts:

fixed-position layout (high-class restaurant, “you” orientation; short-fat)
functional layout (every function has a dedicated space)
cell layout (self-service with dedicated areas for different food)
line (product) layout (one line, self-service, low-cost, long-thin)

Answer 630

A

Long-thin + Line layout

Short-fat + functional layout

But there could be combinations of different arrangements and layouts

Answer 631

A

Business Process Re-engineering (BPR)-

puts into question the fundamental assumptions of the as-is process; takes the entire line(!) of the process

It is an outcome-driven process. End-to-end process.

Ex. Ford Case:

do it CHEAPER
do it FASTER
do it BETTER

Principles of BPR:

capture info once and at the source (shared data-store: X-road)
who uses the process drive the process (record transaction at the moment when it takes place)
treat resources as centralized even if spread
put the decision point where the work in performed (vendor-managed inventory)

Answer 632

A

Business Process Management (BPM) -

involves combination of modeling, automation, execution, control, measurement and optimization of business activity flows.

ex:

ISO
Six Sigma

Key features of BPM:

about improving (not automation)
can be supported by software
can optimize personnel
repetitive (ongoing improvement)
ISO 9001 is an example of quality standard that promotes process-oriented approach to managing ops

BPM lifecycle:

identify the process (prioritize based on strategic importance and feasibility)
analyse as-is model
redesign the process
model the new process
execute the new process
monitor and control
re-iterate

Answer 633

A

Which processes to re-engineer?

are they standard or ad-hoc
are they used for training
are they strategically important and feasible
do they require a certification
would it reduce waste
etc

Answer 634

A

Ways to QUALITATIVELY analyse a process:

Value-added analysis (Seven Wastes)
Root Cause Analysis (RCA): 5 Whys, Affinity Diagram, Fishbone Diagram
Pareto Chart

Answer 635

A

TIMWOOD (7 topics looked at):

Transport
Inventory
Motion
Waiting
OverProcessing
Over Production
Defects
Extra: Unsafe Workplace, Lack of Information, Equiptment Breakdown, Unused Talent, etc

= Lean Manufacturing, Just-in-Time production

Answer 636

A

Value-added analysis methodology

break down processes into steps
classify each step:
1 value adding (VA) = is the customer ready to pay for this step?
2 business value-adding (BVA) = would the business have problems long-term if this step is removed>
3 non-value-adding (NVA) = to be eliminated

Answer 637

A

Root-cause Analysis (RCA)

issues that:
1) limits efficiency
2) occurs repeatedly
3) problem, not a symptom of the problem

Tools:

5 whys: one major cause
fishbone diagram: numerous major causes
affinity diagram: several inter-related and detailed causes

Answer 638

A

QUANTITATIVE process analyses:

flow analysis (what we did in the paper)
queuing theory
process simulation models

Answer 639

A

Queuing theory

Queueing theory - is the mathematical study of waiting lines, or queues. A queueing model is constructed so that queue lengths and waiting time can be predicted.

helps to calculate:

avg nr of jobs in the queue (queue length)
avg time one job is in the queue
avg time one job is in the system (avg cycle time)
avg nr of jobs in the system (WIP)

Answer 640

A

based on parameters that allows to see the effect immediately (Bizagi)

Answer 641

A

a graphical notation that depicts the steps in a business process

ex. Bizagi

Answer 642

A

Cost, Dependability, Flexibility, Speed, Human Capital, Resources

Answer 643

A

Radical (ex startups, Uber)

Incremental (corporations)

Answer 644

A

Key elements of improvement:

improvement cycles (Plan-Do-Check-Act Model), ex Six-Sigma, Lean
end-to-end processes (more radical approaches), ex Business Process Re-engineering (BPR)
evidence-based problem-solving, ex. Six-Sigma, Total Quality Management (TQM)
Customer centricity (iterative, customer involvement approach), ex Business Design Thinking

Answer 645

A

Total Quality Management (TQM)

Total quality management - consists of organization-wide efforts to “install and make permanent climate where employees continuously improve their ability to provide on demand products and services that customers will find of particular value.”

Very spread certification proving that the company is efficient in its ops optimization

Answer 646

A

Plan-Do-Check-Act - the original idea of quality management

Newer version Define-Measure-Analyse-Improve-Control - an improved version (used by Six Sigma)

Answer 647

A

quick and simple method of identifying whether there is evidence of a connection between two sets of data

May show a correlation (relationship between things, but not necessarily a cause

Answer 648

A

aka Fishbone Diagram

Answer 649

A

standard signaling the readiness of the company to contimnuously improve its ops, shows quality of the product
sets out criteria for a quality system; based on 7 quality management principles:
1) strong customer focus
2) motivation and implication of top management (aka leadership)
3) process approach
4) continuous improvement
5) evidence-based decision making
6) & 7) etc

Answer 650

A

consistent conformance to customers’ expectations

Quality vs Quality of Service vs Quality of Experience:

Quality is offering-focused
Quality of Service is provider-centric
Quality of Experience is user-centric

Answer 651

A

Inspection first, then Quality Control (quality standards), then Quality Assurance (how much everything costs, quality planning), finally Total Quality Management (TQM; by involving customer supplier, see quality as a strategic asset).

Answer 652

A

reducing consequences
recovering afterwards
predicting
stopping and preventing

Kinds of risks:

strategic (someone at the top made a wrong call)
Financial
Operational

Answer 653

A

human failure
supply
organisational
technology / equipment
product or service desing
customer failure

Answer 654

A

establishing redundancies (having fall-back options)
fail-safering (mainly in constructions)
higher emphasis on maintenance

Answer 655

A

hot standby (all backup systems run at the same time as the main system; used in air traffic, hospitals)
warm standby (secondary systems run in the background and data exchange happens on regular basis; ex. tech)
cold standby (secondary system is only used when the main system fails; power generators for non-crucial support systems)

Answer 656

A

= inadvertent error prevention

examples of fail-safeing:

checklists
paper strips places around clean towels in hotels
height bars on amusement rides to ensure that customers do not exceed size limitations

Answer 657

A

context
input
effort

Answer 658

A

strategy
infrastructure
communication

Answer 659

A

measurements (on quality, speed, dependability, flexibility and cost levels)
target
benchmarking

Answer 660

A

Planning - formalization of what is intended to happen at some point in the future; long-term
Control - the process of coping with the changes; short-term

What are Planning and Control activities?

Loading - How much to do?
Monitoring & Contol - Are activities going to plan?
Sequencing - In what order to do things?
Scheduling - When to do things?

Answer 661

A

Long:
- aggregated demand forecast

Medium:
- partially disaggregated demand forecast

Short (1y):
- uses totally disaggregated (detailed) demand forecast or actual demand

Answer 662

A

Planning is decided based on Volume and Variety criterias

Operations which produce a high variety of services or products in relatively low volume will have customers with different requirements
They use different processes from operations which create standardized services or products in high volume

Answer 663

A

Uncertainty in supply and demand OR dependent and independent demand have a direct impact on Planning

Planning & Control systems should be able to cope with uncertainty and dependability of demand.

Answer 664

A

P:D ratios - ratio of “demand”, aka D, time (i.e., the time a customer must wait between asking for a product and receiving it) to the whole operation production cycle, P
Sales and Operations Planning (S&OP) - a planning process that attempts to ensure that all tactical plans are aligned across the business’s various functions and with the company’s longer-term strategic plans.

Answer 665

A

How much to do?
Loading is the amount of work that is allocated to a work center.

Can be:

finite only allocates work to a work center up to a set limit; This limit is the estimate of capacity for the work center. Work over and above this capacity is not accepted.
infinite (ex. consultancy) - approach to loading work which does not limit accepting work, but instead tries to cope with it

Takes into account:
• Breakdowns
• Idle or waiting time
• Set-up changes
• Maintenance
• Weekends and statutory holidays

Answer 666

A

In what order to do things?

When work arrives, decisions must be taken on the order in which the work will be tackled.

Often a predefined set of rules, ex:

physical constraints
customer priority
due date
etc

Well-known sequencing techniques:

Last In, First Out (LIFO)
First In, First Out (FIFO)
Longest operation time (LOT)
Shortest operation time (SOT)

Objectives, ex:

dependability
speed
costs

Answer 667

A

When to start with the whole thing?
- some operations require a detailed timetable showing at what time or date jobs should start and when they should end

Approaches to scheduling:
• Forward scheduling: starting work as soon as it arrives.
• Backward scheduling: starting jobs at the last possible moment to prevent them from being late.

The question is where do you want to have a pileup of work. Where it is cheapest.

Adv of Forward-Scheduling:

high labor utilization
flexible

Adv of Backward-Scheduling:

lower material costs
less exposed of risk of schedule changing
focuses on due dates

Answer 668

A

Push system of control is where items are moved onto the next stage as soon as they have been processed (conveier)

Pull system - when items are moved only when the next stage wants them

Answer 669

A

when the activity is not repetitive control can be delegated to an expert

Answer 670

A

when intervention effects are unknown, repetitive activity

often used in startups

knowledge gain for control through failures

Answer 671

A

when intervention effects are unknown, activities are not repetitive

control must be based on the management team using its intuition to make control decisions

Answer 672

A

when strategic objectives are ambiguous (= having a double meaning)

when external consultants or/and experts are brought up

Answer 673

A

consists of Supply Side and Demand Side

The aim is to understand the consequences of different capacity management decisions; i.e. supply vs demand

Answer 674

A

Qualitative Approaches

Quantitative Approaches

Answer 675

A

Panel Approach - panel focus group comes up with the solution
Delphi Method - survey of experts where replies are analyzed
Scenario Planning - avoid scenarios that are least desired

Answer 676

A

Time series analysis
Moving average forecast
Exponential smoothing

Answer 677

A

Designed Capacity - system design

Effective Capacity = Designed Capacity - Planned Loss

Actual Output = Effective Capacity - Unplanned Loss

Answer 678

A

OEE = APQ
aka Overall Equipment Effectiveness (OEE) = Availability x Performance x Quality

(Availability of Process)* (Performance/Speed of Process)* (Quality of Products/Services of the Process)

Answer 679

A

The learning from managing capacity should be captured and used to refine both demand forecasting and capacity planning.

The balance between short-term outlook for volume and long-term.

Answer 680

A

the information processing, decision support and execution mechanisms that support the operations planning and control activity; the public face of the operation (visibility).

System consists of:

customer facing
input: planning and control decisions
transformation: managing customer expectations (ex delivery, feedback, etc)
output: customers’ satisfaction
supplier facing
input: suppliers
transformation: managing suppliers expectations
output: planning and control decisions

has supply interface (suppliers planning and control) and demand interface (customers)

ex. ASP

The customer interface defines customer experience

Answer 681

A

different kinds of decisions at different levels in the organization and over different time periods

Strategic objective (business) all the way through Tactical and Operational to Execution plans.

Answer 682

A

these systems automate and integrate core business processes such as customer demand, scheduling operations, ordering items, keeping inventory records and updating financial data

They help companies ‘forward plan’ these types of decisions and understand all the implications of any changes to the plan.

ERP typically contained of:
Supply side: ops applications, purchasing and supply apps
Customer side: marketing apps, delivery & logistics, service
Internal side: HR, strategic reporting, finance

Answer 683

A

speaks for hierarchies

Benefits:

communicates across all functions
process-based changes
better sense of control
sophisticated comms with customer

Problems:
The costs of implementing are ridiculous. Also requires expertise, may need changes to the current ops, complicated systems.

Answer 684

A

Sales -

Getting people to exchange their cash for your offering

Answer 685

A

Satisfying the needs of customers, by a means of a product or service

Answer 686

A

Market Segment -
a group of present or potential customers with some common characteristic which is relevant in explaining (and predicting) their response to supplier’s marketing stimuli

Segmentations: one-to-one marketing vs mass-market
Aggregating prospective buyers into groups, or segments, that
(1) have common needs and (2)will respond similarly to a marketing action.
Approaches to segmentation:
1. Start with customer group identifiers. Characteristics of organizations or people
2. Start with customer response profile
• Use situation
• Buyers’ needs and preferences
• Purchase behavior and loyalty

Why is market segmentation so important?

Segmentation helps marketers to be more efficient in terms of time, money and other resources.
Market segmentation allows companies to learn about their customers.
They gain a better understanding of customer’s needs and wants and therefore can tailor campaigns to customer segments most likely to purchase products.

Answer 687

A

is the ability of a company to meet each customer’s requirements – to prepare on a mass basis individually designed products, services, programs and communications

Answer 688

A

Individual customer
Customer profile
Customized market offering
Customized production
Economies of scope
Share of customer

Answer 689

A

Average customer
Customer anonymity
Standard product
Mass production, distribution, advertising
One-way message
Economies of scale

Answer 690

A

Economies of scale are cost advantages reaped by companies when production becomes efficient

Answer 691

A

means that the production of one good reduces the cost of producing another related good.

Answer 692

A

Evaluate attractiveness of each segment

- Select the target segments

Answer 693

A

Identify possible positioning concepts for each target segment
Select, develop, and communicate the chosen positioning concept

Answer 694

A

Geographic
• Region, City or Metro Size, Density, Climate, Demographic
• Age, Gender, Family Size and Life Cycle, Race, Occupation,Income, Psychographic
• Lifestyle or Personality, Behavioral
• Benefits, Usage Situations

Answer 695

A

MARKETS SETTLING DOWN
STABLE SITUATION
MARKET SOPHISTICATION

Answer 696

A

characteristics of the buying organization and the buying situation (size, geographic location, category, organizational structure).

Answer 697

A

– characteristics of the decision- making units within each macro segment (decision criteria, perceived importance of the purchased, attitudes towards vendors).

Answer 698

A

Innovative solutions
Proven solutions
Cost-effective solutions
Price seeker

Answer 699

A

Groups or “clusters” respondents together based on how similar their responses were.
• It considers similiarities in response profiles across all questions (not focusing merely on individual questions)
• Does not presume any particular number of clusters.Data guides # of clusters.
• Does not consider any information beyond data provided by questions (for example demographics is not considered)

Answer 700

A

Measurability – can we measure the buyer characteristics
Accessibility – can we reach those buyers
Substantiality – is this segment large or profitable enough
Compatibility – are our business strengths useful in this market
Responsiveness – to which degree this is this segment respond differently to marketing mix

Answer 701

A

Undifferentiated (mass) marketing
Differentiated (segmented) marketing
Concentrated (niche) marketing
Micromarketings (local or individual marketing)

Answer 702

A

Targets one or a couple small segments

- Niches have very specialized interests

Answer 703

A

Tailoring products and marketing programs to suit the tastes of specific individuals and/or locations.

Answer 704

A

Single-segment Concentration
Selective Specialization
Product Specialization
Market Specialization
Full Market Coverage

Answer 705

A

The place a product occupies in consumers’ minds relative to competing products.

Positioning Strategy:
- Advantages
- Points of Parity
- Points of Difference => Differentiation
Positioning results from differentiation and competitive advantages.
Positioning may change over time.

Answer 706

A

Product Design
Quality
Additional Services
Image
People (Staff)
Price
Other

Answer 707

A

Important
Distinctive
Superior
Communicable
Pre-emptive (= proactive)
Affordable (to company and consumer)
Profitable

Answer 708

A

Brands view prototypical brands as the best examples of a product category

ex. Duracell for batteries

Answer 709

A

Value themselves as individuals than as a part of a group (Western Cultures) vs emphasize connections to others rather than their own individuality (Eastern Cultures).

Answer 710

A

Value equality vs more emphasis on hierarchy.

• Important to marketeers of status-symbol products that will appeal to consumers influence by vertical orientation

Answer 711

A

Learning how to adapt to a new culture

Answer 712

A

Strategies used to appeal to a variety of cultures at the same time.

Answer 713

A

How strongly people identify with their ethnic group.

Answer 714

A

To build memory structures that enable purchasing with low levels of conscious processing

Answer 715

A

To achieve a goal (marketing) the company must:

choose which activities to perform differently than competitors
choose which activities not to perform
integrate activities, so they support each other

Answer 716

A

is a guiding theme that provides coherence and focus to the actions and decisions of an individual or an org

Answer 717

A

how a strategic business unit creates value for its users which is both greater than the costs of supplying them and superior to that of rivals

Answer 718

A

requires becoming the lowest-cost org in a domain of activity

production costs must be the lowest
quality must be acceptable

Answer 719

A

(NX) is the difference between the monetary value of a nation’s exports and imports over a certain time

Answer 720

A

includes depth (dishwashing capsules, service, etc) and breadth (dishwashers for restaurants, hotels, schools, etc)

Answer 721

A

High market risk (focused strategy of the hidden champions) and high competitive risk (typical for large companies)

Answer 722

A

shows the relationship of percieved price and percieved benefits of product of service

Answer 723

A

No frills strategy or no frills service or product is one for which the non-essential features have been removed to keep the price low.

ex. LIDL, Maxima

Answer 724

A

The Hybrid position sits between low price and differentiation. It’s around ensuring the price is competitive, ideally with a low perceived price from buyers, while promoting the added value aspects of the product

ex. IKEA

Answer 725

A

Directions of value creation:

Operational excellence: to be a leader in price or convenience
Product leadership: offers most advanced products or services
Customer intimacy: deep understanding of individual customer needs and ability to customize for them

Answer 726

A

A. real value innovations

B. tranditional ways

Answer 727

A

seeking to make comeptition irrelevant
finding fundamentally new market space
creating new products or servides for which there are no direct competition

Value innovations bring higher profits and revenues

Answer 728

A

head - to head competition to beat rivals

- largerly based on incremental improvements in cost, quality or both

Answer 729

A

tells what to Eliminate, Raise, Reduce, and Create

Answer 730

A

is a process that converts innovation into value; flows of information and resources; a summation of core business decisions and trade-offs employed by a company to earn a profit

Answer 731

A

WHO is you customer (markets, segments, individuals)
WHAT do you offer to your customers (products, services, solutions, experiences)
HOW do you do this (create value, deliver value, capture value)

Answer 732

A

Operational effectiveness:

infrastructure (key partners, key activities, key resources)
offers (value proposition)
clients (customer relationships, segments, chains)
finances (cost structure, revenue streams)

Answer 733

A

such platforms are of value to one group of customers only if the other groups of customer are also present

Answer 734

A

Red (Impulsive) - based on fear
Amber (Conformist) - based on formal roles & complex processes (bear, army)
Orange (Achiever) - most popular, people are pieces of machinery; profit is the most important factor for decisions; all good as long as it is legal
Green (pluralistic) - based on empowering people, values - driven culture.
Teal (evolutionary) - based on trust to make decisions & self-manage.

Majority of org’s move between Orange and Green.

Answer 735

A

Managerial accounting:

provides economic and financial information (internal reports) for managers and other internal users; reports are provided in any format at any time when a decision needs to be made; and not audited externally

Answer 736

A

for external users, quarterly or annually; general-purpose; audited

Answer 737

A

Planning - maximizing short-term market share
Directing - coordinate diverse activities and human resources, implement objectives
Controlling - keeping activities on track, determine whenter goals are met

Answer 738

A

False.

Managerial accountants determine product costs. In addition, managerial accountants are now held responsible for evaluating how well the company is employ- ing its resources. As a result, when the company makes critical strategic decisions, managerial accountants serve as team members alongside personnel from production, marketing, and engineering.

Answer 739

A

F, this if financial manager

Answer 740

A

F, not audited

Answer 741

A

Manufacturing Costs -
- costs that are an integral part of producing the product

Manufacturing consists of activities and processes that convert raw materials into finished goods.

Consists of:

Direct materials
Direct labor
Manufacturing overhead

Recorded in “inventory” account.
Not an expense (COGS) until the goods are sold.

Answer 742

A

Raw materials - arts used in manufacturing
Direct materials - raw materials that can be physically and directly associated with the finished product during the manufacturing process

Answer 743

A

Not physically part of the finished product or they are an impractival to trace to the finished product because their physical association with the finished product is too small in terms of cost.

Answer 744

A

Work of factory employees that can be physically and directly associated with converting raw materials into finished goods.

Answer 745

A

Work of factory employees that has no physical association with the finished product or for which it is impractical to trace costs to the goods produced.

Answer 746

A

Costs that are indirectly associated with manufacturing the finished product.
Includes all manufacturing costs except direct materials and direct labor.
Also called factory overhead, indirect manufacturing costs, or burden.

Answer 747

A

Charged to expense as incurred.
Non-manufacturing costs.
Includes all selling and administrative expenses.

Answer 748

A

COGS = Beginning Inventory + Cost of Goods (Purchased/Manufactured) - Ending Inventory

Answer 749

A

Closing Balance = Opening Balance + Additions - Used

Answer 750

A

sum of direct material costs, direct labor costs, and manufacturing overhead in the current year.

Answer 751

A

(1) cost of beginning work in process and
(2) total manufacturing costs for the current period.

Total Cost of WIP = Beginning WIP Inventory + Total Manufacturing Costs

Answer 752

A

Cost of Goods Manufactured = Total Cost of WIP - Ending WIP Inventory

Answer 753

A

Inventory accounts for a manufacturer:

raw materials
WIP inventory
finished Goods inventory

Answer 754

A

Inventory system in which goods are manufactured or purchased just in time for sale.

Answer 755

A

Reduce defects in finished products, with the goal of zero defects.

Answer 756

A

Constraints (“bottlenecks” ) limit the company’s potential profitability.
A specific approach to identify and manage these constraints in order to achieve company goals.

Answer 757

A

Allocates overhead based on use of activities.

Results in more accurate product costing and scrutiny of all activities in the value chain.

Answer 758

A

What cash i have available when my obligations are due; measures short-term ability of the company to pay its maturing obligations and to meet unexpected needs for cash.

Answer 759

A

No, Only assets that you can control are shown in Balance Sheet. Today knowledge is employed at your company, tomrorow- at your competitors’.

Answer 760

A

Ratios (characteristics): liquidity, profitability, solvency
Comparison Bases: industry avg
Tools of analysis: horizontal & vertical

Answer 761

A

technique for evaluating a series of financial statement data over a period of time; purpose: to determine the increase/decrease

Commonly applied to: balance sheet, income statement, statement of retained earnings

Answer 762

A

technique that expresses each financial statement item as a percent of a base amount.

Commonly applied to: balance sheet, income statement

Answer 763

A

Measures the ability of the company to survive over a long period of time.

Answer 764

A

Measures the income or operating success of a company for a given period of time.

Answer 765

A

is the most likely level of income to be obtained by a company in the future. It differs from actual net income by the amount of unusual revenues, expenses, gains, and losses included in the current year’s income.

Answer 766

A

Overhead, management pay, etc

Answer 767

A

“Contribution” represents the portion of sales revenue that is not consumed by variable costs and so contributes to the coverage of fixed costs.

Contribution Margin = Sales - Fixed Costs

Answer 768

A

Which of the following costs would be a fixed cost for Shaun, a knitwear manufacturer?

D. Factory rent

Answer 769

A

The break-even point is where total revenue equals total fixed costs plus variable costs.

Answer 770

A

Which of the following definitions of break-even point is correct?

A. The break-even point is where total revenue equals total fixed costs plus variable costs.

Answer 771

A

Which of the following most accurately describes a fixed cost?

A. A fixed cost remains the same, regardless of the level of output.

Answer 772

A

Which of the following is an advantage of using the payback period?

B. It is useful measure of the speed with which a project will pay back its initial costs.

Answer 773

A

Which of the following statements concerning the IRR is true?

B. The IRR is the discount rate that, when applied to a project’s cash flows, gives an NPV of zero.

Answer 774

A

What does the accounting rate of return measure?

D. The average annual expected profit expressed as a percentage of the average funds invested in it.

Answer 775

A

Which of these are all relevant costs?

C. Cash, future, incremental

Answer 776

A

An opportunity cost is the value of the benefit sacrificed in favour of an alternative course of action.

Answer 777

A

Which definition best describes an opportunity cost?

D. The value of the benefit sacrificed in favour of an alternative course of action

Answer 778

A

No

Both the sunk and committed costs are not relevant.

Answer 779

A

A bus company is offering cheap fares for special excursions. It has advertised its trips in newspapers and has already paid a quarter of the advertising fee, and has agreed to pay the final installment soon. Which of the following statements is correct?

B. None of the advertising costs are relevant

Answer 780

A

Managerial accounting information is generally prepared for

A. managers

Answer 781

A

The major reporting standard for presenting managerial accounting information is:

C. relevance

Answer 782

A

Managerial accounting does not encompass

D. calculating earnings per share

Answer 783

A

Which of the following statements about internal reports is not true?

B. Most internal reports are summarized rather than detailed

Answer 784

A

Financial statements for external users can be described as

D. general-purpose

Answer 785

A

A function that indicates the maximum output per unit of time that a firm can produce, for every combination of inputs with a given technology, is called

B. A production function

Answer 786

A

Which of the following inputs are variable in the long run?

C. All of these

Answer 787

A

The short run is:

C. A time period in which at least one input is fixed

Answer 788

A

Anna owns a small bakery, and her production function is q=3KL where q is the total output in cakes per hour, K is the number of ovens (capital), and L is the number of employees hired per hour (labor). If Anna’s capital is currently fixed at K=3 ovens, what is her short-run production function?

A. q= 9L

Answer 789

A

According to the law of diminishing returns:

C. The marginal product of an input will eventually decline

Answer 790

A

In order for a taxicab to be operated in New York City, it must have a medallion on its hood. Medallions are expensive, but can be resold, and are therefore an example of:

A. A fixed cost

Answer 791

A

Which of the following costs always declines as output increases?

D. Average fixed cost

Answer 792

A

The total cost (TC) of producing computer software diskettes (Q) is given as TC= 200 + 5Q. What is the average total cost?

A. 5+(200/Q)

Formulas:
TC = FC + VC
TC = 200 + 5Q

ATC = FC/Q + VC/Q
ATC = FC/Q = 200/Q + 5

Answer 793

A

Anna knows the average total cost and average variable cost for a given number of cakes. Which of the following costs can she not determine given this information?

D. Anna can determine all of the above costs with the information provided

Answer 794

A

We typically think of labor as a variable cost, even in the very short run. However, some labor costs may be fixed. Which of the following items represents an example of a fixed labor cost?

D. A salaried manager who has a three-year employment contract

Answer 795

A

A price taker is:

D. A firm that cannot influence the market price

Answer 796

A

A firm maximizes profit by operating at the level of output where

E. Marginal revenue equals marginal cost

Answer 797

A

The demand curve facing a perfectly competitive firm is:

A. Perfectly horizontal

Answer 798

A

The supply curve for a competitive firm is

D. Its MC curve above the minimum point of the AVC curve

Answer 799

A

Which of the following is NOT true regarding monopoly?

B. Monopolist can charge as high a price as it likes

Answer 800

A

Compared to the equilibrium price and quantity sold in a competitive market, a monopolist will charge a ________________ price and sell a ______________ quantity.

D. Higher, smaller

Answer 801

A

As the manager of a firm you calculate the marginal revenue is $152 and marginal cost is $200. You should

C. Reduce output until marginal revenue equals marginal cost

Answer 802

A

For a monopolist, changes in demand will lead to changes in

B. Both price and quantity

Answer 803

A

The____________elastic a firm’s demand curve, the greater its______________.

D. Less, monopoly power

Answer 804

A

Which of the following is NOT a determinant of the demand for good X?

A. The cost of labor used to produce good X

Answer 805

A

Which of the following IS a determinant of the demand for good X?

B. The income of consumers who buy good X

Answer 806

A

If cookies are a normal good and incomes increase, we would expect:

D. An increase in equilibrium price and equilibrium quantity

Answer 807

A

Simon is selling his used truck. The minimum amount he needs to be paid for the truck is $5,000. He advertises the truck online for $8,000, and eventually sells the truck for $6,000. His producer surplus is equal to________

A. $1,000

Answer 808

A

A decrease in supply is, graphically, represented by:

A. A leftward shift in the supply curve

Answer 809

A

In recent years there have been a couple of high profile cases of contamination of baby formula produced in China. As a result, many Chinese parents buy baby formula that is produced outside China. Which of the following accurately describes the likely effect of this on baby formula prices?

B. An increase in the price of baby formula produced in China and a decrease in the price of baby formula produced outside China

Answer 810

A

If pizza is a normal good, then which of the following could be the value of income elasticity of demand?

B. All of the above

Answer 811

A

Which of the following statements about the relationship between the price elasticity of demand and revenue is TRUE?

C. If demand is price elastic, then decreasing price will increase revenue

Answer 812

A

Suppose Tallink Ferries is considering an increase in ferry fares. If doing so results in an increase in revenues raised, which of the following could be the value of the own-price elasticity of demand for ferry rides?

D. 0,5

Answer 813

A

An implicit cost is any cost that has already occurred but not necessarily shown or reported as a separate expense. It represents an opportunity cost that arises when a company uses internal resources toward a project without any explicit compensation for the utilization of resources

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