| Investing $2,000,000 in TQM's Channel Support Systems initiative will at a minimum increase demand for your products 1.7% in this and in all future rounds. (Refer to the TQM Initiative worksheet in the CompXM.xls Decisions menu.) Looking at the Round 0 Inquirer for Andrews, last year's sales were $163,608,638. Assuming similar sales next year, the 1.7% increase in demand will provide $2,781,347 of additional revenue. With the overall contribution margin of 34.2%, after direct costs this revenue will add $951,221 to the bottom line. For simplicity, assume that the demand increase and margins will remain at last year's levels. How long will it take to achieve payback on the initial $2,000,000 TQM investment, rounded to the nearest month? |
| | TQM investment will not have a significant financial impact | | | 25 months | | | 9 months | | | 17 months 2. | Select all of the following statements that are true four years from now, in the year 2018. | | Select: 2 | | | The Elite segment will demand 5,878 thousand units | | | The Nano segment will demand 5,411 thousand units | | | The Core segment will demand 9,785 thousand units | | | The Thrift segment will demand 7,751 thousand units 3. | Looking forward to next year, if Digbys current cash amount is $17,478 (000) and cash flows from operations next period are unchanged from this period and Digby takes ONLY the following actions relating to cash flows from investing and financing activities: Issues $2,000 (000) of long-term debt Pays $4,000 (000) in dividends Retires $10,000 (000) in debt Which of the following activities will expose Digby to the most risk of needing an emergency loan? | | Select: 1 | | | Repurchases $10,000 (000) of stock | | | Issues 100 (000) shares of common stock | | | Sells $7,000 (000) of long-term assets | | | Purchases assets at a cost of $15,000 (000) 4. | Assuming Digbys current market share for its Dixie product remains the same, how many units of Dixie should Digby expect to sell in the primary segment for the upcoming year? | | Select: 1 | | | 308 units | | | 401 units | | | 441 units | | | 297 units 5. | Coat's product manager continues to perform well in the market. However, a competing product is coming on strong and is looking to take over as the market share leader in the segment. Without sacrificing contribution margin, what can the Coat product manager do in order to improve upon the buying criteria, and thus potentially increase demand? | | Select: 1 | | | Reposition Coat to make it even smaller and higher performing | | | Increase the promotion budget to gain greater awareness | | | Increase MTBF by 2000 | | | Lower the selling price since it is the second most important buying criteria 6. | In three years, assuming the competitive environment remains unchanged, how many units of Coat will Chester be selling in the Nano market segment? | | Select: 1 | | | 687 | | | 764 | | | 603 | | | 464 7. | Assuming no direct factory overhead costs (i.e., inventory carry costs) and $3 million dollars in combined promotion and sales budget, the Cure product manager wishes to achieve a product contribution margin of 35%. Given their product currently is priced at $35.00, what would they need to limit the material and labor costs to? | | Select: 1 | | | $22.75 | | | $21.00 | | | $24.50 | | | $23.00 8. | Which description best fits Andrews? For clarity: - A differentiator competes through good designs, high awareness, and easy accessibility. - A cost leader competes on price by reducing costs and passing the savings to customers. - A broad player competes in all parts of the market. - A niche player competes in selected parts of the market. Which of these four statements best describes your company's current strategy? | | Select: 1 | | | Andrews is a broad cost leader | | | Andrews is a broad differentiator | | | Andrews is a niche differentiator | | | Andrews is a niche cost leader 9. | Refer to the HR Reports in the Inquirer. Through past investments in recruiting and training Baldwin has obtained a productivity index of 109.6%. This means that Baldwin's labor costs would be increased by 9.6% if it did not have these productivity improvements. This is a competitive advantage that Baldwin can sustain or even widen further if its competitors have no HR initiatives. Now, refer to the Income Statement in Baldwin's Annual Report. How much did Baldwin's productivity improvements save it in direct labor costs (in thousands) last year? | | Select: 1 | | | $29,818 | | | $766 | | | $3,137 | | | $3,211 10. | Digby's Elite product Dixie has an awareness of 72%. Digby's Dixie product manager for the Elite segment is determined to have more awareness for Dixie than Andrews' Elite product Agape. She knows that the first $1M in promotion generates 22% new awareness, the second million adds 23% more and the third million adds another 5%. She also knows one-third of Dixie's existing awareness is lost every year. Assuming that Agape's awareness stays the same next year (77%), out of the promotion budgets below, what is the minimum Digby's Elite product manager should spend in promotion to earn more awareness than Andrews' Agape product? | | Select: 1 | | | | | | | | | | | | | | | | | | | | |
