MULTIPLE CHOICE:

1. Using the balanced scorecard approach, an organization evaluates managerial performance based on:

a. A single ultimate measure of operating results, such as residual income.

b. Multiple financial and non-financial measures.

c. Multiple non-financial measures only.

d. Multiple financial measures only.

2. A strategy map in the balanced scorecard framework is

a. A statement of what the strategy must achieve and what is critical to its success.

b. Key action programs required to achieve strategic objectives.

c. Diagrams of the cause-and-effect relationships between strategic objectives.

d. The level of performance or rate of improvement needed in the performance measure.

3. What is the most important purpose of a balanced scorecard?

a. Develop strategy.

b. Measure performance.

c. Develop cause-and-effect linkages.

d. Set priorities.

4. Which of the following is not one of the four perspectives of the balanced scorecard?

a. Investment in resources perspective.

b. Customer perspective.

c. Learning and growth perspective.

d. Financial perspective.

5. The balanced scorecard generally uses performance measures with four different perspectives. Which of the following performance measures would be part of those used for the internal business processes perspective?

a. Cycle time.

b. Employee satisfaction.

c. Hours of training per employee.

d. Customer retention.

6. Probability of the simultaneous occurrence of two mutually exclusive events is

a. The probability that two or more events will occur.

b. The probability that once will occur given that the other has occurred.

c. The probability that two independent events will occur.

d. Zero.

7. A firm must decide whether to introduce a new product A or B. There is no time to obtain experimental information; a decision has to be made now. Expected sales can be classified as weak, moderate, or strong. How many different payoffs are possible in a decision tree under these circumstances?

a. 2

b. 3

c. 5

d. 6

8. The constraints in a linear programming model are

a. Included in the objective function.

b. Cost.

c. Scarce resources.

d. Depended variables.

9. The two inequality functions are

a. Contributions.

b. Shadow points.

c. Objectives.

d. Constraints.

10. A bank is designing an on-the-job training program for its branch managers. The bank would like to design the program so that participants can complete it as quickly as possible. The training program requires that certain activities be completed before others. For example, a participant cannot make credit loan decisions without first having obtained experience in the loan department. An appropriate scheduling technique for this training program is

a. PERT/CPM.

b. Linear programming.

c. Queuing theory.

d. Sensitivity analysis.

11. PERT and the critical path method (CPM) are used for

a. Determining the optimal product mix.

b. Project planning and control.

c. Determining product costs.

d. Determining the number of servers needed in a fast food restaurant.

12. To assist in an investment decision, Greedy Co., selected the most likely sales volume from several possible outcomes. Which of the following attributes would that selected sales volume reflect?

a. The midpoint of the range

b. The median

c. The greatest probability

d. The expected value

13. A quantitative technique useful in projecting a firm's sales and profits is

a. Probability distribution theory.

b. Linear programming.

c. Gantt charting.

d. Learning curves.

14. Corrupt Company is preparing its 2020 budget and, taking into consideration the recent pace of economic recovery, has developed several sales forecast and the estimated probability associated with each sales forecast. To determine the sales forecast to be used for 2020, budgeting purposes, which of the following purposes should Corrupt Company use?

a. Expected value analysis

b. Continuous probability simulation

c. Monte Carlo simulation

d. Sensitivity analysis

15. The Booster Club at Blair College sells hotdogs at home basketball games. The group has a frequency distribution of the demand for hotdogs per game and plans to apply the expected value decision rule to determine the number of hotdogs to stock. The Booster Club should select the demand level that*

a. Is closest to the expected demand.

b. Has the greatest probability of occurring.

c. Has the greatest expected opportunity cost.

d. Has the greatest expected monetary value.

16. Management of a company has asked the internal auditing department to assist in determining whether a new automated system should be implemented and whether the supporting software should be developed in-house, purchased, or leased. This will require evaluating a sequence of alternatives, each of which will result in different outcomes. The most effective tool the company can use to evaluate these choices would be

a. PERT/CPM

b. Payoff tables

c. Queuing theory

d. Decision tree

17. Which one of the following statements does not apply to decision tree analysis?

a. The sum of the probabilities of the events is less than one.

b. All of the events are mutually exclusive.

c. All of the events are included in the decision.

d. The branches emanate from a node from left to right.

18. Linear programming is an operations research technique that allocates resources. Mathematical expressions are used to describe the problem. The measure of effectiveness that is to be maximized or minimized is the

a. Constraints.

b. Set of decision variables.

c. Objective function.

d. derivative of function.

19. In the Program Evaluation Review Technique (PERT), slack is the

a. Uncertainty associated with time estimates.

b. Path that has the largest amount of time associated with it.

c. Excess time available in the completion of the project after chasing the critical path.

d. Number of days an activity can be delayed without forcing a delay for the entire project.

20. A company has developed a learning (improvement) curve for one of its newer processes from its accounting and production records. Management asked internal audit to review the curve. Which of the following events tend to mitigate the effects of the learning curve?

a. Labor costs incurred for overtime hours were charged to an overhead account.

b. The number of pre-assembled purchased parts used exceeded the plan.

c. Newly developed processing equipment with improved operating characteristics was used.

d. All of the answers are correct.