Question

1. A company cannot effectively differentiate its branded footwear from the brands of rivals by providing free shipping to all buyers at the company’s websites.

A. signing enough celebrities to endorsement contracts to earn higher celebrity appeal ratings in the

various geographic regions than most all other rivals.

B. producing and marketing branded footwear with a higher 3/0 rating than the branded footwear of most all other rivals.

C. offering a wider variety of modelsIstyles than most all rivals.

D. spending more money on corporate social responsibility and citizenship activities than most all other

rivals.

Answer: spending more money on corporate social responsibility and citizenship activities than most all other rivals.

2.Which one of the following is a way to improve the S rating of branded pairs produced at a particular plant?

A. Increasing expenditures for enhanced styling/features

B. Increasing efforts to reduce reject rates at the plant

C. Increasing the piecework incentive for plant workers

D. Avoiding bidding for contracts to supply private-label footwear to chain retailers, which damages the

company’s image as a producer of top quality footwear

E. Making efforts to maximize the use of overtime at the plant and thereby increase worker satisfaction

with their take-home pay

Answer:Increasing expenditures for enhanced styling/features

3.Which one of the following actions does NOT result in higher levels of labor productivity in producing footwear?

A. Increases in worker base pay of 2% or more

B. Spending for best practices training for plant workers

C. Increasing the percentage of total compensation that comes from piecework incentives (up to a

maximum of 50%)

D. Reductions in the number of models produced at a plant

E. Actions to avoid use of overtime production

Answer: Actions to avoid use of overtime production

4.Which one of the following is a way to reduce costs and strive to achieve a competitive advantage based on lower overall costs per pair sold than rival companies?

A. Being careful to keep spending for retailer support to amounts that are below the industry average in that region

B. Offering buyers a wide selection of modelsIstyles (at least 350 models styles in each geographic region)

C. Employing a strategy to be the market share leader in supplying private-label footwear to chain retailers

D. Avoiding bidding for celebrities–winning a celebrity contract almost always costs more than the

celebrity’s endorsement is worth

E. Pursuing strategic actions that enable the company to profitably operate its plants close to full production capacity (including overtime) each year and avoid getting stuck with many pairs of unsold inventory

Answer: Pursuing strategic actions that enable the company to profitably operate its plants close to full production capacity (including overtime) each year and avoid getting stuck with many pairs of unsold inventory

5. it makes more economic sense for a company to invest $3.5 million per million pairs of capacity for a plant facilities upgrade that will boost labor productivity by 25%

A. at large plants than at small plants.

B. when the company is striving to gain a differentiation-based competitive advantage than when the company is striving to gain a low-cost competitive advantage.

C. at whichever company plant has the lowest level of labor productivity.

D. at whichever company plant has the lowest level of total annual compensation per employee.

E. at a plant where total annual compensation per employees is currently $18,000 and labor productivity is about 3,000 pairs per worker as compared to a plant where total annual compensation per employee is currently $4,000 per year and labor productivity is also 3,000 pairs per worker.

Answer: at a plant where total annual compensation per employees is currently $18,000 and labor productivity is about 3,000 pairs per worker as compared to a plant where total annual compensation per employee is currently $4,000 per year and labor productivity is also 3,000 pairs per worker.

6. Which of the following sets of actions are unlikely to help a company achieve a differentiation-based competitive advantage over some/many of its rivals?

A. Actions to achieve a celebrity appeal rating of 200 or higher in all four geographic regions, spending above-average amounts on TQMISix Sigma programs in all of the company’s plants, and offering a rebate of $8 or more in all four geographic regions

B. Spending the highest amount for advertising of any company in the industry in all four geographic regions, producing branded footwear with an SIQ rating of 8-stars at all of the company’s plants, and delivering orders to branded footwear retailers in 2 weeks or less

C. Delivering orders to branded footwear retailers in one week in all four geographic regions, spending the highest amount for retailer support of any company in the industry in all four geographic regions, and offering 500 models/styles to buyers in each geographic region

D. Actions to achieve an SIQ rating of 7-stars or higher in all four geographic regions, actions to spend above-average amounts for advertising in all four geographic regions, and actions to offer a minimum of 350 models/styles in all four geographic regions

E. Actions to reduce reject rates at its plants, building plant capacity in all four geographic regions, and actions to price its branded footwear below the industry average in all four geographic regions

Answer: Actions to reduce reject rates at its plants, building plant capacity in all four geographic regions, and actions to price its branded footwear below the industry average in all four geographic regions

7. While contracting with celebrities to endorse a company’s brand adds to the competitive power of its product offering vis-a-vis the offerings of rivals, one of the big risks in deciding how much a company can afford to bid for an upcoming celebrity is

A. overestimating how much the company will be able to raise the prices it charges for branded footwear (should it be the winning bidder)

B. misjudging whether the company will have adequate cash flows to pay the contracted amount to the celebrity and unnecessarily cutting dividend payments to shareholders to generate added cash to cover the required contract payments

C. overestimating the size of the gains in branded sales volume and revenue that the company is likely to realize should it be the winning bidder and, therefore, bidding more than the celebrity’s endorsement turns out to be worth.

D. underestimating how much to cut spending on advertising to help cover some/most of the contractual payments to the celebrity, thus resulting in lower profits than could have been earned

E. underestimating how much the number of branded pairs sold will increase, not shipping enough pairs to distribution warehouses to avoid lost sales, and thereby earning less profits than could have been earned from celebrity’ endorsement contracts

Answer: overestimating the size of the gains in branded sales volume and revenue that the company is likely to realize should it be the winning bidder and, therefore, bidding more than the celebrity’s endorsement turns out to be worth.

8. Which of the following actions is NOT a display of good corporate citizenship or an conduct the company’s business in a socially responsible manner?

A. Making donations to charities and charitable causes and using environmentally

attempt to friendly or ‘green” materials in producing footwear at the company’s plants

B. Developing a code of ethics and spending money annually for ethics training of employees and enforcement of the company’s code of ethics

C. Offering free shipping to customers who purchase footwear at the company’s Internet sites and reducing both the Internet and wholesale prices the company charges for branded footwear

D. Investing to improve energy efficiency and the use of renewable energy sources at company

E. Using recycled packaging materials to box each pair of athletic footwear at

the company’s

Answer: Offering free shipping to customers who purchase footwear at the company’s Internet sites and reducing both the Internet and wholesale prices the company charges for branded footwear

9. If a company is pursuing a strategy to differentiate its branded footwear from the offerings of rival companies, its managers should make a point of examining the plant and production cost benchmarking statistics contained in each year’s Footwear

A. Industry Report in order to learn whether it can lower its manufacturing costs per pair produced by investing in one or more plant upgrade option•

B. discern whether the company can earn attractive profits by underpricing the brands of other companies pursuing differentiation strategies

C. discover whether rival companies are overspending on production-related activities to differentiate their branded footwear

D. learn whether its TQM/Six-Sigma expenditures, reject rates, and total compensation packages for plant labor are comparable to other rival companies pursuing a differentiation strategy

E. determine whether immediate actions need to be taken to reduce one or more production cost components at a particular plant–because the plant’s manufacturing costs per pair produced are unacceptably high relative to those at the plants of rival companies

Answer: determine whether immediate actions need to be taken to reduce one or more production cost components at a particular plant–because the plant’s manufacturing costs per pair produced are unacceptably high relative to those at the plants of rival companies

10. Which one of the following is unlikely to be an effective or attractive way to reduce manufacturing costs per pair produced at a particular plant?

A. Actions to reduce the reject rate

B. Actions to avoid any use of overtime

C. Investing in one or more plant upgrades

D. Actions to reduce labor costs per pair produced

Answer: Actions to avoid any use of overtime

Liberty BIBL 104 Quiz 3 – (Version 1 to 4)

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