Question 1

In a short essay, explain how carrying costs and ordering costs change with order size in EOQ (economic order quantity)analysis.

Accepted Answer

Carrying costs, such as money tied up in inventory, taxes, and storage, tend to increase when order size increases.Larger orders means that more inventory is on-site at any given time, and more inventory results in higher costs associated with keeping that inventory around-carrying costs.At the same time, larger orders drive ordering costs (paperwork, processing costs)down because needing to order less frequently means that the activities associated with ordering are kept to a minimum.The two types of costs, carrying costs and ordering costs, therefore, tend to go in opposite directions as order size changes.Finding Q, the optimum order size, is typically accomplished by graphically locating the point at which the carrying costs curve and the ordering costs curve intersect.

Question 2

This payoff matrix gives potential dollar gain values in millions for strategies S1, S2, S3, and S4 for the Bent Fork National Bank and competitive strategies CA1, CA2, and CA3 for the Straight Spoon Bank.If Bent Fork is pessimistic, which strategy will it choose?

Accepted Answer

A) S1 
B) S2 
C) S3 
D) S4 
A) S1 
B) S2 
C) S3 
D) S4 B

Question 3

With choice S1, a manager sees gains of $10 million and $6 million.With choice S2, a manager sees gains of $12 million and $3 million.The manager chooses S2, so she must be optimistic.

Accepted Answer

A) True 
 B)False  True

Question 4

The purchase price of a product has no influence on calculating EOQ.

Accepted Answer

A) True 
 B)False

Question 5

This payoff matrix gives potential dollar gain values in thousands for strategies S1, S2, S3, and S4 for Sam's Pizza and competitive strategies CA1, CA2, and CA3 for Pam's Pizza.What is the maximum regret value for S4?

Accepted Answer

A) 13 
B) 7 
C) 2 
D) 17 
A) 13 
B) 7 
C) 2 
D) 17

Question 6

This payoff matrix gives potential dollar gain values in thousands for strategies S1, S2, S3, and S4 for Sam's Pizza and competitive strategies CA1, CA2, and CA3 for Pam's Pizza.What is the maximum regret value for S1?

Accepted Answer

A) 18 
B) 15 
C) 14 
D) 12 
A) 18 
B) 15 
C) 14 
D) 12

Question 7

A company has a current ratio of 2.75 to 1.What should a manager in the company conclude?

Accepted Answer

A) The company is getting the best possible return on its assets. 
B) The company has too many liabilities. 
C) The company is not getting the best possible return on its assets. 
D) The company is not getting the best possible return on its liabilities. 
A) The company is getting the best possible return on its assets. 
B) The company has too many liabilities. 
C) The company is not getting the best possible return on its assets. 
D) The company is not getting the best possible return on its liabilities.

Question 8

Which of the following identifies the goal of managers who use the economic order quantity (EOQ)model?

Accepted Answer

A) minimizing carrying costs and ordering costs 
B) maximizing carrying costs and ordering costs 
C) maximizing carrying costs and minimizing ordering costs 
D) maximizing carrying costs and total costs 
A) minimizing carrying costs and ordering costs 
B) maximizing carrying costs and ordering costs 
C) maximizing carrying costs and minimizing ordering costs 
D) maximizing carrying costs and total costs

Question 9

Mia, a manager at Best Buy, increases the order size for a product that the company sells, which will ________.

Accepted Answer

A) increase both ordering costs and carrying costs 
B) increase ordering costs and decrease carrying costs 
C) decrease both ordering costs and carrying costs 
D) decrease ordering costs and increase carrying costs 
A) increase both ordering costs and carrying costs 
B) increase ordering costs and decrease carrying costs 
C) decrease both ordering costs and carrying costs 
D) decrease ordering costs and increase carrying costs

Question 10

This regret matrix gives values for strategies S1, S2, and S3 for the Bigg Company and competitive strategies CA1, CA2, and CA3 for the Large Company.A minimax Bigg manager would choose S2 because it has the smallest maximum regret of 1.

Accepted Answer

A) True 
 B)False

Question 11

A manager uses break-even analysis to find out how many units of a product he needs to sell to make a profit of zero.

Accepted Answer

A) True 
 B)False

Question 12

Fixed costs for a product are $60,000.The product itself sells for $4.00 and it costs $1.00 to make each product.How will the break-even point for the product change if the variable cost per unit goes up to $1.50?

Accepted Answer

A) The break-even point will increase by 4000. 
B) The break-even point will increase by 24,000. 
C) The break-even point will decrease by 4000. 
D) The break-even point will increase by 20,000. 
A) The break-even point will increase by 4000. 
B) The break-even point will increase by 24,000. 
C) The break-even point will decrease by 4000. 
D) The break-even point will increase by 20,000.

Question 13

In the economic order quantity (EOQ)model, decreasing the order size will increase carrying costs.

Accepted Answer

A) True 
 B)False

Question 14

In a short essay, explain how managers can use current value for making organizational decisions.

Accepted Answer

Current value is calculated by finding t

Question 15

The decision tree shows the profit outcomes for a toy store in a strong and a weak economy for next year.What is the expected value of profit for the store for the year?

Accepted Answer

A) $10,500 
B) $20,900 
C) $29,000 
D) $10,400 
A) $10,500 
B) $20,900 
C) $29,000 
D) $10,400

Question 16

Jeff, a manager at the Flux Soap Store, notices that the store regularly runs out of Jasmine-Berry soap.Currently, the reorder point is fixed when inventory reaches 40 percent of maximum.Which adjustment should Jeff make in a fixed-point reordering system?

Accepted Answer

A) Jeff should lower the reorder level to a point where inventory of Jasmine-Berry soap is at 30 percent of maximum. 
B) Jeff should lower the reorder level to a point where inventory of Jasmine-Berry soap is at 10 percent of maximum. 
C) Jeff should raise the reorder level to a point where inventory of Jasmine-Berry soap is at 50 percent of maximum. 
D) Jeff should lower the reorder level to a point where inventory of Jasmine-Berry soap is at half of the previous level. 
A) Jeff should lower the reorder level to a point where inventory of Jasmine-Berry soap is at 30 percent of maximum. 
B) Jeff should lower the reorder level to a point where inventory of Jasmine-Berry soap is at 10 percent of maximum. 
C) Jeff should raise the reorder level to a point where inventory of Jasmine-Berry soap is at 50 percent of maximum. 
D) Jeff should lower the reorder level to a point where inventory of Jasmine-Berry soap is at half of the previous level.

Question 17

Which psychological orientation would be typical of a manager who is optimistic about her business environment?

Accepted Answer

A) a maximin orientation 
B) a minimin orientation 
C) a maximax orientation 
D) a minimax orientation 
A) a maximin orientation 
B) a minimin orientation 
C) a maximax orientation 
D) a minimax orientation

Question 18

This payoff matrix gives potential dollar gain values in millions for strategies S1, S2, S3, and S4 for the Bent Fork National Bank and competitive strategies CA1, CA2, and CA3 for the Straight Spoon Bank.If Bent Fork is optimistic, which strategy will it choose?

Accepted Answer

A) S1 
B) S2 
C) S3 
D) S4 
A) S1 
B) S2 
C) S3 
D) S4

Question 19

The greater the ratio of TFC to (P - VC)is means that the business needs to sell fewer units to make a profit.

Accepted Answer

A) True 
 B)False

Question 20

This payoff matrix gives potential dollar gain values in thousands for strategies S1, S2, S3, and S4 for Sam's Pizza and competitive strategies CA1, CA2, and CA3 for Pam's Pizza.If Sam chooses S3, how is he feeling about the business climate?

Accepted Answer

A) Sam is feeling pessimistic because he has chosen a maximax strategy. 
B) Sam is feeling pessimistic because he has chosen a minimax strategy. 
C) Sam is feeling optimistic because he has chosen a maximax strategy. 
D) Sam is feeling optimistic because he has chosen a maximin strategy. 
A) Sam is feeling pessimistic because he has chosen a maximax strategy. 
B) Sam is feeling pessimistic because he has chosen a minimax strategy. 
C) Sam is feeling optimistic because he has chosen a maximax strategy. 
D) Sam is feeling optimistic because he has chosen a maximin strategy.

In a short essay, explain how carrying costs and ordering costs change with order size in EOQ (economic order quantity)analysis.

This payoff matrix gives potential dollar gain values in millions for strategies S1, S2, S3, and S4 for the Bent Fork National Bank and competitive strategies CA1, CA2, and CA3 for the Straight Spoon Bank.If Bent Fork is pessimistic, which strategy will it choose?

With choice S1, a manager sees gains of $10 million and $6 million.With choice S2, a manager sees gains of $12 million and $3 million.The manager chooses S2, so she must be optimistic.

The purchase price of a product has no influence on calculating EOQ.

This payoff matrix gives potential dollar gain values in thousands for strategies S1, S2, S3, and S4 for Sam's Pizza and competitive strategies CA1, CA2, and CA3 for Pam's Pizza.What is the maximum regret value for S4?

This payoff matrix gives potential dollar gain values in thousands for strategies S1, S2, S3, and S4 for Sam's Pizza and competitive strategies CA1, CA2, and CA3 for Pam's Pizza.What is the maximum regret value for S1?

A company has a current ratio of 2.75 to 1.What should a manager in the company conclude?

Which of the following identifies the goal of managers who use the economic order quantity (EOQ)model?

Mia, a manager at Best Buy, increases the order size for a product that the company sells, which will ________.

This regret matrix gives values for strategies S1, S2, and S3 for the Bigg Company and competitive strategies CA1, CA2, and CA3 for the Large Company.A minimax Bigg manager would choose S2 because it has the smallest maximum regret of 1.

A manager uses break-even analysis to find out how many units of a product he needs to sell to make a profit of zero.

Fixed costs for a product are $60,000.The product itself sells for $4.00 and it costs $1.00 to make each product.How will the break-even point for the product change if the variable cost per unit goes up to $1.50?

In the economic order quantity (EOQ)model, decreasing the order size will increase carrying costs.

In a short essay, explain how managers can use current value for making organizational decisions.

The decision tree shows the profit outcomes for a toy store in a strong and a weak economy for next year.What is the expected value of profit for the store for the year?

Jeff, a manager at the Flux Soap Store, notices that the store regularly runs out of Jasmine-Berry soap.Currently, the reorder point is fixed when inventory reaches 40 percent of maximum.Which adjustment should Jeff make in a fixed-point reordering system?

Which psychological orientation would be typical of a manager who is optimistic about her business environment?

This payoff matrix gives potential dollar gain values in millions for strategies S1, S2, S3, and S4 for the Bent Fork National Bank and competitive strategies CA1, CA2, and CA3 for the Straight Spoon Bank.If Bent Fork is optimistic, which strategy will it choose?

The greater the ratio of TFC to (P - VC)is means that the business needs to sell fewer units to make a profit.

This payoff matrix gives potential dollar gain values in thousands for strategies S1, S2, S3, and S4 for Sam's Pizza and competitive strategies CA1, CA2, and CA3 for Pam's Pizza.If Sam chooses S3, how is he feeling about the business climate?

Managers and Management

The Management Environment

Integrative Managerial Issues

Foundations of Decision Making

Foundations of Planning

Organization Structure

Managing Human Resources

Managing Change and Innovation

Foundations of Individual Behavior

Understanding Groups and Managing Work Teams

Motivating and Rewarding Employees

Leadership and Trust

Managing Communication and Information

Foundations of Control

Operations Management

History Module

Quantitative Module

Entrepreneurship Module

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Exam 18: Career Module

In a short essay, explain how carrying costs and ordering costs change with order size in EOQ (economic order quantity)analysis.

This payoff matrix gives potential dollar gain values in millions for strategies S1, S2, S3, and S4 for the Bent Fork National Bank and competitive strategies CA1, CA2, and CA3 for the Straight Spoon Bank.If Bent Fork is pessimistic, which strategy will it choose?

With choice S1, a manager sees gains of $10 million and $6 million.With choice S2, a manager sees gains of $12 million and $3 million.The manager chooses S2, so she must be optimistic.

The purchase price of a product has no influence on calculating EOQ.

This payoff matrix gives potential dollar gain values in thousands for strategies S1, S2, S3, and S4 for Sam's Pizza and competitive strategies CA1, CA2, and CA3 for Pam's Pizza.What is the maximum regret value for S4?

This payoff matrix gives potential dollar gain values in thousands for strategies S1, S2, S3, and S4 for Sam's Pizza and competitive strategies CA1, CA2, and CA3 for Pam's Pizza.What is the maximum regret value for S1?

A company has a current ratio of 2.75 to 1.What should a manager in the company conclude?

Which of the following identifies the goal of managers who use the economic order quantity (EOQ)model?

Mia, a manager at Best Buy, increases the order size for a product that the company sells, which will ________.

This regret matrix gives values for strategies S1, S2, and S3 for the Bigg Company and competitive strategies CA1, CA2, and CA3 for the Large Company.A minimax Bigg manager would choose S2 because it has the smallest maximum regret of 1.

A manager uses break-even analysis to find out how many units of a product he needs to sell to make a profit of zero.

Fixed costs for a product are $60,000.The product itself sells for $4.00 and it costs $1.00 to make each product.How will the break-even point for the product change if the variable cost per unit goes up to $1.50?

In the economic order quantity (EOQ)model, decreasing the order size will increase carrying costs.

In a short essay, explain how managers can use current value for making organizational decisions.

The decision tree shows the profit outcomes for a toy store in a strong and a weak economy for next year.What is the expected value of profit for the store for the year?

Jeff, a manager at the Flux Soap Store, notices that the store regularly runs out of Jasmine-Berry soap.Currently, the reorder point is fixed when inventory reaches 40 percent of maximum.Which adjustment should Jeff make in a fixed-point reordering system?

Which psychological orientation would be typical of a manager who is optimistic about her business environment?

This payoff matrix gives potential dollar gain values in millions for strategies S1, S2, S3, and S4 for the Bent Fork National Bank and competitive strategies CA1, CA2, and CA3 for the Straight Spoon Bank.If Bent Fork is optimistic, which strategy will it choose?

The greater the ratio of TFC to (P - VC)is means that the business needs to sell fewer units to make a profit.

This payoff matrix gives potential dollar gain values in thousands for strategies S1, S2, S3, and S4 for Sam's Pizza and competitive strategies CA1, CA2, and CA3 for Pam's Pizza.If Sam chooses S3, how is he feeling about the business climate?

Managers and Management

The Management Environment

Integrative Managerial Issues

Foundations of Decision Making

Foundations of Planning

Organization Structure

Managing Human Resources

Managing Change and Innovation

Foundations of Individual Behavior

Understanding Groups and Managing Work Teams

Motivating and Rewarding Employees

Leadership and Trust

Managing Communication and Information

Foundations of Control

Operations Management

History Module

Quantitative Module

Entrepreneurship Module

Filters