Deck 18: Career Module

Question 1

Which role does uncertainty typically play in how managers function?

A)Uncertainty limits the amount of information that is available.
B)Uncertainty increases the amount of information that is available.
C)Uncertainty improves the quality of information that is available.
D)Uncertainty enhances the information that is available.

Answer 1

A

Question 2

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)18
B)15
C)14
D)12

Answer 2

A

Question 3

The decision tree shows the profit outcomes for a coffee shop in a strong and a weak economy for next year.What is the probability that the economy will be weak in the coming year?

A)0.73
B)27 percent
C)50 percent
D)7.3

Answer 3

A

Question 4

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

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

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.If Sam chooses S4, how is he feeling about the business climate?

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

Question 6

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?

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

Question 7

A manager is worried that if he chooses the wrong investment strategy, his company could lose out on a great deal of money.Which strategy should he follow?

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

Question 8

This regret matrix gives potential dollar values in thousands for strategies S1, S2, S3, and S4 for Al's Fish Fry and competitive strategies CA1, CA2, and CA3 for Sal's Fish Bake.If Al wants to minimize his maximum regret, which strategy should he choose?

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

Question 9

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?

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.

Question 10

The decision tree shows the profit outcomes for a coffee shop in a strong and a weak economy for next year.Suppose a third outcome is considered in which a moderate economy is 33 percent likely to occur.With this added outcome, how does the probability of a weak economy change?

A)A weak economy is now 73 percent likely.
B)A weak economy is also 33 percent likely.
C)A weak economy is now 40 percent likely.
D)A weak economy is now 0 percent likely.

Question 11

In a decision tree, each possible outcome ________.

A)gets assigned a probability value between 0 and 1.0
B)gets assigned a probability value of 50 percent
C)gets assigned a probability value between 0 and 50 percent
D)gets assigned a probability value between 0.5 and 1.0

Question 12

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?

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

Question 13

Which of the following would a manager who wants to minimize her maximum regret choose?

A)the smallest maximum regret value
B)the smallest minimum regret value
C)the smallest difference maximum regret value and the minimum regret value
D)the greatest difference maximum regret value and the minimum regret value

Question 14

In a decision tree, which of the following is true?

A)The probabilities of all of the outcomes must be equal.
B)The sum of the probabilities of all of the outcomes must equal 1.0.
C)No outcome can have a probability that is less to 1.0.
D)The sum of the probabilities of all of the outcomes must be greater than 1.0.

Question 15

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?

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

Question 16

Which of the following best defines regret in a payoff matrix?

A)Regret refers to the difference of the sum of the values in a chosen strategy and the sum of the best strategy.
B)Regret refers to the difference of the sum of the values in a chosen strategy and the sum of the worst strategy.
C)Regret refers to the sum total of the sum of the values in a chosen strategy and the sum of the best strategy.
D)Regret refers to the extra amount of money that could have been made had the person chosen a different strategy.

Question 17

This regret matrix gives potential dollar values in thousands for strategies S1, S2, S3, and S4 for Al's Fish Fry and competitive strategies CA1, CA2, and CA3 for Sal's Fish Bake.If Al chooses S3, what kind of strategy is he using?

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

Question 18

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 S1, how is he feeling about the business climate?

A)Sam is feeling pessimistic because he has chosen a maximax strategy.
B)Sam is feeling optimistic because he has chosen a maximin strategy.
C)Sam is feeling neither pessimistic nor optimistic because he has chosen neither a maximin nor a maximax strategy.
D)Sam is feeling both pessimistic and optimistic because he has chosen both a maximin and a maximax strategy.

Question 19

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

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

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.What is the maximum regret value for S2?

A)24
B)15
C)5
D)0

Question 21

Which of the following would cause a well-run company to become highly leveraged?

A)when the money that the company can earn investing the money that it borrows is equal to the cost of borrowing
B)when the money that the company can earn investing the money that it borrows is significantly less than the cost of borrowing
C)when the money that the company can earn investing the money that it borrows is significantly greater than the cost of borrowing
D)when the money that the company can earn investing the money that it borrows is equal to more than half of the cost of borrowing

Question 22

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

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 23

Which of the following characterizes a highly leveraged company?

A)high total assets relative to total debt
B)high total debt relative to total assets
C)high total debt relative to inventories
D)high total interest payments relative to total debt

Question 24

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 the store's profit in a strong economy?

A)$10,500
B)$15,000
C)$16,000
D)$30,000

Question 25

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?

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 26

Decision trees show the profit outcomes for the plans for two doughnut stores in two different locations in a strong and a weak economy for the future.If the investor interested in building a store is pessimistic, in which location should she build?

A)She should build Store 2, because it has a greater minimum profit.
B)She should build Store 2, because it has a greater maximum profit.
C)She should build Store 1, because it has a greater maximum profit.
D)She should build Store 1, because it has a greater minimum profit.

Question 27

When is the acid test an especially important test for a company's liquidity?

A)when the economy is slow and inventory is not selling
B)when the economy is robust and inventory is selling fast
C)with companies that exclusively sell services and therefore do not have any inventory
D)with companies that exclusively sell services to the wealthy and therefore are not subject to economic downturns

Question 28

Production data for the number of hours required per unit for making the Droid and iPhone versions of cell phone components by Bizzer, a high-tech manufacturing firm, is given below.Suppose the plant decides to make the maximum number of iPhone components possible and reach the rest of its capacity by making Droid phones.How many of each type of phone will it make?

Monthly Product

A)375 iPhone units and 625 Droid units
B)500 iPhone units and 500 Droid units
C)1000 iPhone units and 1000 Droid units
D)625 iPhone units and 375 Droid units

Question 29

Production data for the number of hours required per unit for making the Droid and iPhone versions of cell phone components by Bizzer, a high-tech manufacturing firm, is given below.What is the maximum number of Droid units that the factory can make?

Monthly Product

A)625
B)1000
C)5000
D)800

Question 30

Decision trees show the profit outcomes for the plans for two doughnut stores in two different locations in a strong and a weak economy for the future.If the investor interested in building a store is optimistic, in which location should she build?

A)She should build Store 1, because it has a lower minimum profit.
B)She should build Store 2, because it has a greater maximum profit.
C)She should build Store 1, because it has a greater maximum profit.
D)She should build Store 2, because it has a greater minimum profit.

Question 31

Decision trees show the profit outcomes for the plans for two doughnut stores in a strong and a weak economy for the future.Which store is expected to have the greater expected profit?

A)Store 1 has a $27,900 greater profit.
B)Store 1 has a $1200 greater profit.
C)Store 2 has a $26,700 greater profit.
D)Store 2 has a $1200 greater profit.

Question 32

For break-even analysis, which of the following is a fixed cost for a doughnut shop?

A)costs for purchasing flour and sugar
B)energy costs for ovens and heating
C)interest payments on loans
D)advertising costs

Question 33

Fixed costs for a product are $30,000.The product itself sells for $3.00 and it costs $1.50 to make each product.How can the plant decrease the break-even point by 5000 units?

A)Increase P, the price of the item, by $0.50.
B)Increase TFC, the fixed costs for item, by $5000.
C)Decrease P, the price of the item, by $0.50.
D)Decrease TFC, the fixed costs for item, by $5000.

Question 34

The decision tree shows the profit outcomes for a toy store in a strong and a weak economy for next year.If the economy turns out to be weak, how much profit is the store likely to lose out?

A)$14,000
B)$16,000
C)$30,000
D)$15,000

Question 35

A company has a current ratio of 0.85 to 1.What should a manager in the company worry about?

A)The company has too many assets and is not using them efficiently.
B)The company has too much inventory.
C)The company may start to have trouble paying salaries.
D)The company is paying salaries that are too high.

Question 36

A manager does a break-even analysis and finds that his value for BE, the break-even point, has decreased over time.Which of the following could be responsible for this event?

A)TFC has increased.
B)P has increased.
C)VC has decreased.
D)P has decreased.

Question 37

Production data for the number of hours required per unit for making the Droid and iPhone versions of cell phone components by Bizzer, a high-tech manufacturing firm, is given below.What is the maximum number of units that the factory can make of either type of phone component? Monthly Product

A)2500
B)2000
C)500
D)1000

Question 38

Fixed costs for a product are $50,000.The product itself sells for $5.00 and it costs $3.00 to make each product.What is the break-even point for the product?

A)100,000
B)10,000
C)50,000
D)25,000

Question 39

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?

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

Question 40

Production data for the number of hours required per unit for making the Droid and iPhone versions of cell phone components by Bizzer, a high-tech manufacturing firm, is given below.What is the maximum number of iPhone units that the factory can make?

Monthly Product

A)625
B)1000
C)5000
D)800

Question 41

A queuing theory analysis for the Department of Motor Vehicles determines that customers typically wait for 8 minutes and that the agency should strive never to exceed more than 5 customers in a single line.What is the maximum amount of time that customers should be expected to wait?

A)8 minutes
B)40 minutes
C)20 minutes
D)24 minutes

Question 42

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?

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 43

This payoff matrix gives values for strategies S1, S2, and S3 for the Bigg Company and competitive strategies CA1, CA2, and CA3 for the Large Company.From Bigg's point of view, the S1 maximum regret for CA2 is 8.

Question 44

A pessimistic manager will typically follow a minimin choice.

Question 45

Mia, a manager at Best Buy, should be able to find Q, the most economic order size for a product, by ________.

A)locating where the carrying costs curve and the total costs curve intersect
B)locating where the carrying costs curve and the ordering costs curve intersect
C)locating where the carrying costs curve and the ordering costs curve are parallel
D)locating where the total costs curve and the ordering costs curve are parallel

Question 46

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.

Question 47

Production data for the number of hours required per unit for making the Droid and iPhone versions of cell phone components by Bizzer, a high-tech manufacturing firm, is given below.Suppose the plant decides exclusively to make either the maximum number of iPhone components or the maximum number of Droid phones.Which choice will result in the greater profit?

Monthly Product

A)Making Droid units will result in $4000 more profit.
B)Making iPhone units will result in $250 more profit.
C)Making Droid units will result in $250 more profit.
D)Making iPhone units will result in $3750 more profit.

Question 48

With choice S1, a manager sees gains of $10 million and $6 million.With choice S2, a manager sees gains of $12 million and $8 million.S2 might be the choice of a pessimistic manager.

Question 49

How does a fixed-point reordering system work?

A)When inventory level reaches 50 percent of maximum, the system orders new inventory.
B)When inventory level reaches 33 percent of maximum, the system orders new inventory.
C)At some preestablished inventory level, the system automatically orders new inventory.
D)At some random inventory level, the system automatically orders new inventory.

Question 50

A queuing theory analysis for the Department of Motor Vehicles determines that customers typically wait for 8 minutes and that the agency should strive never to exceed more than 5 customers in a single line.An analysis comes up with a value for P of 0.125.What does this P value mean?

A)that customers will wait an average of 12.5 minutes
B)that the chances that a customer will need to wait for more than 5 people in line are 1 in 8
C)that customers will wait an average of 0.125 minutes
D)that the chances that a customer will need to wait for more than 5 people in line are 1 in 12.5

Question 51

Jeff, a manager at the Flux Soap Store, lowered the reorder point for Butterscotch-Lemon soap from 33 percent of maximum to 20 percent of maximum.What is Jeff likely to observe?

A)The level of Butterscotch-Lemon soap in stock should increase.
B)Sales of Butterscotch-Lemon soap should decrease.
C)Sales of Butterscotch-Lemon soap should increase.
D)The level of Butterscotch-Lemon soap in stock should drop.

Question 52

This payoff matrix gives values for strategies S1, S2, and S3 for the Bigg Company and competitive strategies CA1, CA2, and CA3 for the Large Company.From Bigg's point of view, the S1 maximum regret for CA1 is 8.

Question 53

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

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 54

Production data for the number of hours required per unit for making the Droid and iPhone versions of cell phone components by Bizzer, a high-tech manufacturing firm, is given below.Suppose the plant decides to make the maximum number of iPhone components possible and reach the rest of its capacity by making Droid phones.How much profit will it make?

Monthly Product

A)$3750
B)$1500
C)$5250
D)$4000

Question 55

Regret is computed by subtracting the value of a possible strategy from the greatest value in the entire matrix.

Question 56

This payoff matrix gives values for strategies S1, S2, and S3 for the Bigg Company and competitive strategies CA1, CA2, and CA3 for the Large Company.From Bigg's point of view, the S2 maximum regret is 9.

Question 57

An optimistic manager will typically follow a maximax choice.

Question 58

A new upgrade for a product is expected to increase demand by a factor of 4.If all other factors remain equal, how is EOQ likely to change?

A)EOQ will double.
B)EOQ will increase by 50 percent.
C)EOQ will decrease by 50 percent.
D)EOQ will not change.

Question 59

With choice S1, a manager sees gains of $10 million and $6 million.With choice S2, a manager sees gains of $12 million and $8 million.Only a pessimistic manager would choose S1.

Question 60

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

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 61

A company is worried about meeting its interest expenses, so it should pay close attention to its times interest earned.

Question 62

Return on investment measures the ratio of total profits to total assets.

Question 63

An organization with a high leverage ratio has usually been overly cautious and conservative in its borrowing.

Question 64

Reducing the value of VC in a break-even analysis means that the business needs to sell fewer units to turn a profit.

Question 65

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 choosing S3 would have a greatest possible regret of 2.

Question 66

The decision tree shows the profit outcomes for a sandwich shop in a strong and a weak economy.Overall, the shop is expected to make $32,000.

Question 67

The decision tree shows the profit outcomes for a sandwich shop in a strong and a weak economy.If the economy is weak, the shop is likely to make 60 percent of a $25,000 profit, or $15,000.

Question 68

Liquidity is a measure of an organization's ability to access cash to meet its debt obligations.

Question 69

The decision tree shows the profit outcomes for a sandwich shop in a strong and a weak economy.If the economy is strong, the shop is likely to make an $80,000 profit.

Question 70

A current ratio of 1.5 to 1 for an organization suggests that the organization will not be able to meet its short-term debt obligations.

Question 71

The decision tree shows the profit outcomes for a sandwich shop in a strong and a weak economy.The shop is likely to make $105,000, the sum of both projections.

Question 72

Production data for Streaks is shown.Using linear programming, if running shoes are represented by R and soccer shoes by S, 5R + 3S < 750 is the correct constraint equation for design.
Monthly Product

Question 73

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.

Question 74

Production data is shown for the number of hours required per unit for the Running and Soccer versions of Streaks, custom made athletic shoes.Using linear programming, if running shoes are represented by R and soccer shoes by S, the expression $16R + $20S is equal to the maximum profit that can be made.
Monthly Product

Question 75

This payoff matrix gives values for strategies S1, S2, and S3 for the Bigg Company and competitive strategies CA1, CA2, and CA3 for the Large Company.From Bigg's point of view, the S3 maximum regret is 1.

Question 76

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.

Question 77

Decision trees are unreliable for making pricing decisions.

Question 78

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.The maximum regrets for this table are S1 = 5, S2 = 9, S3 = 12.

Question 79

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

Question 80

The break-even point is computed by the formula BE = [TFC/(P - VC)].