Question 1

Measuring and evaluating performance historically has had certain problems and limitations.

Accepted Answer

A) True 
 B)False

Question 2

According to Kaplan and Norton, a balanced scorecard includes all of the following key performance measurement areas except the _____.

Accepted Answer

A) customer satisfaction perspective 
B) operational excellence perspective 
C) innovation perspective 
D) human resource perspective 
E) financial perspective

Question 3

_____ is the process of determining what the external customer is willing to pay for a product or service and then assigning specific cost targets to the components, assemblies, and systems that make up the product or service.

Accepted Answer

A) Specific costing 
B) Target pricing 
C) Total cost analysis 
D) Cost avoidance 
E) None of these answers.

Question 4

A _____ is the increase or decrease in cost resulting from a change in purchasing strategy or practice brought about by an individual or a group.

Accepted Answer

A) cost change 
B) cost avoidance 
C) target cost 
D) target price 
E) purchase price variance

Question 5

Salaries traditionally take the largest share of the purchasing administrative budget.

Accepted Answer

A) True 
 B)False

Question 6

The most common price performance measures include actual purchase price versus planned purchase price comparisons, actual purchase price(s) compared to a market index, comparisons of actual-to-actual purchase prices for individual and aggregated items between operating plants or divisions within an organization, and target prices achieved.

Accepted Answer

A) True 
 B)False

Question 7

It is uncommon to have additional measures that track different aspects of a firm's inventory investment.

Accepted Answer

A) True 
 B)False

Question 8

A common misconception is that a performance evaluation system should not measure every possible activity.

Accepted Answer

A) True 
 B)False

Question 9

A serious problem in measurement is that the data that managers pay attention to are often the wrong data.

Accepted Answer

A) True 
 B)False

Question 10

_____ measures include tracking actual transportation costs against some preestablished objective, demurrage and detention costs, and premium transportation.

Accepted Answer

A) Transportation cost avoidance 
B) PPM 
C) Field failure rate 
D) Target prices achieved 
E) Transportation cost reduction

Question 11

Measurement is virtually free.

Accepted Answer

A) True 
 B)False

Question 12

_____ refers to the extent to which, by choosing a certain course of action, management can meet a previously established goal or standard.

Accepted Answer

A) Operational benchmarking 
B) Efficiency 
C) Support-activity benchmarking 
D) Effectiveness 
E) None of these answers.

Question 13

Well-defined measures use data that are available and accurate.

Accepted Answer

A) True 
 B)False

Question 14

All aspects of performance lend themselves to quantitative measurement.

Accepted Answer

A) True 
 B)False

Question 15

Joint participation means that the personnel responsible for each measure participate in developing the measure or establishing the measure's performance objective.

Accepted Answer

A) True 
 B)False

Question 16

There is no one best way to measure performance.

Accepted Answer

A) True 
 B)False

Question 17

A/An _____ would typically link to a contractual agreement whereby, for new technologies, the buying firm may get insight or some period of time before new technology developments are shared with other organizations.

Accepted Answer

A) TQM measure 
B) first insight measure 
C) cycle time reduction 
D) responsiveness measure 
E) None of these answers.

Question 18

All of the following are phases in the benchmarking process except _____.

Accepted Answer

A) planning 
B) analysis 
C) integration 
D) maturity 
E) total cost analysis

Question 19

Some individuals resist the benchmarking process because of a reluctance to recognize the value of a competitor's way of doing business - the "not invented here" syndrome.

Accepted Answer

A) True 
 B)False

Question 20

Historical data provide substantial insight about the performance capabilities of competitors or other leading firms.

Accepted Answer

A) True 
 B)False

Exam 19: Performance Measurement and Evaluation

Measuring and evaluating performance historically has had certain problems and limitations.

According to Kaplan and Norton, a balanced scorecard includes all of the following key performance measurement areas except the _____.

_____ is the process of determining what the external customer is willing to pay for a product or service and then assigning specific cost targets to the components, assemblies, and systems that make up the product or service.

A _____ is the increase or decrease in cost resulting from a change in purchasing strategy or practice brought about by an individual or a group.

Salaries traditionally take the largest share of the purchasing administrative budget.

It is uncommon to have additional measures that track different aspects of a firm's inventory investment.

A common misconception is that a performance evaluation system should not measure every possible activity.

A serious problem in measurement is that the data that managers pay attention to are often the wrong data.

_____ measures include tracking actual transportation costs against some preestablished objective, demurrage and detention costs, and premium transportation.

Measurement is virtually free.

_____ refers to the extent to which, by choosing a certain course of action, management can meet a previously established goal or standard.

Well-defined measures use data that are available and accurate.

All aspects of performance lend themselves to quantitative measurement.

Joint participation means that the personnel responsible for each measure participate in developing the measure or establishing the measure's performance objective.

There is no one best way to measure performance.

A/An _____ would typically link to a contractual agreement whereby, for new technologies, the buying firm may get insight or some period of time before new technology developments are shared with other organizations.

All of the following are phases in the benchmarking process except _____.

Some individuals resist the benchmarking process because of a reluctance to recognize the value of a competitor's way of doing business - the "not invented here" syndrome.

Historical data provide substantial insight about the performance capabilities of competitors or other leading firms.