MBA 705: Exam 3 Latest Questions
with All Accurate Answers 2026/2027.
An organization's ability to substitute labor for capital or vice versa as production increases. -
Answer Capital-Labor Substitution:
increases. Experience Curve: The reduction in per-unit costs that occur as an organization gains
experience producing a product or service. - Answer Experience Curve:
The strategies pursued by each functional area of a business unit, such as marketing, finance, or
production. - Answer Functional Strategies:
The sum of the capabilities of individuals in an organization. - Answer Human Capital:
An inventory system, popularized by the Japanese, in which suppliers deliver parts just at the
time they are needed by the buying organization to use in its production process. - Answer
Just-In-Time (JIT) Inventory System:
People and their skills and abilities (i.e., knowledge capital) represent the only resource that
cannot readily be reproduced by a firm's competitors. Knowledge capital must be effectively
leveraged if high-performing firms are to remain as such over the long term. - Answer
Knowledge Management:
The increased efficiency that occurs when an employee performs a task repeatedly. - Answer
Learning:
R & D activities that seek to reduce the costs of operations and make them more efficient. -
Answer Process R & D:
R & D activities directed toward improvements or innovations in the quality or uniqueness of a
company's outputs. - Answer Product/Service R & D:
A broad-based program designed to improve product and service quality and to increase
customer satisfaction by incorporating a holistic commitment to quality as seen through the
eyes of the customer. - Answer Total Quality Management (TQM):
False.
, Although functional strategies are formulated after the corporate and business strategies have
already been established, one still needs to consider the capabilities of the various functional
areas when considering various corporate and business strategic options. - Answer Because
functional strategies should be designed to support corporate and business strategies, they
should not be considered until corporate and business strategies have been formulated.
True or False
True.
Some forms of raising capital tend to be more effective than others, depending on the strategy. -
Answer The most appropriate means of securing funds likely depends on the corporate and
business strategies being pursued.
True or False
False.
The reduction in per-unit costs that occurs as an organization gains experience producing a
product or service is known as the experience curve. - Answer The reduction in per-unit costs
that occurs as an organization gains experience producing a product or service is known as
economies of scale. Economies of scale is one of the contributing factors to the experience
curve.
True or False
False.
Purchasing departments in low-cost businesses should seek the "best cost"—the lowest cost
within an acceptable range of quality standards. - Answer The purchasing department in a
low-cost business should always purchase raw materials at the lowest possible cost.
True or False
False.
Although higher than average pay rates are generally not consistent with the low-cost strategy,
businesses seeking to minimize costs may need to pay market rates to maintain a competitive
workforce. - Answer The human resources department in a low-cost business should always
attempt to hire managers and workers at pay rates below those of their competitors.
with All Accurate Answers 2026/2027.
An organization's ability to substitute labor for capital or vice versa as production increases. -
Answer Capital-Labor Substitution:
increases. Experience Curve: The reduction in per-unit costs that occur as an organization gains
experience producing a product or service. - Answer Experience Curve:
The strategies pursued by each functional area of a business unit, such as marketing, finance, or
production. - Answer Functional Strategies:
The sum of the capabilities of individuals in an organization. - Answer Human Capital:
An inventory system, popularized by the Japanese, in which suppliers deliver parts just at the
time they are needed by the buying organization to use in its production process. - Answer
Just-In-Time (JIT) Inventory System:
People and their skills and abilities (i.e., knowledge capital) represent the only resource that
cannot readily be reproduced by a firm's competitors. Knowledge capital must be effectively
leveraged if high-performing firms are to remain as such over the long term. - Answer
Knowledge Management:
The increased efficiency that occurs when an employee performs a task repeatedly. - Answer
Learning:
R & D activities that seek to reduce the costs of operations and make them more efficient. -
Answer Process R & D:
R & D activities directed toward improvements or innovations in the quality or uniqueness of a
company's outputs. - Answer Product/Service R & D:
A broad-based program designed to improve product and service quality and to increase
customer satisfaction by incorporating a holistic commitment to quality as seen through the
eyes of the customer. - Answer Total Quality Management (TQM):
False.
, Although functional strategies are formulated after the corporate and business strategies have
already been established, one still needs to consider the capabilities of the various functional
areas when considering various corporate and business strategic options. - Answer Because
functional strategies should be designed to support corporate and business strategies, they
should not be considered until corporate and business strategies have been formulated.
True or False
True.
Some forms of raising capital tend to be more effective than others, depending on the strategy. -
Answer The most appropriate means of securing funds likely depends on the corporate and
business strategies being pursued.
True or False
False.
The reduction in per-unit costs that occurs as an organization gains experience producing a
product or service is known as the experience curve. - Answer The reduction in per-unit costs
that occurs as an organization gains experience producing a product or service is known as
economies of scale. Economies of scale is one of the contributing factors to the experience
curve.
True or False
False.
Purchasing departments in low-cost businesses should seek the "best cost"—the lowest cost
within an acceptable range of quality standards. - Answer The purchasing department in a
low-cost business should always purchase raw materials at the lowest possible cost.
True or False
False.
Although higher than average pay rates are generally not consistent with the low-cost strategy,
businesses seeking to minimize costs may need to pay market rates to maintain a competitive
workforce. - Answer The human resources department in a low-cost business should always
attempt to hire managers and workers at pay rates below those of their competitors.
