BSG Comprehensive Exam questions and answers A+ Grade
2026\2027
Q: 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?
- correct answer A: Striving to keep marketing expenses per branded pair sold to amounts that are
below the industry-high in each region ✓
Q: Which one of the following is most likely to be an effective or attractive profit-enhancing way to try
to reduce total production costs per pair at a particular production facility?
- correct answer A: Pursuing actions that will better enable the company to operate its production
facilities at (or very close to) full production capacity, including maximum use of overtime ✓
Q: The managers of all companies should make a point of examining the production benchmarks shown
on p. 6 of each year's Footwear Industry Report in order to...
- correct answer A: determine whether immediate actions need to be taken at one or more of their
company's production facilities to do a better job of managing total compensation, workforce
productivity, production labor costs, spending for TQM/Six Sigma programs, total production costs,
and/or reject rates. ✓
Q: Which one of the following is an advantage of having production facilities to manufacture athletic
footwear in all four geographic regions?
- correct answer A: Increased ability to lower expenditures for shipping/freight costs from the
company's production operations to distribution centers in the various regions--this is because when a
company has production operations in all four geographic regions it typically needs to ship fewer pairs
of footwear from production facilities in one region to distribution centers in a different region ✓
Q: An appealing strategy that a company can use to reduce its exposure to adverse exchange rate
adjustments to the costs of pairs shipped to a distribution warehouse from a production facility in a
different geographic region is to...
- correct answer A: invest in sufficient production capacity in each of the four geographic regions to
greatly reduce (maybe even eliminate) the need to ship pairs to a distribution warehouse from a
production facility in a different geographic region--such a strategy has the highly attractive added
benefit of cutting/eliminating tariff payments on imported footwear. ✓
, Q: Which one of the following actions is least likely to increase labor productivity by an amount that is
large enough to result in lower labor costs per pair produced at a particular plant?
- correct answer A: Increasing total compensation per production worker to an amount that is slightly
above the industry-average in those regions where the company has production facilities ✓
Q: The installation of production improvement option D which boosts worker productivity by 50% by
using robots to assist in producing footwear...
- correct answer A: is a more economically attractive means for reducing labor costs per pair produced
at a production facility in North America than for a production facility in the Asia-Pacific. ✓
Q: Valid reasons why a company should definitely open a new production facility in Latin America
include...
- correct answer A: being able to avoid paying import tariffs on footwear produced and sold in Latin
America; moreover, the freight costs on pairs shipped from a production facility in Latin America to the
Latin American distribution center are lower than the freight costs on pairs shipped from production
facilities outside Latin America to the Latin American distribution center. ✓
Q: Which of the following is a valid reason or strong signal that a company should consider changing
from a low-cost/low-price strategy for branded footwear to a different strategy?
- correct answer A: The company's total production costs per branded pair, distribution and warehouse
costs per branded pair available for sale, and branded costs per pair sold shown on pp. 6-7 of the most
recent Footwear Industry Report are near or above the industry-average (instead of being at or near the
industry-low) and, in addition, many other companies in the industry are selling branded footwear at
below-average prices (which signals that this target market segment may be overcrowded with
competitors). ✓
Q: Production improvement option B (with capital costs of $1.6 million per million pairs of production
capacity and annual depreciation costs of 10%) that reduces production run setup costs by 50% each
year makes the most economic sense in which of the following circumstances?
- correct answer A: Company managers expect to produce 350 models/styles and 4 million pairs of
branded footwear on an ongoing basis at a new 4-million pair capacity facility in Latin America--annual
production run setup costs for 350 models of branded footwear are $9 million. ✓
Q: A strategy to be a low-cost provider of branded footwear is unlikely to result in the company being
one of the best-performers in the industry unless the company's management team...
- correct answer A: proves adept in operating the company as cost effectively (if not more cost
effectively) than rivals that are also striving to be a low-cost provider of branded footwear. ✓
2026\2027
Q: 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?
- correct answer A: Striving to keep marketing expenses per branded pair sold to amounts that are
below the industry-high in each region ✓
Q: Which one of the following is most likely to be an effective or attractive profit-enhancing way to try
to reduce total production costs per pair at a particular production facility?
- correct answer A: Pursuing actions that will better enable the company to operate its production
facilities at (or very close to) full production capacity, including maximum use of overtime ✓
Q: The managers of all companies should make a point of examining the production benchmarks shown
on p. 6 of each year's Footwear Industry Report in order to...
- correct answer A: determine whether immediate actions need to be taken at one or more of their
company's production facilities to do a better job of managing total compensation, workforce
productivity, production labor costs, spending for TQM/Six Sigma programs, total production costs,
and/or reject rates. ✓
Q: Which one of the following is an advantage of having production facilities to manufacture athletic
footwear in all four geographic regions?
- correct answer A: Increased ability to lower expenditures for shipping/freight costs from the
company's production operations to distribution centers in the various regions--this is because when a
company has production operations in all four geographic regions it typically needs to ship fewer pairs
of footwear from production facilities in one region to distribution centers in a different region ✓
Q: An appealing strategy that a company can use to reduce its exposure to adverse exchange rate
adjustments to the costs of pairs shipped to a distribution warehouse from a production facility in a
different geographic region is to...
- correct answer A: invest in sufficient production capacity in each of the four geographic regions to
greatly reduce (maybe even eliminate) the need to ship pairs to a distribution warehouse from a
production facility in a different geographic region--such a strategy has the highly attractive added
benefit of cutting/eliminating tariff payments on imported footwear. ✓
, Q: Which one of the following actions is least likely to increase labor productivity by an amount that is
large enough to result in lower labor costs per pair produced at a particular plant?
- correct answer A: Increasing total compensation per production worker to an amount that is slightly
above the industry-average in those regions where the company has production facilities ✓
Q: The installation of production improvement option D which boosts worker productivity by 50% by
using robots to assist in producing footwear...
- correct answer A: is a more economically attractive means for reducing labor costs per pair produced
at a production facility in North America than for a production facility in the Asia-Pacific. ✓
Q: Valid reasons why a company should definitely open a new production facility in Latin America
include...
- correct answer A: being able to avoid paying import tariffs on footwear produced and sold in Latin
America; moreover, the freight costs on pairs shipped from a production facility in Latin America to the
Latin American distribution center are lower than the freight costs on pairs shipped from production
facilities outside Latin America to the Latin American distribution center. ✓
Q: Which of the following is a valid reason or strong signal that a company should consider changing
from a low-cost/low-price strategy for branded footwear to a different strategy?
- correct answer A: The company's total production costs per branded pair, distribution and warehouse
costs per branded pair available for sale, and branded costs per pair sold shown on pp. 6-7 of the most
recent Footwear Industry Report are near or above the industry-average (instead of being at or near the
industry-low) and, in addition, many other companies in the industry are selling branded footwear at
below-average prices (which signals that this target market segment may be overcrowded with
competitors). ✓
Q: Production improvement option B (with capital costs of $1.6 million per million pairs of production
capacity and annual depreciation costs of 10%) that reduces production run setup costs by 50% each
year makes the most economic sense in which of the following circumstances?
- correct answer A: Company managers expect to produce 350 models/styles and 4 million pairs of
branded footwear on an ongoing basis at a new 4-million pair capacity facility in Latin America--annual
production run setup costs for 350 models of branded footwear are $9 million. ✓
Q: A strategy to be a low-cost provider of branded footwear is unlikely to result in the company being
one of the best-performers in the industry unless the company's management team...
- correct answer A: proves adept in operating the company as cost effectively (if not more cost
effectively) than rivals that are also striving to be a low-cost provider of branded footwear. ✓
