BSG Comprehensive Exam
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. ✓
, BSG Comprehensive Exam
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. ✓
Q: A company's management team should seriously consider bidding for a private-label footwear
contract in a particular geographic region when... - ✔✔ correct answer A: the data in the
Comparative Competitive Efforts section of the latest Competitive Intelligence Report indicates that
some of the winning bidders for private-label footwear were able to win contracts at an offer price
above their selling price for branded footwear. ✓
Q: Which of the following statements about striving to reduce labor costs per pair produced at each
of the company's plants is true? - ✔✔ correct answer A: A company pursuing a low-cost provider
strategy is better able to pursue actions aimed at achieving low labor costs per pair produced in each
of its production facilities (as compared to the labor costs of companies with production facilities in
the same regions) than is a company pursuing a strategy to differentiate its product offering from
rivals in ways that enhance buyer appeal for its branded footwear. ✓
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. ✓
, BSG Comprehensive Exam
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. ✓
Q: A company's management team should seriously consider bidding for a private-label footwear
contract in a particular geographic region when... - ✔✔ correct answer A: the data in the
Comparative Competitive Efforts section of the latest Competitive Intelligence Report indicates that
some of the winning bidders for private-label footwear were able to win contracts at an offer price
above their selling price for branded footwear. ✓
Q: Which of the following statements about striving to reduce labor costs per pair produced at each
of the company's plants is true? - ✔✔ correct answer A: A company pursuing a low-cost provider
strategy is better able to pursue actions aimed at achieving low labor costs per pair produced in each
of its production facilities (as compared to the labor costs of companies with production facilities in
the same regions) than is a company pursuing a strategy to differentiate its product offering from
rivals in ways that enhance buyer appeal for its branded footwear. ✓
