BSG Comprehensive Exam Questions and Correct Verified Answers
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? - 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? -
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... - 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? - 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... - 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? - 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... - 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... - 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? -
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? - 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: 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? - 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? -
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... - 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? - 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... - 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? - 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... - 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... - 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? -
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? - 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. ✓
