BMGT FINAL EXAM QUESTIONS AND
ANSWERS (ALREADY GRADED A+)
primary activities of the value chain - ANSWER-inbound logistics, operations, outbound
logistics, marketing and sales, service
The value chain - ANSWER-firm infrasture, human resource management, technology,
procurement, inbound logistics, operations, outbound logistics, marketing and sales,
service
secondary activities of the value chain - ANSWER-procurement, human resources
define inbound Logistics - ANSWER-arranging the inbound movement of materials,
parts, and/or finished inventory from suppliers
define operations - ANSWER-manage the process that converts inputs (in the forms of
raw materials, labor, and energy) into outputs (in the form of goods and/or services).
define outbound Logistics - ANSWER-related to the storage and movement of the final
product
define marketing and Sales - ANSWER-selling a product or service
define service - ANSWER-all the activities required to keep the product/service working
effectively for the buyer after it is sold and delivered
define procurement - ANSWER-acquisition of goods, services or works from an outside
external source
define human resources Management - ANSWER-involved in recruiting, hiring, training,
developing, compensating and firing
define Technological Development - ANSWER-pertains to the equipment, hardware,
software, procedures and technical knowledge used by the firm
What is the concept of the invisible hand in? - ANSWER-Wealth of Nations by Adam
Smith
5 factors of production - ANSWER-land and natural resources, labor, capital,
entrepreneurship, knowledge
,most important factors of production right now? - ANSWER-euntrepeunorship and
knowledge
define demand - ANSWER-relationship between the amount of product consumers will
purchase and the price for which it is sold
why is demand downward sloping? - ANSWER-people buy when the price is lower.
More people value a product at a lower cost than those that value it at a high price.
define supply - ANSWER-The relationship between the amount of product sellers will
produce and the price for which it is sold
why is supply upward sloping - ANSWER-You have to spend more to produce more. As
production increases, cost increases
define infrastructure - ANSWER-consists of activities such as accounting, legal, finance,
control, public relations, quality assurance and general (strategic) management
value chain example: Fen Side Golf Course is an internationally known Scottish golf
facility. It is not just an eighteen hole world-class golf course, it has a five star hotel with
250 luxury rooms, and private leisure centre, indoor tennis courts, as well as a series of
top-class restaurants.
A. All staff are trained to the highest industry standards.
B. The hotel management team focus on goals set out in their strategic plan.
C. All golf course fairways are trimmed and watered daily.
D. Fresh fruit and vegetables are delivered and prepared every day.
E. The hotel has an advanced room reservation system.
F. Fen Side is promoted through magazines targeted at the wealthy and influential.
G. The whole experience is based upon high quality, professional service at every
stage.
H. Limousines are available to take guests to airports as they finish their stay.
I. Fen Side has a series of contracts with suppliers of - ANSWER-a. human resources
b. infrastructure
c. services
d. inbound logistics
e. technology
f. marketing
g. operations/Human Resources/Marketing- basically everyone
h. Outbound Logistics/service/procurement has to rent limousines/operations
I. Procurement/inbound logistics, marketing decides too
define value chain - ANSWER-set of activities that let firms produce, sell, and support
the goods and/or services that generate its profits
define nonprofit organization - ANSWER-One that doesn't make money or charge for its
services? They generate revenue but not profit. They see gaps between revenue and
,cost.Nonprofits often do make money, but they take that money and use it to advance a
cause or to improve their business
Pros and cons of working at or running a nonprofit as opposed to a for-profit business? -
ANSWER-Benefit society and feel good about what you're doing, satisfied taking a
lower salary
define goods - ANSWER-tangible products
define services - ANSWER-intangible products
Right now, is the US economy more into goods or services? - ANSWER-services
because its now cheaper to produce goods in other countries
what percent of the economy comes from services? - ANSWER-80%
define risk - ANSWER-dictionary: possibility of loss or injury
finance: the chance that an investment's actual return will be different than expected
Suppose you invent a solar-powered car that costs $10,000 per car to make, and you
are the only manufacturer. How much would you charge? - ANSWER-You have to
figure what most people can afford. Advertise how much people will be saving on gas
by using the car
entrepreneurship vs. employment pros and cons - ANSWER-euntrepeunorship
pros: Chance for larger profit, make your own business decisions
cons: Risky, might not get a salary for a while during company start up, no benefits and
perks, responsible if fails
employment
pros: Steady income, reliable, benefits and perks, hours, low liability
cons: low upside, expandable, boss, less control
what is the primary purpose of most businesses? - ANSWER-profit
what type of relationship do risk and profit have? - ANSWER-positive
what is the role of the law in the market? - ANSWER-prevent fraud, protect the honest
types of costs? - ANSWER-accounting, opportunity, economic
Accounting cost - ANSWER-the monetary value of resources used
Opportunity cost - ANSWER-the benefit that must be given up to use a resource in one
activity as opposed to its most beneficial alternative
, Economic cost - ANSWER-accounting cost plus opportunity cost
define equilibrium - ANSWER-the price at which the quantity demanded equals the
quantity supplied
relationship between inflation and money supply - ANSWER-if there is more money in
the economy, the spending power of money in the economy decreases
higher interest rates means - ANSWER-less borrowing by businesses and more saving
by individual
lower interest rates means - ANSWER-more borrowing by businesses and more
spending by individuals
define capitalism - ANSWER-economic system based on free market enterprise, all or
most of the factors of production and distribution are privately owned and operated for
profit
define socialism - ANSWER-economic system based on social ownership and control of
enterprise
what happens if the price is higher than equilibrium? - ANSWER-surplus of goods
what happens if the price is lower than equilibrium? - ANSWER-shortage of goods
types of competition - ANSWER-perfect competition, monopolistic competition,
oligopoly, monopoly
perfect competition - ANSWER-identical sellers and product, no one can unilaterally
influence price, example: steel
Monopolistic competition - ANSWER-large number of sellers, products perceived as
different, examples: fast food
Oligopoly - ANSWER-a few sellers, each with market power, examples: auto
manufacturers, airlines (few sellers can charge whatever they want, little competition)
Monopoly - ANSWER-one seller with total control over price and quantity, example:
Power companies in some areas- a natural monopoly (gov regulates to reduce amount
of power lines)
Microeconomics - ANSWER-the study of markets and individuals and organizations
acting within markets
ANSWERS (ALREADY GRADED A+)
primary activities of the value chain - ANSWER-inbound logistics, operations, outbound
logistics, marketing and sales, service
The value chain - ANSWER-firm infrasture, human resource management, technology,
procurement, inbound logistics, operations, outbound logistics, marketing and sales,
service
secondary activities of the value chain - ANSWER-procurement, human resources
define inbound Logistics - ANSWER-arranging the inbound movement of materials,
parts, and/or finished inventory from suppliers
define operations - ANSWER-manage the process that converts inputs (in the forms of
raw materials, labor, and energy) into outputs (in the form of goods and/or services).
define outbound Logistics - ANSWER-related to the storage and movement of the final
product
define marketing and Sales - ANSWER-selling a product or service
define service - ANSWER-all the activities required to keep the product/service working
effectively for the buyer after it is sold and delivered
define procurement - ANSWER-acquisition of goods, services or works from an outside
external source
define human resources Management - ANSWER-involved in recruiting, hiring, training,
developing, compensating and firing
define Technological Development - ANSWER-pertains to the equipment, hardware,
software, procedures and technical knowledge used by the firm
What is the concept of the invisible hand in? - ANSWER-Wealth of Nations by Adam
Smith
5 factors of production - ANSWER-land and natural resources, labor, capital,
entrepreneurship, knowledge
,most important factors of production right now? - ANSWER-euntrepeunorship and
knowledge
define demand - ANSWER-relationship between the amount of product consumers will
purchase and the price for which it is sold
why is demand downward sloping? - ANSWER-people buy when the price is lower.
More people value a product at a lower cost than those that value it at a high price.
define supply - ANSWER-The relationship between the amount of product sellers will
produce and the price for which it is sold
why is supply upward sloping - ANSWER-You have to spend more to produce more. As
production increases, cost increases
define infrastructure - ANSWER-consists of activities such as accounting, legal, finance,
control, public relations, quality assurance and general (strategic) management
value chain example: Fen Side Golf Course is an internationally known Scottish golf
facility. It is not just an eighteen hole world-class golf course, it has a five star hotel with
250 luxury rooms, and private leisure centre, indoor tennis courts, as well as a series of
top-class restaurants.
A. All staff are trained to the highest industry standards.
B. The hotel management team focus on goals set out in their strategic plan.
C. All golf course fairways are trimmed and watered daily.
D. Fresh fruit and vegetables are delivered and prepared every day.
E. The hotel has an advanced room reservation system.
F. Fen Side is promoted through magazines targeted at the wealthy and influential.
G. The whole experience is based upon high quality, professional service at every
stage.
H. Limousines are available to take guests to airports as they finish their stay.
I. Fen Side has a series of contracts with suppliers of - ANSWER-a. human resources
b. infrastructure
c. services
d. inbound logistics
e. technology
f. marketing
g. operations/Human Resources/Marketing- basically everyone
h. Outbound Logistics/service/procurement has to rent limousines/operations
I. Procurement/inbound logistics, marketing decides too
define value chain - ANSWER-set of activities that let firms produce, sell, and support
the goods and/or services that generate its profits
define nonprofit organization - ANSWER-One that doesn't make money or charge for its
services? They generate revenue but not profit. They see gaps between revenue and
,cost.Nonprofits often do make money, but they take that money and use it to advance a
cause or to improve their business
Pros and cons of working at or running a nonprofit as opposed to a for-profit business? -
ANSWER-Benefit society and feel good about what you're doing, satisfied taking a
lower salary
define goods - ANSWER-tangible products
define services - ANSWER-intangible products
Right now, is the US economy more into goods or services? - ANSWER-services
because its now cheaper to produce goods in other countries
what percent of the economy comes from services? - ANSWER-80%
define risk - ANSWER-dictionary: possibility of loss or injury
finance: the chance that an investment's actual return will be different than expected
Suppose you invent a solar-powered car that costs $10,000 per car to make, and you
are the only manufacturer. How much would you charge? - ANSWER-You have to
figure what most people can afford. Advertise how much people will be saving on gas
by using the car
entrepreneurship vs. employment pros and cons - ANSWER-euntrepeunorship
pros: Chance for larger profit, make your own business decisions
cons: Risky, might not get a salary for a while during company start up, no benefits and
perks, responsible if fails
employment
pros: Steady income, reliable, benefits and perks, hours, low liability
cons: low upside, expandable, boss, less control
what is the primary purpose of most businesses? - ANSWER-profit
what type of relationship do risk and profit have? - ANSWER-positive
what is the role of the law in the market? - ANSWER-prevent fraud, protect the honest
types of costs? - ANSWER-accounting, opportunity, economic
Accounting cost - ANSWER-the monetary value of resources used
Opportunity cost - ANSWER-the benefit that must be given up to use a resource in one
activity as opposed to its most beneficial alternative
, Economic cost - ANSWER-accounting cost plus opportunity cost
define equilibrium - ANSWER-the price at which the quantity demanded equals the
quantity supplied
relationship between inflation and money supply - ANSWER-if there is more money in
the economy, the spending power of money in the economy decreases
higher interest rates means - ANSWER-less borrowing by businesses and more saving
by individual
lower interest rates means - ANSWER-more borrowing by businesses and more
spending by individuals
define capitalism - ANSWER-economic system based on free market enterprise, all or
most of the factors of production and distribution are privately owned and operated for
profit
define socialism - ANSWER-economic system based on social ownership and control of
enterprise
what happens if the price is higher than equilibrium? - ANSWER-surplus of goods
what happens if the price is lower than equilibrium? - ANSWER-shortage of goods
types of competition - ANSWER-perfect competition, monopolistic competition,
oligopoly, monopoly
perfect competition - ANSWER-identical sellers and product, no one can unilaterally
influence price, example: steel
Monopolistic competition - ANSWER-large number of sellers, products perceived as
different, examples: fast food
Oligopoly - ANSWER-a few sellers, each with market power, examples: auto
manufacturers, airlines (few sellers can charge whatever they want, little competition)
Monopoly - ANSWER-one seller with total control over price and quantity, example:
Power companies in some areas- a natural monopoly (gov regulates to reduce amount
of power lines)
Microeconomics - ANSWER-the study of markets and individuals and organizations
acting within markets
