BSG Comprehensive Exam Correct
Questions And 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?
Correct Answers 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 Answers 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
Answers 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 Answers 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 Answers 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 Answers 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 Answers 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 Answers 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 Answers 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 Answers 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 Answers 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 Answers 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 Answers 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
Questions And 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?
Correct Answers 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 Answers 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
Answers 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 Answers 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 Answers 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 Answers 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 Answers 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 Answers 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 Answers 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 Answers 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 Answers 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 Answers 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 Answers 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
