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| 1 | |
ChemCo produces chemicals for use in the manufacture of agricultural chemicals and fertilisers. The cost management personnel have just completed a customer profitability analysis at the request of the marketing director. The following information forms the basis for the analysis: Customer-related activities | Cost driver | Cost per unit of activity driver | Sales activity | Sales visits | $1000 per sales visit | Order taking | Purchase orders | 250 per order | Special handling | Kilograms handled | $10 per kilogram | Special shipping | Shipments | $800 per shipment |
Cost driver data for two of ChemCo’s major customers for the most recent year are as follows: Customer-related activities | AgriGrow | FertiGyp | Sales activity | 10 sales visits | 4 sales visits | Order taking | 6 purchase orders | 25 purchase orders | Special handling | 10000 kilograms handled | 5000 kilograms shipped | Special shipping | 10 shipments | 3 shipments |
The following data relate to the two same customers:
| AgriGrow | FertiGyp | Sales revenue | $560 000 | $360 000 | Cost of goods sold | 360 000 | 180 000 | General selling costs | 65 000 | 50 000 | General administrative costs | 35 000 | 30 000 |
The customer profitability of AgriGrow is: |
| | A) | $200 000 |
| | B) | $180 000 |
| | C) | $100 000 |
| | D) | $15 000 |
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| 2 | |
ChemCo produces chemicals for use in the manufacture of agricultural chemicals and fertilisers. The cost management personnel have just completed a customer profitability analysis at the request of the marketing director. The following information forms the basis for the analysis: Customer-related activities | Cost driver | Cost per unit of activity driver | Sales activity | Sales visits | $1000 per sales visit | Order taking | Purchase orders | 250 per order | Special handling | Kilograms handled | $10 per kilogram | Special shipping | Shipments | $800 per shipment |
Cost driver data for two of ChemCo’s major customers for the most recent year are as follows: Customer-related activities | AgriGrow | FertiGyp | Sales activity | 10 sales visits | 4 sales visits | Order taking | 6 purchase orders | 25 purchase orders | Special handling | 10000 kilograms handled | 5000 kilograms shipped | Special shipping | 10 shipments | 3 shipments |
The following data relate to the two same customers:
| AgriGrow | FertiGyp | Sales revenue | $560 000 | $360 000 | Cost of goods sold | 360 000 | 180 000 | General selling costs | 65 000 | 50 000 | General administrative costs | 35 000 | 30 000 |
The customer profitability of FertiGyp is: |
| | A) | $200 000 |
| | B) | $180 000 |
| | C) | $100 000 |
| | D) | $82 350 |
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| 3 | |
Total customer costs include: |
| | A) | manufacturing costs of the product plus customer support costs |
| | B) | product costs plus customer-driven costs |
| | C) | distribution, marketing, selling and customer support costs |
| | D) | manufacturing/operations cost of the product |
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| 4 | |
The core customer measures that apply to all organisations are: |
| | A) | market share, customer retention, customer acquisition, customer satisfaction and customer profitability |
| | B) | customer retention, customer acquisition, customer satisfaction and customer profitability |
| | C) | customer acquisition, customer satisfaction, customer profitability and market share |
| | D) | return on investment, market share and customer satisfaction |
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| 5 | |
Unit level activities are additional activities that occur due to problems related to: |
| | A) | ordering material from suppliers |
| | B) | receiving and inspecting orders |
| | C) | faulty quality or late delivery of materials by suppliers |
| | D) | scrap and reworking |
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| 6 | |
Most businesses with JIT systems also have: |
| | A) | total quality management (TQM) programs |
| | B) | customer relationship management (CRM) systems |
| | C) | activity based costing systems |
| | D) | all of the given answers |
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| 7 | |
A pull method of coordinating production means that: |
| | A) | accurate forecasting systems are used to predict demand |
| | B) | materials are purchased only when they are needed at the next stage |
| | C) | supplier forecasts are used to accurately forecast demand |
| | D) | components are manufactured ahead of time to avoid stock-outs |
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| 8 | |
The lead time associated with inventory is the length of time between: |
| | A) | placing an order and receiving an order |
| | B) | recognising the need for a component and placing the order |
| | C) | receiving the component and using it in production |
| | D) | entering an order on the computer system and using it in production |
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| 9 | |
In Kaplan and Norton’s Core Customer Measures, market share refers to: |
| | A) | overall customer satisfaction in the market |
| | B) | the rate at which the organisation retains existing customers |
| | C) | the rate at which the organisation attracts new customers |
| | D) | the proportion of sales in a given market |
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| 10 | |
Time is an important aspect of supply chain management as: |
| | A) | time dictates the rate at which products and services are produced and revenue is generated |
| | B) | time delays often cause a build-up of inventories and associated holding costs |
| | C) | time determines how long resources are tied up during processing and therefore unavailable for other profit generating activities |
| | D) | all of the given answers |
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