Bill is a product of the Baldwin company which is primarily in the Nano segment, but is also sold in another segment.
Baldwin starts to create their sales forecast by assuming all policies (R&D, Marketing, and Production) for all
competitors are equal this year over last. For this question assume that all 1127 of units of Bill are sold in the Nano
segment. If the competitive environment remains unchanged what will be the Bill product’s demand next year (in
000’s)?
Select: 1
1127
1284
1205
2568
Investing $2,000,000 in TQM’s Channel Support Systems initiative will at a minimum increase demand for your
products 1.7% in this and in all future rounds. (Refer to the TQM Initiative worksheet in the CompXM.xls Decisions
menu.) Looking at the Round 0 Inquirer for Andrews, last year’s sales were $163,290,917. Assuming similar sales
next year, the 1.7% increase in demand will provide $2,775,946 of additional revenue. With the overall contribution
margin of 34.1%, after direct costs this revenue will add $946,598 to the bottom line. For simplicity, assume that the
demand increase and margins will remain at last year’s levels. How long will it take to achieve payback on the initial
$2,000,000 TQM investment, rounded to the nearest month?
Select: 1
17 months
25 months
TQM investment will not have a significant financial impact
9 months
Looking forward to next year, if Baldwin’s current cash balance is $19,378 (000) and cash flows from operations next
period are unchanged from this period and Baldwin takes ONLY the following actions relating to cash flows from
investing and financing activities:
Issues 100 (000) shares of stock at the current stock price
Issues $200 (000) of long-term debt
Pays $40 (000) in dividends
Which of the following activities will expose Baldwin to the most risk of needing an emergency loan?
Select: 1
Purchases assets at a cost of $15,000 (000)
Liquidates the entire inventory
Retires $20,000 (000) in long-term debt
Sells $5,000 (000) of their Long-term assets
A productivity index of 110% means that a company’s labor costs would have been 10% higher if it had not made
production improvements. Now refer to the Income Statement in Chester’s Annual Report. The direct labor costs for
Chester were $32,558. These labor costs could have been $20,000 higher if investments in training that increased
productivity had not been made. What was the productivity index for Chester that led to such savings?
Select: 1
155.3%
38.6%
44.7%
161.4%
Brand managers know that increasing promotional budgets eventually result in diminishing returns. The first one
million dollars typically results in a 26% increase in awareness, while the second million results in adding another
18% and the third million in a 5% increase. Andrews’s product Axe currently has an awareness level of 77% . While
an important product for Andrews, Axe’s promotion budget will be reduced to one million dollars for the upcoming
year. Assuming that Axe loses one-third of its awareness each year, what will Axe’s awareness level be next year?
Select: 1
52%
73%
57%
78%
Bill’s product manager continues to perform well in the market. However, a competing product is coming on strong
and is looking to take over as the market share leader in the segment. Without sacrificing contribution margin, what
can the Bill product manager do in order to improve upon the buying criteria, and thus potentially increase demand?
Select: 1
Lower the selling price since it is the second most important buying criteria
Increase the promotion budget to gain greater awareness
Reposition Bill to make it even smaller and higher performing
Increase MTBF by 2000
Assuming no direct factory overhead costs (i.e., inventory carry costs) and $3 million dollars in combined promotion
and sales budget, the Daft product manager wishes to achieve a product contribution margin of 35%. Given their
product currently is priced at $35.00, what would they need to limit the material and labor costs to?
Select: 1
$21.00
$23.00
$22.75
$24.50
According to information found on the production analysis page of the Inquirer, Baldwin sold 1127 units of Bill in the
current year. Assuming that Bill maintains a constant market share, all the units of Bill are sold in the Nano market
segment and the growth rate remains constant, how many years will it be before Bill will not be able to meet future
demand unless the company adds production capacity? Exclude any existing inventory.
Select: 1
2 year(s)
1 year(s)
4 year(s)
3 year(s)
Which description best fits Andrews? For clarity:
– A differentiator competes through good designs, high awareness, and easy accessibility.
– A cost leader competes on price by reducing costs and passing the savings to customers.
– A broad player competes in all parts of the market.
– A niche player competes in selected parts of the market.
Which of these four statements best describes your company’s current strategy?
Select: 1
Andrews is a broad cost leader
Andrews is a broad differentiator
Andrews is a niche differentiator
Andrews is a niche cost leader
