Free CPA-Business Exam Braindumps (page: 56)

Page 56 of 132

Which of the following is not considered a factor that increases the bargaining power of the customer?

  1. Much information is available to the customer to compare and contrast features of all products on the market.
  2. One group of customers makes up a large volume of the firm's business.
  3. Buyers have low switching costs of changing products.
  4. The firm is unable to change suppliers easily.

Answer(s): D

Explanation:

Choice "d" is correct. When a firm is unable to change suppliers easily, that is a factor that increases the bargaining power of the suppliers.
Choices "a", "b", and "c" are incorrect because they all are factors that increase the bargaining power of the customer, which are:

•Customers make up a large volume of a firm's business.
•There is much information available to customers.
•The buyers have low switching costs.
•There are a high number of alternate suppliers.



When do cost leadership strategies fail?

  1. Buyers have large amounts of bargaining power in the market.
  2. Heavy price competition exists in the market.
  3. Buyers become less price sensitive and start to have brand loyalty.
  4. New entry firms are able to influence buyers to switch to their product by cutting the price of their product for a period of time in an effort to gain market share and increase profits.

Answer(s): C

Explanation:

Choice "c" is correct. If firms overlook the fact that few customers care about the fact that a product is priced lower than others and care more about brand loyalty, cost leadership strategies will fail.
Choices "a", "b", and "d" are incorrect, as these are all situations in which cost leadership strategies work well.



Which of the following is not correct regarding best cost provider strategies?

  1. The overall lowest cost in the industry is not a viable option in best cost strategies because the firm could not compete profit-wise with its differentiation strategy component.
  2. When generic products are not acceptable to buyers, yet they still remain price sensitive to the value they are receiving for their money, the best cost strategy may work well.
  3. The best cost strategy is a combination of the benefits of the cost leadership and differentiation strategies.
  4. The best cost strategy strives to have the firm evaluate and change its value chain such that it can achieve the highest cost among its closest competitors with a quality differentiated product in an effort to obtain the highest profits.

Answer(s): D

Explanation:

Choice "d" is correct because it is not a correct statement. The best cost strategy strives to have the firm evaluate and change its value chain such that it can achieve the lowest (not highest) cost among its closest competitors while matching them on the features desired by consumers.
Choices "a", "b", and "c" are incorrect, as they are all true statements regarding best cost provider strategies.



Considering the SCOR Model of supply chain operations, which of the following key management processes does managing accounts receivable and collections from customers fall into?

  1. Plan.
  2. Source.
  3. Make.
  4. Deliver.

Answer(s): D

Explanation:

Choice "d" is correct. The "deliver" process encompasses all the activities of getting the finished product into the hands of the ultimate consumers to meet their planned demand. Managing accounts receivable and collections from customers falls into the "deliver" process.
Choices "a", "b", and "c" are incorrect, per the above Explanation.



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