Which of the following are examples of investment appraisal techniques? Select ALL that apply.
Answer(s): C,D,E
Investment appraisal techniques help assess whether an investment, such as purchasing new machinery, is financially viable. Return on investment, cash flow impact, and payback period are all investment appraisal methods. Liquidity and gearing assess financial health but do not determine whether to make an investment. (See p.160)
XYZ Ltd is a perfume manufacturer based in France. They have created a new perfume and research has shown that demand for the perfume will outstrip supply. The Chief Operating Officer (COO) and the Chief Financial Officer (CFO) are meeting to discuss this. The COO believes that the organisation needs to reallocate resources in order to meet demand. Are there any exceptions to when this may be the case?
Answer(s): C
While organisations generally try to fulfil customer demand, there are times when they strategically choose not to. A common reason is maintaining a premium image--limiting supply can increase desirability and justify a higher price. For example, luxury brands often limit product availability. (See p.169)
Which of the following principles considers the volume of work undertaken by a given resource within an organisation?
Answer(s): D
Loading refers to allocating work to a person or machine--essentially "loading" them with tasks. It helps determine workload distribution for maximum efficiency. (See p.180)
Zelda is the Head Consultant at Pirate Architects Ltd, which provides services to clients in the construction industry. She has a team of 20 consultants and is considering how many projects each team member should handle. In terms of capacity loading, which factors should Zelda consider when assigning projects? Select ALL that apply.
Answer(s): A,B,D,E
Capacity loading determines how much work each employee can handle. Key factors include experience, efficiency, time availability, and effectiveness. Salary is not relevant to determining workload capacity--though managers might mistakenly believe higher-paid employees should take on more. (See p.181)
LTL Ltd is a manufacturing organisation producing made-to-order equipment for the construction industry, such as bespoke windows and doors. The Head of Operations has received four large orders and is considering the sequencing of production. Which of the following should the company do?
Sequencing involves balancing logic, cost, and speed to optimise production. Prioritising orders purely by arrival time (Option A) or cost efficiency (Option B) might not be practical. Similarly, making sure all orders finish at the same time (Option D) isn't always necessary. (See p.183)
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