Who are the four business players in the Value Net? Select ALL that apply.
Answer(s): A,C,E,F
The Value Net consists of suppliers, customers, competitors, and complementors. Unlike a supply chain, which focuses on material and information flow, the Value Net is about creating business value.Supplier: Provides goods/servicesCustomer: Purchases goods/servicesCompetitor: Competes in the same marketComplementor: A business that enhances your product/service offering Buyer and distributor are not primary players in the Value Net. (See LO 1.2, p.31)
A jewelry manufacturer has recently acquired the mining company that supplies the precious metals used in its jewelry production.What is this an example of?
Answer(s): D
Backward vertical integration occurs when a company acquires a supplier or producer that is further upstream in the supply chain. In contrast, forward vertical integration happens when a company buys a retailer or distributor further downstream.Note: Forward horizontal and backward horizontal integration do not exist--these are trick options.(See LO 1.2, p.42)
Jed is the Operations Manager at a cake manufacturer and is trying to determine the optimum capacity of the factory.Which of the following would be true if the factory achieves optimum capacity? Select ALL that apply.
Answer(s): B,C
Optimum capacity is achieved when:Customer demand is met (B)Production costs are minimized (C)Incorrect options:(A) is false because optimum capacity isn't necessarily the physical limit (D) is false because the factory should be operating at a profit, not breakeven (E) is false because the lowest cost per unit is achieved, not the highest (F) is false because inventory levels should be minimized, not maximized (to reduce storage costs) (See LO 1.3, p.46)
Which of the following are examples of Linear Programming (LP) solvers? Select ALL that apply.
Answer(s): A,B,C,D
Excel, Lindo, MATLAB, and CPLEX are all real Linear Programming (LP) solvers used for optimization problems.LPX is made up--it does not exist. (See LO 1.3, p.47)
Giant Gyms is a fitness chain where clients pay a monthly subscription for full access to gym facilities. The company typically experiences a huge spike in new memberships in January due to New Year's fitness resolutions. However, to reduce this seasonal surge, Giant Gyms introduces a pricing structure that makes it cheaper to sign up in November, which is typically its slowest month.What is this strategy called?
Answer(s): B
Demand smoothing attempts to influence customer behavior to balance demand fluctuations. Giant Gyms wants more customers in November rather than in January, preventing seasonal peaks and troughs.Note:Lead Strategy = expanding capacity before demand increases Capacity Expansion = increasing production abilityOptimal Capacity = achieving the best cost-to-production ratio (See LO 1.3, p.55)
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