Professional Documents
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2. True or False: Hiring the Needed Complement will always eliminate a Second Shift.
A. True
B. False
Hiring the Needed Complement eliminates all Overtime. The Second Shift workers are paid the same
as workers on Overtime, however, Second Shift workers are more efficient and do not seek work
elsewhere, therefore reducing turnover.
4. True or False: Increasing Capacity tends to reduce the number of workers on Second Shift.
A. True
B. False
Increasing Capacity tends to reduce the number of workers on the Second Shift. As an example, a
production order of 1,200 units on a line with a Capacity of 800 units (numbers in thousands) will
require 400 units to be produced by the Second Shift. Increasing Capacity to a total of 1,000 units will
result in 1,000 units manufactured by First Shift labor, and only 200 units produced by more expensive
Second Shift labor.
5. True or False: Increasing Training Hours tends to both increase and decrease the Needed
Complement.
A. True
B. False
In the short term, increasing Training Hours will increase the Needed Complement-- Workers are
taken off the production line and put in the classroom. However, as time goes on, investing in Training
Hours increases worker productivity, and therefore tends to decreases the Needed Complement.
6. _________ are incurred when production runs increase and teams match hiring to Needed
Complement.
A. Separation costs
B. Recruiting costs
C. Overtime costs
D. Training costs
Increasing production and then matching the Needed Complement will result in new hires, and
therefore increase Recruiting Costs.
7. Assuming the Productivity Index is greater than 100%, adding Overtime will ____________ the
Productivity Index.
A. Increase
B. Decrease
C. Not change
While the Productivity Index can never fall below 100%, it is possible for teams to increase the Index
by investing in a higher quality of worker (Recruiting Spend) and in education (Training Hours).
However, scheduling Overtime will decrease the Index because workers will become tired and
disgruntled.
TQM
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1. True or False: Diminishing returns will occur when investing in the same TQM Initiative round after
round.
A. True
B. False
With sufficient investment, initiatives will improve processes and quality to the greatest extent
possible, however, each initiative will reach a point where no further improvement is possible,
therefore the investments create no additional returns.
2. True or False: According to the S-Shaped curve, diminishing returns for a single year budget
become noticeable at $2,000,000.
A. True
B. False
The S-Shaped curve predicts return on investment. Depending on the slope of the curve, the return on
investment can be small or large. For example, suppose a project is budgeted at $500,000. This project
might go through a planning stage that produces a set of recommendations, but there is no money left
to implement the recommendations. At $1,000,000, sufficient funds are available to plan, and begin
implementing the recommendations. At $1,500,000, the budget is sufficient to plan and put in place
most of the recommendations. At $2,000,000, all of the recommendations have been implemented, and
additional money beyond that level has little or no effect.
3. True or False: If a company with low automation wanted to invest in a single area that exclusively
lowers labor costs, they would select QIT (Quality Initiative Training).
A. True
B. False
The TQM area allows teams with an established strategy to invest in areas, which will benefit them
the most. For example, if a team formulates a strategy that sacrifices labor cost so it can complete
R&D projects faster, it would want to invest in QIT, which reduces labor costs.
4. True or False: The exact outcome of TQM efforts appear on the TQM Report, and as bar charts on
the TQM spreadsheet. These results are for the previous round only, assuming no additional
investment is made.
A. True
B. False
TQM investments take effect the year they are made, and are cumulative, paying off year after year.
MARKETING MODULE
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1. True or False: Forecasts are set on the Marketing Budget Detail spreadsheet.
A. True
B. False
When the Advanced Marketing Module is activated, marketing activities are divided between two
spreadsheets. Prices and forecasts are entered on the Pricing & Forecasting spreadsheet.
2. True or False: Each market segment responds to different types of media (e.g. print, direct mail,
etc.) to a varying degree. It follows that each product must be identified with its target segment.
Product target segments are identified by their placement on the Perceptual Map.
A. True
B. False
The Marketing Budget Detail includes a combo box for each product that allows teams to define the
product's target segment. If teams anticipate moving a product from one segment to another (perhaps
an R&D project completes in mid year) they can define the target segment at the beginning of the year.
4. True or False: The Marketing Budget Detail asks teams to determine budgets by product and
segment.
A. True
B. False
On the Marketing Budget Detail, the Promotion Budget Resource sections asks teams to assign
budgets by product, but the section also asks teams to assign a target segment for each product. This
facilitates products that might start the year in one segment, then as an R&D project completes, moves
to another segment. Teams can begin promoting in the new segment prior to the move. The same holds
true for a product that will have a new segment drift over it. In the Sales Budget Resource, Sales
budgets are allocated by Segment. However, Sales budgets can be fine tuned with the Product
Allocations box. For example, if teams have two products in one segment, the Product Allocations box
can be used to prioritize one product over the other.
5. In the Promotion Budget Resource, teams can select which of the following media areas.
A. Print Media and Television
B. Email and Telephone Contact
C. Trade and Road Shows
D. Web Media and Direct Mail
The scenario utilizes business to business media outlets that reach Original Equipment Manufacturers
(OEMs). Television, for example, is not an efficient way to reach OEMs.
7. In the Sales Budget Resource, the outside sales force meets with customers face-to-face. The cost of
each salesperson includes which of the following?
A. Salary and commission
B. Travel and Support
C. None of the above
D. Both A and B
Each salesperson costs $125,000, which includes salary, commission, travel and support.
LABOR QUIZ
1. True or False: The new contract that you negotiate with Labor will take affect starting January 1st of
the year the contract is renegotiated.
A. True
B. False
2. True or False: Generally speaking, a team with high levels of automation would be inclined to Make
a "low ball" offer to the unions in order to further lower costs.
A. True
B. False
5. Suppose workers earn $20.00 in the current contract. There are only two teams, Andrews and
Baldwin. Labor demands $22.00. Andrews gives its negotiators a range of $23.00 to $25.00. Baldwin
gives its negotiators a range of $20.20 to $22.20. Will Labor strike:
A. Andrews
B. Baldwin
C. Both
D. Neither
6. In the current contract, the workers wage rate is $20.00. Which of the following negotiation ranges
would be outside the rules?
A. $18.00 to $18.00
B. $15.60 to $16.80
C. $30.20 to $32.20
D. $30.00 to $32.00
E. Both B and C would be outside the rules.
7. There are two teams, Andrews and Baldwin. As a result of an earlier labor negotiation, Andrews
workers earn $20.00. Baldwin workers earn $22.00. What will Labor demand?
A. Andrews $22.00. Baldwin $24.20.
B. Andrews $24.20. Baldwin $24.20.
C. Andrews $24.20. Baldwin $22.00.
D. Andrews $24.00. Baldwin $24.00
E. None of the above.