29) Customer relationship management initiatives use technology to coordinate all
customer-facing activities (such as marketing, sales calls, distribution, and after-sales support) and the design and production activities necessary to get products to customers. Answer: TRUE
Diff: 2 Objective: 3
AACSB: Analytical thinking
30) The supply chain describes the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers. Answer: TRUE
Diff: 2 Objective: 3
AACSB: Analytical thinking
31) The supply chain always occurs within a single organization. Answer: FALSE
Explanation: The supply chain can include organizations external to a single organization.
Diff: 1 Objective: 3
AACSB: Analytical thinking
32) Distribution refers to promoting and selling products or services to customers or prospective customers. Answer: FALSE
Explanation: Marketing refers to promoting and selling products or services to customers or prospective customers.
Diff: 1 Objective: 3
AACSB: Analytical thinking
33) The design of products, services, and processes component of the supply chain refers to the detailed planning, engineering, and testing of products and processes. Answer: TRUE
Diff: 2 Objective: 3
AACSB: Analytical thinking
34) Management accountants might provide information on decisions on whether to buy a product from outside or manufacture it in-house. Answer: TRUE
Diff: 1 Objective: 3
AACSB: Analytical thinking
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35) The parts of the value chain associated with producing and delivering a product or service–production and distribution–are referred to as the supply chain. Answer: TRUE
Diff: 2 Objective: 3
AACSB: Analytical thinking
36) Value chain refers to its value to the employee. Answer: FALSE
Explanation: Value chain refers to its value to the customer.
Diff: 1 Objective: 3
AACSB: Analytical thinking
37) Managers track the costs incurred in each value-chain category is to reduce costs and to improve efficiency. Answer: TRUE
Diff: 1 Objective: 3
AACSB: Analytical thinking
38) Competitive information serves as a benchmark that managers use to continuously improve their operations. Answer: TRUE
Diff: 1 Objective: 3
AACSB: Analytical thinking
39) Increased global competition is placing pressure on companies to reduce costs. Answer: TRUE
Diff: 1 Objective: 3
AACSB: Analytical thinking
40) The increasing pace of technological information has resulted in longer product lifecycles. Answer: FALSE
Explanation: The increasing pace of technological information has resulted in shorter product lifecycles.
Diff: 2 Objective: 3
AACSB: Application of knowledge
41) Managers rely on management accounting information to evaluate alternative investment
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and R&D decisions. Answer: TRUE
Diff: 1 Objective: 3
AACSB: Analytical thinking
33
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42) Classify each cost item into one of the business functions of the value chain, either (1) R&D, (2) design, (3) production, (4) marketing, (5) distribution, or (6) customer service. Item:
a. cost of samples mailed to promote sales of a new product b. labor cost of workers in the manufacturing plant
c. bonus paid to a person with a 90% satisfaction rating in handling customers with complaints
d. transportation costs for shipping products to retail outlets Answer: a. (4) marketing b. (3) production c. (6) customer service d. (5) distribution
Diff: 3 Objective: 3
AACSB: Application of knowledge
43) Classify each cost item of Ripon Printers given below into one of the business functions of the value chain, either (1) R&D, (2) design of products and processes, (3) production, (4) marketing (including sales), (5) distribution, or (6) customer service. Item:
a. cost of customer order forms
b. cost of paper used in manufacture of books c. cost of paper used in packing cartons to ship books d. cost of paper used in display at national trade show
e. depreciation of trucks used to transport books to college bookstores f. cost of the wood used to manufacture paper
g. salary of the scientists attempting to find another source of printing ink h. cost of designing the book size so that a standard-sized box is filled to capacity Answer:
a. (4) marketing (including sales) b. (3) production c. (5) distribution
d. (4) marketing (including sales) e. (5) distribution f. (3) production
g. (1) research and development h. (2) design of products and processes
Diff: 3 Objective: 3
AACSB: Application of knowledge
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44) Describe the value chain and how it can help organizations become more effective. Answer: A value chain is a sequence of business functions whose objective is to provide a product to a customer or provide an intermediate good or service in a larger value chain. These business functions include R&D, design, production, marketing, distribution, and customer service.
An organization can become more effective by focusing on whether each link in the chain adds value from the customer's perspective by focusing on the organization's objectives.
Diff: 2 Objective: 3
AACSB: Application of knowledge
45) Value chain and classification of costs, car company. General Motors incurs the following costs:
a. Electricity costs for the plant assembling the Chevrolet Camaro b. Transportation costs for shipping the Camaro to dealers c. Payment to Shelby Designs for the design of the Camaro. d. Salary of an engineer working on the next generation of Camaros e. Cost of GM employees' visit to an auto show to demonstrate the Camaro f. Testing the Camaro at the GM track
g. Payment to television network for running Camaro advertisements
h. Cost of brake pads purchased from outside supplier to be installed on the Camaro
Required:
Classify each of the cost items (a-h) into one of the business functions of the value chain. 1) Research and development 2) Design of products and processes 3) Production
4) Marketing and sales 5) Distribution 6) Customer service Answer: a. 3) Production b. 5) Distribution
c. 2) Design of products and processes d. 1) Research and development e. 4) Marketing and sales
f. 2) Design of products and processes g. 4) Marketing and sales h. 3) Production
Diff: 3 Objective: 3
AACSB: Application of knowledge
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