Marketplace Exam UTK

Which statement below is NOT correct about overtime in the Marketplace simulation? A. If demand is greater than the available operating capacity and less than the maximum overtime allowed, only the amount required to meet demand will be used. B. If demand falls below the available operating capacity, overtime will be used during a quarter. C. If you open four hours of overtime and don't use them during that quarter, you will not have an overcapacity charge that quarter. D. If you use overtime for a quarter, the Balanced Scorecard manufacturing productivity metric will be reduced.

B. If demand falls below the available operating capacity, overtime will be used during a quarter .

At the end of Q1, you can expect to have negative profits (losses). This is because...: A. The company has not correctly designed a bike to fit the target market B. The company doesn't have any bikes to sell at the end of Q1 C. The company has borrowed too much money D. The company has held too much cash

B. The company doesn't have any bikes to sell at the end of Q1

The key to estimating demand for any given quarter is to estimate: A. The number of brands that will be produced, multiplied by the number of sales people employed for that quarter B. The number of units each sales person is likely to sell, multiplied by the number of sales people employed for that quarter C. The maximum number of units that could be produced in that quarter, minus losses due to low employee morale D. The number of brands that will be produced, multiplied by 1/5 the potential demand in each geographical sales region

B. The number of units each sales person is likely to sell, multiplied by the number of sales people employed for that quarter

In Calculating Total Performance on the Balanced Scorecard, a negative score in any category will result in.... A. emergency debt B. a total performance score of "0" C. a negative asset management score D. additional equity investment

B. a total performance score of "0"

During Q4, in what phase of the S-Curve framework is carbon fiber bicycle industry? A. introductory B. early growth C. maturity D. shakeout

B. early growth

Underestimating demand and scheduling too little operating capacity can result in all of the following EXCEPT: A. Lost sales because orders cannot be filled B. excess capacity costs (excess labor and overhead) C. use of overtime as a safety net to meet demand D. unhappy customers because orders cannot be filled

B. excess capacity costs (excess labor and overhead)

In class last week, I showed you a company that planned in Q2 for about $400,000, BUT actual sales in Q2 were $82,000. All of the following reasons could explain this difference EXCEPT ONE CHOICE below: A. too many competitors pursuing the same bike segment in the same city B. prices too low C. paying sales staff way below what others in industry are paying D. poorly designed ads E. poorly designed products

B. prices too low

All of the following elements generate demand for your products EXCEPT: A. prices that are lower than the competitor prices B. the number of printers C. salesforce compensation D. advertising spending

B. the number of printers

In the simulation, where are the bikes manufactured?

Bangalore

You have 27 total salespeople in your bricks and mortar stores. For two quarters, your salesforce productivity has remained at around 60 bikes per person. You get some market research data that leads you to believe that a competitor, who has only 21 salespeople is able to get them to sell 80 bikes per person. Your employee satisfaction score is 75.3 while theirs is 82.9. Which action below has the greatest possibily of increasing the productivity of your salespeople? (check all that apply): A. reduce operating capacity B. hire 5 sales persons C. raise prices D. copy your competitor's elements of sales force compensation

D. copy your competitor's elements of sales force compensation

The maximum number of units your production facility can produce each day with perfect efficiency is called _____; whereas _____ determines the number units that needed based on demand and the number of workers to hire, and _________ is based on the productivity of workers. A. operating capacity; fixed capacity, effective operating capacity B. fixed capacity, operating capacity; demand forecast C. demand forecast; fixed capacity, operating capacity D. fixed capacity; operating capacity, effective operating capacity

D. fixed capacity; operating capacity, effective operating capacity

You would prepare and use the ______________ to project the company's revenues, expenses, and funding requirements into the future. A. statement of cash flow B. balance sheet C. income statement D. Pro forma statements

D. pro forma statements

At the outset of your business, the single most important set of decisions your team will make involves defining your ____. A. target markets B. bycicle design C. mission statement D. strategic direction

D. strategic direction

At the end of the 4th quarter, the company will be able to borrow money from the bank. The Line of Credit from the bank is a function of which of the following elements? A. the pro-forma income statement and the pro-forma balance sheet B. return on investment and return on assets C. the current ratio and the profit margin D. At the end of the 4th quarter, the company will be able to borrow money from the bank. The Line of Credit from the bank is a function of which of the following elements?

D. the equity of the firm minus any current debt

T/F In all quarters of Marketplace, pricing bikes below costs is the best way to gain sales in Marketplace.

False

T/F Salary is always the most important component of the compensation package.

False

T/F You will design different ads for the web than the ones you've designed for magazines.

False

How much money was invested in the company in Quarter 1 of the simulation

1,500,000

If the company deposits money in a certificate of deposit in the simulation, what is the quarterly interest rate it will receive?

1.5%

In Quarter 4 of the simulation, how much money did the company raise from outside investors?

2,500,000

What is the minimum amount of money that should be in the cash account in the financial projections in the simulation?

300,000

What is a typical rebate range?

50-100

How much money was invested in company in Quarter 3

500,000

What are the two most influential measures in the Balanced Scorecard? (Check two): A. Financial Performance B. Financial Risk C. Asset Management D. Investment in the Future

A. Financial Performance B. Investment in the Future

If you invest in additional fixed capacity in Quarter 2, when will you be able to start using those new machines to produce additional bike units? A. Quarter 3 B. Quarter 2 C. Quarter 4 D. Quarter 5

A. Quarter 3

When designing ads, you have the option to claim your company has the "Highest rated" bike in any segment (Rec, Mtn, or Spd). Which of the following must be true in order to make this claim? A. The brand must have been the highest rated in the corresponding segment (Rec, Mtn, Spd) in the previous quarter B. The brand must have been the highest rated in the corresponding segment (Rec, Mtn, Spd) in all prior quarters C. The brand must have had the highest gross profit in the previous quarter D. The company must have sold the most bikes in the previous quarter

A. The brand must have been the highest rated in the corresponding segment (Rec, Mtn, Spd) in the previous quarter

Suppose that your team is struggling to generate demand each quarter. Which of the following actions is LEAST LIKELY to have a positive impact on generating demand? A. improve total compensation package for production workers B. improve advertisements C. offer more competitive prices D. improve total compensation packages of sales employees

A. improve total compensation package for production workers

A useful method to track expenses related to your brands is called Activity Based Costing or ABC. Certain costs are allocated across the firm while others should be tracked to the profitability of each brand. Which of the following costs should be tracked to the brand as an ABC method (check all that apply): A. New features (R&D) B. production costs C. interest expense D. material costs

A. new features (R&D) B. Production costs D. Material costs

Hypothetical example (but your group can calculate these numbers for your team and universe): Your business analytics team member calculates that from Q2 to Q4, for every 1% decrease in price in Recreation bikes, the quantity sold increases by 8%, whereas every 1% decrease in price in speed bikes increases the quantity sold by only 1%. Thus, you could correctly state (select best answer): A. the recreation bike segment has more elasticity in demand than the speed bike segment B. cannot determine from this comparison C. The speed bike segment has more elasticity in demand than recreation bike segment. D. The bike's segment as compared to the speed segment is more inelastic.

A. the recreation bike segment has more elasticity in demand than the speed bike segment

In the simulation, what is a business advantage of using 3-D printing technology for manufacturing bikes

the sales outlets can operate without inventory

What is the purpose of a pro forma financial statement?

to estimate the future performance of a company

What is the purpose of a balanced scorecard?

to measure the overall performance of a company

True or false? Customers buy benefits, not components or features

true

True or false? In the fourth quarter of the simulation, venture capital was available to fund research and development projects.

true

True or false? In the simulation, the interest for a bank loan is determined by the amount of debt capacity already utilized.

true

Which indicator on the balanced scorecard is a measure of the executive team's success in adding value to the initial stockholder investments?

wealth

T/ F In Internet Marketing, the most relevant keywords to each of your target segments can be applied to both your paid advertising AND to your webpages.

True

T/ F. If your team does not have a clear strategic direction established by Quarter 4, your team will probably not have an opportunity to catch up with the leading firms in the industry.

True

T/F In the Marketplace game, operating capacity takes into account worker productivity (i.e., loss due to not being 100% productive), thus in Q2 the operating capacity is lower than fixed capacity.

True

The simulated business received investment from outside investors. Which other source of funding was available to the company in Quarter 4?

a conventional bank loan

What is a category of information that is found in a company's income statement?

gross profit

In the simulation, which stage of the product life cycle is the industry currently in?

introduction

In the simulation, how can overtime pay be useful for the business?

it can increase operating capacity if demand exceeds projections

A balanced scorecard (BSC) is used to measure the performance of the simulated business. Which indicators are used in the calculation of the BSC? Choose all that apply.

manufacturing productivity, financial performance, adsset management

Which information should be considered when making price and priority decisions in the simulation?

price willing to pay, cost of production

In the simulation, which information does marketing research include? Choose all that apply.

price willing to pay, market potential, customer needs

In the simulation, what does a stockout indicate?

production was unable to meet demand

In the simulation, how did the company raise 500,000 in Quarter 2?

sell stock to the executive team

Which market segment in the simulation has the highest "price willing to pay"?

speed

Employees designated as Service people will spend ___________ of their time servicing products and __________ of their time selling. A. 100%, 0% B. 50%, 50% C. 70%, 30% D. 95%, 5%

C. 70%, 30%

To improve Financial Performance on the Balanced Scorecard, the management team could (Check all that apply): A. Only open bricks and mortar stores B. Hire 25 sales people for web store by the 5th quarter C. Increase Gross Profit of all brands D. Minimize the total number of shares outstanding

C. increase gross profit of all brands D. minimize the total number of shares outstanding

The best ads... A. are long and list a lot of benefits B. come from companies with the largest advertising budgets C. Prioritize content D. are designed to appeal across all three segments

C. prioritize content

The primary objective of the Brand Management effort in Marketplace is to...: A. Give you experience in the study and evaluation of market opportunities B. Introduce you to some of the trade-offs inherent in production planning, and to see how they relate to the broader strategic decisions of the firm C. Force you to think through the tradeoffs inherent in advertising and promotion planning, to see how advertising relates to the broader strategic decisions of the firm D. Help you understand the relationship between the abstract benefits sought by customers and the physical components included in the brands designed by your firm.

D. Help you understand the relationship between the abstract benefits sought by customers and the physical components included in the brands designed by your firm.

When a company is the first to bring new research and development (R&D) features to market in their brand designs: A. That company has sustainable competitive advantage B. That company must incorporate the new R&D into all of its existing brands C. That company's brand judgments will likely increase, but there will be no impact on competitors' brand judgments D. That company's brand judgments will likely increase, and it may capture more market share

D. That company's brand judgments will likely increase, and it may capture more market share

A firm is _________ if its cumulative losses exceed its common stock investment. A. a new entrant B. cost-cutting C. lucky D. bankrupt

D. bankrupt

When does the company go to the test market in the simulation?

Quarter 2-

What is a category of information that is found in a company's balance sheet?

current assets

In the simulation, what do stockouts cause in the next quarter?

customer ill will

True or false? Operating capacity should be higher than fixed capacity.

false

True or false? The company needs to have positive retained earnings by Quarter 3 of the simulation.

false

Which indicator on the balanced scorecard measures the executive team's ability to manage debt as a resource?

financial risk