ASU: SCM 300 EXAM 3 Study Guide

Tire manufacturer Firebridge sells tires to retail firm A. Average annual sales for firm A is $55,000. Average profit margin is 15%. The expected lifetime is 10 years. Using a discount rate of 15 percent, calculate the Customer Lifetime Value of firm A and choose the closest answer below: a. $5,500 b. $38,590 c. $41,405 d. $25,675

$41,405

Why do so many CRM programs fail? a. They are so expensive that it is hard to recover the investment b. They take the firm away from concentrating on their key suppliers c. Because of incompatible information and communication systems d. Firms concentrate more on the CRM software instead of taking care of customers

Firms concentrate more on the CRM software instead of taking care of customers.

(T/F) The three inputs for calculating Customer Lifetime Value are Average Annual Sales, Expected Lifetime and Forecasted Profits.

FALSE

(T/F) Until recently, CRM was not very effective for most companies because it didn't focus on building customers' trust and loyalty, or building strong relationships with customers.

FALSE

(T/F) When websites suggest other items for purchase based on already purchased items, this is an example of Clickstream Selling.

FALSE

(T/F) While a well-planned and organized CRM initiative can be extremely useful in developing effective and efficient marketing programs for retailers, they are not particularly helpful for manufacturing companies like GM since their touches with the customer are few.

FALSE

A customer's lifetime value is calculated by: a. Summing the projected annual profitability of the customer b. Summing the annual sales of the customer and then dividing by the projected lifetime c. The firm's MRP system d. Finding the NPV of a customer's projected lifetime profits for the firm

Finding the NPV of a customer's projected lifetime profits for the firm

(T/F) The use of small data makes CRM systems less successful.

FALSE

(T/F) Customer lifetime value is calculated as the net present value of an annuity.

TRUE

(T/F) A country that imposes high tariffs encourages foreign-based companies to import goods.

FALSE

(T/F) Small data is the data that was around before big data.

TRUE

The following is a term that refers to error or mistake proofing: a. Kaizen b. Muda c. Kanban d. Poka-yoke

Poka-yoke

(T/F) The European Union (EU) is considered a regional trade agreement.

TRUE

Which of the following is NOT one of the Seven Wastes? a. Excess inventory b. Environmental waste c. Waiting d. Scrap and rework

Environmental waste

Which of the following is an example of how lean programs can help to protect the environment? a. Parts made from recycled materials b. Using rubber from used tires in auto parts c. Batch size reduction to reduce plastics d. All of the above

All of the above

Regional trade agreements assist with which of the following? a. Monitor national trade policies b. Provide technical assistance for developing countries c. Provide a forum for trade negotiations d. All of these are correct

All of these are correct

Waste in Japan is also referred to as: a. Muda b. Kanban c. Poka-yoke d. Sakichi

Muda

(T/F) Once a decision on locating a facility is made, it is costly to move or shut down that facility.

TRUE

You'll rely very heavily on ________ in the Analyze stage, which distinguishes Six Sigma from other quality program. a. senior management b. rough calculations c. statistical analysis d. qualitative analysis

statistical analysis

Six Sigma is designed to guide quality efforts in every part of a business. It is based on the belief that if ________then there is less chance for defects to occur. a. management is limited b. variation can be increased c. defects are recorded d. variation can be reduced

variation can be reduced

Which contributes to improving your processes? a. Adjust operating practices and procedures. b. Have total involvement in your organization. c. Foster employee training. d. All of the above

d. All of the above

The process of Six Sigma focuses on all of the following, except: a. defects b. compensation c. the customer d. variability

compensation

(T/F) The objectives of any CRM initiative should be focused on what the company can reasonably achieve.

FALSE

Which of these is a true statement? a. Almost half the work done in service processes add no value for the customer. b. 80% of the activities cause 20% of the delay in services. c. Lean Six Sigma cannot be applied to service organizations like hospitals and purchasing departments. d. All complexity is bad.

Almost half the work done in service processes add no value for the customer.

Examples of regional trade agreements include all of the following EXCEPT: a. Association of Southeast Asian Nations (ASEAN) b. European Union (EU) c. Association of Korean Markets (AKM) d. Regional Comprehensive Economic Partnership (RCEP)

Association of Korean Markets (AKM)

A firm offers group discount for orders exceeding 15. Two firms are taking advantage of this offer. Sales to Company A average $15, 000 of annual sales, has a 22% profit margin and an expected lifetime of 8 years. Company B averages $11, 000 of annual sales, has a 25% profit margin and an expected lifetime of 9 years. Which is the more important customer based on the higher expected lifetime value? Assume a 7% discount rate. a. Company A because its' NPV = $17,917 b. Company A because its' NPV = $19,705 c. Company B because its' NPV = $21,224 d. Company B because its' NPV = $22,349

Company A because its' NPV = $19,705

Which of the following quality gurus believed that companies should strive for zero defects and that quality was, in a sense, free since quality improvement programs invariably paid for themselves? a. Juran b. Deming c. Baldrige d. Crosby

Crosby

The online retailer Ecatalog.com has decided to send consumers of the new John Grisham book an e-mail with suggestions for books with similar themes and has also offered them a 20% discount if those suggested books were purchased. This type of marketing/promotion is an example of: a. Target marketing b. Segmented selling c. Clickstream selling d. Cross-selling

Cross-selling

Which of the following are required elements of an effective CRM initiative? a. Sending out promotional materials via e-mails and traditional mail to a large random group of a potential customers b. Cross-selling customers after an initial purchase c. Preserving a traditional sales force that communicates with the supply-chain members d. All of these

Cross-selling customers after an initial purchase

Companies work very hard to reduce the number of customers who don't return. This customer defection is often referred to as: a. Customer churn b. Clickstream defection c. Balking d. Revenue Exodus

Customer churn

Which of the following customer service elements can be classified as an example of post-transaction elements? a. Salesperson politeness b. Customer complaint resolution c. Customer service policies d. The company's choice of organizational structure

Customer complaint resolution

CRM systems allow organizations to identify which customers have stopped purchasing products or services, so that the organization can target those former customers for future promotions and/or perhaps to investigate why they stopped purchasing in the first place. This CRM attribute is called: a. Customer profitability determination b. Customer-base retention initiative c. Customer defection analysis d. Customer clickstream analysis

Customer defection analysis

Users in a company can retrieve and study a large amount of information about consumers by housing that information in a centralized database that is commonly referred to as a: a. Clickstream cloud b. b. QR code site c. Data warehouse d. Social media site

Data warehouse

During the critical Define stage what does a Six Sigma team do? a. Determine what the project is and exactly what it should accomplish. b. Statistically validate the potential causes of a problem. c. Determines what data to collect and how to collect it. d. Determines training requirements for individuals.

Determine what the project is and exactly what it should accomplish.

When an organization attempts to offer the right products and services to customers at the right time through the offer of individual promotions tied to specific events like birthdays and anniversaries, this is referred to as: a. Event-based marketing b. Segmented selling c. Personal holiday marketing d. Extreme segmentation marketing

Event-based marketing

All of the following are recommended for designing and implementing a successful CRM program EXCEPT: a. Support from the firm's top executives b. Expect employees to 'learn on the job' and adapt their way of working c. Knowledge of the tools available to aid in CRM d. Continuous awareness of customers' changing requirements

Expect employees to 'learn on the job' and adapt their way of working

(T/F) A list of quality-of-life factors would most likely include proximity to customers, proximity to suppliers, tariff rates, and currency stability.

FALSE

(T/F) Continuous connectivity is desired by many users of CRM applications, however this is still something the systems can't deliver yet.

FALSE

(T/F) Customers of companies that use CRM applications, should not be concerned with their personal information becoming compromised or being shared with other companies, because of the law.

FALSE

(T/F) Exchange rates do NOT play an important role in determining the cost of production in another country.

FALSE

(T/F) Facility location has a short-term impact on the firm's supply chains.

FALSE

(T/F) Low tariffs encourage multinational corporations to set up factories to produce locally.

FALSE

(T/F) Only employees who will be entering CRM data should be involved in the CRM implementation plan.

FALSE

(T/F) Sales force automation products manage a sales person's accounts, business opportunities, and communications.

FALSE

(T/F) Segmenting customers on the basis of things like products purchased, sales history, demographic information, and desired product features can dilute the results of a CRM program.

FALSE

Which company probably played the largest role in the development of the Toyota Production System? a. General Motors b. Chrysler c. Ford d. Boeing

Ford

Efficient Consumer Response was initially developed in the 1990's for the following industry: a. Fashion b. Grocery c. Small Electronics d. Automobile

Grocery

When compared to their U.S. counterparts, a benchmarking study found that Japanese auto manufacturers used: a. Twice the manufacturing labor b. Double the manufacturing space c. Half the engineering hours to produce a new automobile model d. All of the above

Half the engineering hours to produce a new automobile model

Which of the following is NOT consistent with the lean philosophy? a. Cross-training employees to increase processing flexibility b. Developing a culture of continuous improvement within the organization c. Increasing batch sizes to take advantage of economies of scale d. Positioning WIP inventories near each processing center

Increasing batch sizes to take advantage of economies of scale.

The Five-Ss refer to: a. Overspending habits b. Keiretsu relationships c. Industrial housekeeping d. Robust evaluation techniques

Industrial housekeeping

Why might Control be considered the most important step in the Six Sigma process? a. It connects the Six Sigma program with all company efforts in quality management, engineering, and process improvement. b. In this phase, you make the improvement permanent. c. It enables you to have a continuous improvement organization. d. all of these answers

It enables you to have a continuous improvement organization.

The Quick Response program, developed in the 1980's, was an offshoot of the following supply chain concept: a. Efficient Consumer Response b. Six Sigma c. Just-in-Time d. Kaisen

Just-in-Time

Japanese manufacturing firms sometimes create cooperative coalitions with their suppliers in order to provide the suppliers with a certain degree of financial support. What are these cooperative coalitions called? a. Jidoka Networks b. Keiretsu Networks c. Kanban Networks d. Kaizen Networks

Keiretsu Networks

Your top sales executive leaves your company to work for a competitor. Fortunately, all of her notes regarding prior dealings with customers have been captured in a: a. Sales activity management system b. Sales territory management system c. Lead management system d. Knowledge management system

Knowledge management system

Which statement is true? a. Six Sigma is concerned with things like inventory and material flow, while Lean focuses on reducing variability in the process. b. Lean Six Sigma is the application of Lean principles and Six Sigma methods at the same time. c. Most companies have Lean Six Sigma experts on staff. d. There is a specific Lean Six Sigma model applied to solving company problems.

Lean Six Sigma is the application of Lean principles and Six Sigma methods at the same time.

Lean production emphasizes all of the following EXCEPT: a. Continuous improvement b. Reduction of waste c. Synchronization of material flows d. Long production runs

Long production runs

Which of the following layouts is primarily designed to process parts, components, or jobs requiring the same or similar processing steps, saving duplication of equipment and labor: a. Work centers b. Production kanbans c. Work-in-process d. Manufacturing Cells

Manufacturing Cells

The use of quick response codes (QR Codes) to retrieve marketing information is a type of: a. Geographic marketing b. Target marketing c. Customer churn d. Mobile marketing

Mobile marketing

Which tool is useful for presenting data in an organized fashion, indicating process problems from most to least severe: a. Pareto Charts b. Check Sheets c. Cause-and-Effect Diagrams d. Fishbone Diagrams

Pareto Charts

Your company allows customers to "opt-out" of receiving email advertisements. This is referred to as: a. Event-based marketing b. Permission marketing c. Customer churn d. Customer preference marketing

Permission marketing

You are a manager at Sunnydale Appliances. A customer who recently purchased a dishwasher contacts you with a problem and requests warranty information. According to the text, this is an example of: a. Probable customer churn b. Post-transaction customer service c. Transaction customer service d. Pre-transaction customer service

Post-transaction customer service

The element of a CRM program involved with the use of data-mining software and customer behavior analytics is: a. Segmenting customers b. Predicting customer behaviors c. Customer value determination d. Customer preference determination

Predicting customer behaviors

A system which allows sales managers to obtain current information and reporting capabilities regarding each salesperson's activities on each customer's account is referred to as a: a. Sales activity management system b. Sales territory management system c. Lead management system d. Knowledge management system

Sales territory management system

Which of the following is one of the most basic and important activities of CRM? a. Segmenting customers b. Cross-selling customers c. Increasing churn d. Finding customers

Segmenting customers

The 5s principle specifically defines a system for organizing and standardizing the workplace. What is NOT a 5s principle? a. Shine (keeping the work area clean) b. Sort (ensuring each item is in its proper place) c. Sequester (applying standardized processes to only a small minority) d. Set in Order (arranging tools so they are easy to find)

Sequester (applying standardized processes to only a small minority)

According to the text, which of the following would be an example of Coca-Cola's international bottling plants, each serving a small geographic region? a. Offshore factory b. Server factory c. Source factory d. Outpost factory

Server factory

Which person was a key figure in developing the Toyota Production System and also developed the concept of poka-yoke? a. Deming b. Ohno c. Toyoda d. Shingo

Shingo

(T/F) A firm competing on cost is more likely to select a location that provides a cost advantage.

TRUE

(T/F) According to the text, customer relationship management refers to building and maintaining profitable long-term customer relationships.

TRUE

(T/F) According to the text, poor planning is typically the cause of most unsuccessful CRM initiatives.

TRUE

(T/F) As a result of the COVID-19 pandemic, many companies are expected to increase their use of digital technologies and automation in the future.

TRUE

(T/F) As customers navigate through a company's website, CRM software can record and analyze the customer's clickstream so website images and ads can be tailored to the needs and desires of that one individual customer.

TRUE

(T/F) Business clusters are geographic concentrations of interconnected companies and institutions in a particular field.

TRUE

(T/F) Business clusters provide the competitive environment that promotes increasing innovation and profitability.

TRUE

(T/F) Facility location decisions can affect the level of service provided to customers and a firm's overall competitive advantage.

TRUE

(T/F) Global location decisions are made to optimize the performance of supply chains and to be consistent with the firm's competitive strategy.

TRUE

(T/F) In the United States there is a trend to locate manufacturing facilities in the sunny, incentive-friendly, nonunionized South.

TRUE

(T/F) Locating research and development, component manufacturing, assembly operations, marketing, and other associated businesses in one area can improve the supply chain, technology sharing, and information sharing.

TRUE

(T/F) Many multinational corporations are moving their facilities into China to have access to the local markets rather than for export reasons.

TRUE

(T/F) Regional trade agreements and the World Trade Organization provide a framework for managers in terms of investigating important facility location elements like tariffs, costs, and the free flow of goods and services in different regions of the world.

TRUE

(T/F) Safeguarding customer information is a legal and ethical responsibility for any company collecting, processing, and transmitting sensitive customer data.

TRUE

(T/F) The United States-Mexico-Canada Agreement (USMCA), replaced the North American Free Trade Agreement (NAFTA).

TRUE

(T/F) The affordability of 3D printers could affect facility location decisions and keep businesses from going overseas for their manufacturing needs.

TRUE

(T/F) The critical issues in sustainable development are energy consumption/production, air pollution, and climate change.

TRUE

(T/F) The development of cleaner, more fuel-efficient and affordable energy technologies will have a direct impact on the cost of production of goods and delivery of services.

TRUE

(T/F) The primary objective of offshore factories is simply to take advantage of low labor costs.

TRUE

(T/F) Through the use of permission marketing programs, customers are allowed to select the type of communications that companies can make with them. Actually, customers can even choose to be completely eliminated from both e-mail and traditional mailing lists.

TRUE

(T/F) Today, successful CRM applications will be measured by the personal value created for the users.

TRUE

(T/F) While a company's Internet presence may be desirable for finding information or conducting product transfers, touching products and talking face-to-face with company representatives remains an integral part of the supplier-customer interface.

TRUE

You work for a company that segments customers by demographic information, and then markets specifically to those customers who are located in the Los Angeles area. This is an example of: a. Target marketing b. Cross-selling c. Geographic marketing d. Personalized customer communication

Target marketing

What happens if a task is performed correctly and done right the first time? a. It likely required more time and resources than it was worth. b. The inspection step is no longer needed in the process. A non-value-added activity can now be eliminated. c. It should be expected that tasks won't ever really be performed correctly, and will always require a revisit. d. Nothing is gained. A second inspection will always be necessary and mandated.

The inspection step is no longer needed in the process. A non-value-added activity can now be eliminated.

All of the following are required elements for the development of an effective CRM initiative EXCEPT: a. Segmenting customers b. Customer value determination c. Utilization of MRP d. Personalizing customer communications

Utilization of MRP

Which of the following are among the MOST important elements of the lean production philosophy? a. Quality inspections and a standardized product line b. Fully automated assembly lines and a large supplier base c. Large inventories and quality inspections d. Waste reduction and continuous improvement

Waste reduction and continuous improvement

What is the most significant difference between improving an existing process and designing a new process? a. When designing a new process, there are a lot more unknowns. b. Improving an existing process relies heavily on Voice of the Customer tools. c. Design for Six Sigma does not have a Define stage in the methodology. d. Existing processes are more focused on meeting the customer's objectives.

When designing a new process, there are a lot more unknowns.

What are managers of a Lean Six Sigma project responsible for? a. assignments b. reviewing how individual assignments are coordinated into a team effort c. analyzing how well each task and individual assignment is completed d. all of these answers

all of these answers

Which of the following is an example of waste within an organization? a. rework b. unnecessary steps or activities c. waiting time d. all of these answers

all of these answers

To be successful in leading a Lean Six Sigma project, what will you need? a. all these things b. leadership from the top c. a strong supportive infrastructure d. skilled team members

all these things

What are two major tools used in the Improve stage of a Six Sigma project? a. document writing and assessment b. brainstorming and communicating c. analysis and more analysis d. isolation and silence

brainstorming and communicating

What do Total Productive Maintenance (TPM) practices ensure? a. equipment availability is minimized b. machines do not break down so often c. scheduled maintenance is not necessary d. equipment downtime is maximized

machines do not break down so often