Exam 18: Performance Measurement to Support Business Strategy

A description of an organization's values, definition of its responsibilities to stakeholders, and identification of its major strategies is called its:

In general, performance measures-financial and nonfinancial-should relate to what managers at different levels control.

The Malcolm Company collected the following information (in days): Marufacturing product 20.0 Storing product Transporting product 2.0 Inspecting product 1.0 - What is the manufacturing cycle time?

Why is worker involvement important to an organization's success?

Levi Strauss and Co., maker of Levi's familiar 501 and 505 brands of jeans, also makes a "Signature" brand that was introduced several years ago for discount retailers such as Walmart. Levi's strategy with the new jeans was to sell a competitively priced pair. The jeans were to be about one-half the price of the familiar 501 and 505 jeans. To get costs down Levi would: ∙ Use cheaper fabrics and materials. ∙ Shun costly mass-market advertising. ∙ Strictly limit the number of fits, styles, and colors. The Signature brand had a good first year of sales; assume that results for the second year and later are not yet in. Required: a. Assess the new strategy at Levi. What do you think are the potential benefits and risks? b. How will the firm's value chain and balanced scorecard change as a result of the new strategy?

Karin Corporation keeps track of the time required to fill orders. The times required for a particular order appear below: Hours Processing Time 0.6 Irspection Tirne 0.3 Moving Time 2.1 Storing Time 8.4 Required: a. Determine the manufacturing cycle time. Show your work. b. Determine the manufacturing cycle efficiency. Show your work.

Benchmarks are used to evaluate the performance of an activity or operation relative to other organizations or other parts of one's own organization. Which of the following is not a guideline for using benchmarks to evaluate performance?

Describe the four common perspectives that are used in the balanced scorecard.

Jackie Horner started Glad Rags to combine fashion and sustainability. The original production of sandals made from recycled plastic has expanded to a complete line of casual footwear. Current sales total over $2 million. Jackie hired the firm's first controller early this year, and has asked him to detail suggestions for ways to increase profits. Thomas Roberts, the new controller, has compiled a list of recommended changes that focus on quality improvements. Glad Rags' customers expect high quality at a low price, a "value" product. So, the company must simultaneously watch costs and quality. After receiving his list of suggestions, Jackie calls Thomas to her office and says, "I don't see how improving quality can increase productivity. In fact, it seems to me that efforts to improve quality will slow down production and decrease productivity." Required: Using specific examples, help Thomas explain to Jackie why efforts to improve quality can also boost productivity. How does productivity play a role in the firm's strategy and competitive environment?

In the balanced scorecard, the internal business process perspective addresses which of the following questions?

Which of the following is not a mistake often made when measuring nonfinancial performance?

In general, all managers in a given organization are responsible for the same things and should be evaluated using the same financial and nonfinancial measures.

Marion Forging Co. has provided the following information for last year: Tons of metal input 14,000 Labor hour's 5,000 Overhead costs \1 25,000 Tons of forging produced 10,000 Required: Calculate the partial productivity for: a. Metal. b. Labor.

The Malcolm Company collected the following information (in days): Marufacturing product 20.0 Storing product Transporting product 2.0 Inspecting product 1.0 - What is the manufacturing cycle efficiency?

Moonlight Co. has provided the following information for last year: Material costs 300,000 Labor costs \ 90,000 Overhead costs \ 234,000 Product produced 16,000 units Total factor productivity 1.154 The selling price of the product (rounded) is:

Prancing Products has provided the following information for last year: Gallons input 10,000 @\ 15/ gallon Labor hours 5,000 @\ 20/ hour Overhead costs \ 125,000 Gallons finished 8,000 @ selling price of \ 55/ The total factor productivity measure is:

The Satin Manufacturing Company collected the following information (in days) for July and August: July August Transportirg, product 2.0 3.0 Processing product 17.0 18.0 Inspectirng product 0.5 1.2 Storing product 7.0 7.0 Required: a. Calculate the manufacturing cycle efficiency for July and August. b. Assume September's processing time will be the same as August. If Satin's target for manufacturing cycle efficiency is 65%, what will be September's target for manufacturing cycle time?

Continuous improvement involves the search for and implementation of the best way to do something as practiced by other organizations or in other parts of one's own organization.

Which of the following statements is(are) true regarding performance measures? (A) In general, objective performance measures are better than subjective performance measures. (B) In general, the use of multiple performance measures is better than the use of single performance measures.

Partial productivity: