Exam 19: Performance Measurement and Evaluation

Measuring and evaluating performance historically has had certain problems and limitations.

According to Kaplan and Norton, a balanced scorecard includes all of the following key performance measurement areas except the _____.

_____ is the process of determining what the external customer is willing to pay for a product or service and then assigning specific cost targets to the components, assemblies, and systems that make up the product or service.

A _____ is the increase or decrease in cost resulting from a change in purchasing strategy or practice brought about by an individual or a group.

Salaries traditionally take the largest share of the purchasing administrative budget.

The most common price performance measures include actual purchase price versus planned purchase price comparisons, actual purchase price(s) compared to a market index, comparisons of actual-to-actual purchase prices for individual and aggregated items between operating plants or divisions within an organization, and target prices achieved.

It is uncommon to have additional measures that track different aspects of a firm's inventory investment.

A common misconception is that a performance evaluation system should not measure every possible activity.

A serious problem in measurement is that the data that managers pay attention to are often the wrong data.

_____ measures include tracking actual transportation costs against some preestablished objective, demurrage and detention costs, and premium transportation.

Measurement is virtually free.

_____ refers to the extent to which, by choosing a certain course of action, management can meet a previously established goal or standard.

Well-defined measures use data that are available and accurate.

All aspects of performance lend themselves to quantitative measurement.

Joint participation means that the personnel responsible for each measure participate in developing the measure or establishing the measure's performance objective.

There is no one best way to measure performance.

A/An _____ would typically link to a contractual agreement whereby, for new technologies, the buying firm may get insight or some period of time before new technology developments are shared with other organizations.

All of the following are phases in the benchmarking process except _____.

Some individuals resist the benchmarking process because of a reluctance to recognize the value of a competitor's way of doing business - the "not invented here" syndrome.

Historical data provide substantial insight about the performance capabilities of competitors or other leading firms.