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Homework Assignment for ME1000 Industrial

Management Re-Exam
You have two days for constructing the homework assignment. This assignment is handed out
on October 22th, 8 a.m. and should be handed in (as a Word file, .doc) on October 25th, 23.59
P.M, at the latest. Late answers will lead to deduction of points.
Complaints to the grading will only be accepted in written form.
How to submit
1. Answer all the questions in this document (answer sheet at the end of the document).
2. Go http://me1000-exam.questionpro.com/
3. Copy and paste the answers from the A-setion of this document into the on-line form.
4. Submit the answers. When the ”Thank you page” is shown, it says ”Thank you for your
answer. Dont forget to save the following Response ID: 11587810 ”, save this number
and add it to the top of this document.
5. Save and submit this document to stefan.gorling@indek.kth.se ,use the file-name as
your subject.
This document submitted by e-mail is the formal submission. The form submission makes it a
lot easier for me to grade more efficient so that you can get your grades quicker.

Page 1 of 11
Part A: Short-answer Questions (1p
questions)
This part consists of short-answer questions. Select the answer that you find most appropriate.
There’s always exactly one correct answer, if you are in doubt select the answer you thing fits
best/is most important.

The questions are written from an US perspective in the same way that your book does. If it is
relevant for the question, assume that you are a US student living in USA.

These answers are corrected as correct/false only. There are no negative points given to
incorrect answer so if you don’t know you can always guess.

A1. Idle Time Gaming, Inc., would like its employees, customers, and the general public to be
aware of the activities and programs it has achieved for the community over the past year. The
company might consider performing a:
A. contributory analysis.
B. responsibility review.
C. social audit.
D. annual payment report.
Answer:

A2. As a finance manager at AllSports Communication, Charlie worries about the firm's
borrowing requirements for the upcoming year. He knows the benefit of estimating AllSports'
cash disbursements and short-term investment expectations. Facing these concerns, a(n)
________ would provide Charlie with valuable information by providing a good estimation of
whether the firm will need to do short-term borrowing.
A. operating budget
B. cash budget
C. capital budget
D. line item budget

Answer:

A3. Safe‘nSwift Airlines implemented a program to curb workplace violence before it occurs.
Under this program, the employees of Safe‘nSwift can expect to:
A. share in any profits their airline earns.
B. get paid extended leave if they become especially and visibly angry at work.
C. see much more use of contingent workers.
D. take part in focus groups to share their ideas about workplace violence prevention.

Answer:

A4. Nightbrite Company's ________ relies heavily on advertising, personal selling, and a limited
use of product sampling.
A. marketing mix
B. promotion mix

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C. communication network
D. transfer marketing

Answer:

A5. The disadvantages of selling stock to obtain long-term financing include:

A. the legal obligation to pay dividends if the company is profitable.
B. the funds contributed by stockholders must be repaid from after tax profits.
C. a reduction in the market value of the firm's products.
D. a possible change in management and policies in the company.

Answer:

A6. Ina Vestor has a brokerage account with one of the remaining large investment firms. This
morning her broker called asking if she is interested in participating in an IPO. He went on to say
that he could get her 200 shares for $23/share. If Ina agrees to buy the IPO, the trade will take
place in the _____________.
A. fair trade market
B. Boston market
C. primary market
D. secondary market

Answer:

A7. The only deposits of a rare and sought after mineral known as Yuksporite are found in
Russia. Since no other nation has deposits of Yuksporite, Russia has a(n)__________ in this
mineral.
A. protected advantage
B. diversified benefit
C. absolute advantage
D. relative internal benefit

Answer:

A8. Green Giant Green Beans, Chevy Corvette, Coca Cola, Dole Pineapple, and Peter Pan
Peanut Butter are all examples of:
A. private brands.
B. wholesaler brands.
C. manufacturers' brands.
D. registered generic brands.

Answer:

A9. Jermaine is a manager with Drevil Industries. Part of his job is to make specific short-term
decisions about what his department must do to achieve Drevil's long-term success. Jermaine is
involved in:
A. strategic planning.
B. contingency planning.
C. tactical planning.
D. complimentary planning.

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Answer:

A10. The organizational structure of the U.S. Army's 1st Infantry Division provides for direct
two-way lines of responsibility, authority, and communication running from the top to the
bottom. Additionally, each person in the division reports to only one superior. The 1st Infantry
Division is clearly an example of a(n):
A. matrix organization.
B. functional organization.
C. line organization.
D. service organization.

Answer:

A11. Tyrone recently earned his license to sell real estate in Indiana, and has interviewed with
several agencies in an attempt to find a job. All have told him that his income will be based on a
percentage of his real estate sales for the month. Tyrone will be paid:
A. a monthly salary.
B. a piece rate.
C. on a commission basis.
D. through a profit-sharing plan.

Answer:

A12. Wild Bill's Cap Emporium offers to produce hats and caps according to customers'
requests. Wild Bill's utilizes a(n):
A. analytic system.
B. just-in-time system.
C. intermittent process.
D. continuous process.

Answer:

A13. Andre is a real estate agent who has an idea for a software program that will help perform
real estate appraisals more quickly and more accurately. He has worked with a buddy who is
good at programming to develop a detailed description of what the software will do and how it
differs from existing applications. Now Andre has taken this description and shown it to a
number of fellow real estate agents to see if his idea appeals to them. Andre is engaging in:
A. prototype outsourcing.
B. test marketing.
C. concept testing.
D. word-of-mouth promotion.

Answer:

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A14. Gangsta Industries produces a variety of anti-crime and safety products such as burglar
alarms, smoke detectors, surveillance cameras, and specialty locks. Gangsta sells to households,
businesses, and government agencies. They have found that each market requires a different
marketing strategy. Gangsta would probably benefit from departmentalization by:
A. function.
B. process.
C. customer type.
D. market opportunities.

Answer:

A15. Which of the following would most likely involve ethical concerns?
A. Overstating an expense report.
B. Forecasting sales for the next year.
C. Developing the marketing plan for the next year.
D. Improving working conditions.

Answer:

A16. Frank Lehman is a human resource manager at a major corporation. If Frank's company is
like most firms today, which of the following statements about Frank's job is likely to be the
most accurate?
A. Most of Frank's time will be devoted to clerical duties such as processing payroll checks and
keeping employee files updated.
B. Frank's job will be simpler in the future than it was in the past, because the percentage of new
workers entering the labor force who are poorly educated and unprepared for work is slowly but
steadily declining.
C. Government laws and regulations concerning hiring, worker safety, pay, and unionization will
make Frank's work complex and challenging.
D. Frank and his fellow human resource managers will be given complete responsibility for
performing all human resource functions within the organization.

Answer:

A17. Delacroix Shoes produces top-quality high-fashion shoes, designed for the person
concerned about style. Delacroix gives only a few preferred retailers in a given market area the
right to market its product. Delacroix Shoes uses:
A. intensive distribution.
B. selective distribution.
C. exclusive distribution.
D. limited function distribution.

Answer:

A18. The interest rate on a AAA rated government treasury bond is 3.5%. A secured corporate
bond is likely to pay:
A. The same as the treasury bond.
B. Less than the treasury bond.
C. More than the treasury bond.
D. The same as the treasury bond, but with a shorter maturity date.

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Answer:

A19. John is creating a presentation on the consumer price index, for his business class. He
wants students to understand that food and energy prices have risen more rapidly than other
market items that the government traditionally measures for inclusion in the CPI calculation. He
will show students that the core inflation figure will be _______ than the CPI. He will then
inform the class that if consumers begin substituting, for example: If the prices at full service hair
styling salons get too exorbitant, consumers may substitute by going to cheaper hair cutting
salons. This will make the ___________ calculation lower.
A. higher; C-CPI
B. lower; C-CPI
C. lower, PPI
D. higher, PPI

Answer:

A20. A __________ represents an agreement by a bank to pay a foreign company a given

amount if certain conditions are met.
A. certificate of deposit
B. banker's acceptance
C. callable option
D. letter of credit
Answer:

A21. As restaurant chains that specialize in Mexican cuisine, Fernando's and Carmelita's offer
similar items on their menus. However, Fernando's restaurants are positioned in the market as
elegant establishments with high prices. Carmelita's restaurants, on the other hand, are located in
middle-class neighborhoods, with a casual atmosphere that welcomes families with young
children. The prices at Carmelita's are in the moderate range. When evaluating the marketing
strategies used by these restaurants, we can conclude that:
A. both practice product mix effectiveness.
B. they utilize product differentiation.
C. Fernando's has chosen a shopping good strategy.
D. their target markets differ, with one intended to appeal to the industrial market, and the other
designed to attract the consumer market.
Answer:

A22. Kelley's Kloset, LLC has applied for a business loan. Her prospective banker has requested
information concerning the financial condition of her business. Which accounting discipline is
responsible for providing accounting information to outside stakeholders?
A. Management accounting.
B. Financial accounting.
C. Tax accounting.
D. Certified bookkeeping.

Answer:

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A23. Borden, Inc. makes pasta, dairy items, and adhesives. These different types of products are
referred to as Borden's:
A. product line.
B. product mix.
C. product differentiation.
D. product life cycle.

Answer:

A24. Greg is working as a marketing trainee for an online Music CD and video retailer. His boss
called a meeting for next week with one thing on the agenda: "Bring with you your ideas about
how we can gain a competitive advantage." Greg plans to provide the following response:
A. Create a management-driven environment with lots of employee training.
B. Create a customer-driven environment where we constantly try to create customer value.
C. Restructure the organization so that there is always a manager on duty to chat with online
customers that are having problems with their orders.
D. Always match the promotions of our competitors. Price is the only thing customers care
about.

Answer:

A25. Rodney Halpern works in the marketing department of a major manufacturing firm. Much
of his job involves managing the movement of materials, parts, and information from suppliers
to his firm. He tries to coordinate these flows with his firm's factory processes and assists with
the efficient movement of finished goods to final consumers. These activities suggest that
Rodney's job responsibilities focus on:
A. merchant wholesaling.
B. multilevel marketing.
C. utility processing.
D. supply chain management.

Answer:

A26. Ramona works for a large Denver, Colorado ski equipment warehouse. In the past, her only
chance to learn how she was doing on the job came during fairly superficial performance reviews
with her boss twice a year. The company recently implemented a policy designed to give Ramona
and other employees detailed information about their job performance on a monthly basis. This
suggests that the ski equipment retailer now provides Ramona and her co-workers with more:
A. autonomy.
B. task identity.
C. task significance.
D. feedback.

Answer:

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A27. Continental Foods is considering a conglomerate merger with a company that makes
storage solutions. A likely reason is:
A. Expand its market share.
B. Develop spin-off companies.
C. Diversification.
D. Meet the requirements to convert to a limited liability company.

Answer:

A28. Two years ago, Travis started his own restaurant supply company, serving the greater
Chicago area. Until recently, he has never concerned himself with establishing a formal control
system. Now, with a recession looming, he is experiencing cost conscious restaurant owners. He
has decided that a formal control system is needed. The first step Travis should take is:
A. draw up a formal organization chart.
B. talk to his banker to set financial goals.
C. devise a set of clear performance standards.
D. design an accident report form so that he can keep accurate records of all accidents that
occur.

Answer:

A29. As he explores his options, Sergio notices that some opportunities appear to be riskier than
others. When considering various opportunities, Sergio should keep in mind that:
A. he will be better off picking a low risk business opportunity, since the safest ones are usually
the most profitable as well.
B. even though some opportunities appear riskier than others, the level of risk actually varies
little from one opportunity to another.
C. high risk business opportunities often have the potential for high returns as well.
D. government regulations are in place to protect investors and entrepreneurs from failure, so
there is no need to worry about risk.

Answer:

A30. Nina Corby owns a card shop in a small shopping center where she sells cards produced by
a national company. Nina sells to final customers, so she is a(n):
A. merchant wholesaler.
B. retailer.
C. rack jobber.
D. channel captain.

Answer:

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A31. U.S. firms that produce sophisticated military hardware are prohibited from exporting that
equipment to "unfriendly" governments, such as Iran. This complete ban on exporting sensitive
technology to specific countries is an example of a(n):
A. import quota.
B. boycott.
C. tariff.
D. embargo.

Answer:

A32. If businesses are producing at capacity, and the nation is experiencing almost full
employment (a very low rate of unemployment - less than 2%), the Fed may decide to:
A. Lower interest rates.
B. Raise taxes.
C. Lower taxes.
D. Increase interest rates.

Answer:

A33. Axel is in a new position, serving as a first-line manager. Axel's position will require him to
spend a lot of time:
A. developing strategic plans.
B. evaluating the daily performance of workers.
C. creating a vision for the company.
D. providing information to stakeholders

Answer:

A34. As a manager, Charlene works hard to ensure that employees are treated fairly, yet she still
gets feedback that indicates that some employees don't believe she is fair. This problem most
likely results from the fact that:
A. Charlene doesn't understand that employees are not concerned with equity, only with getting
the biggest possible reward for the least possible effort.
B. "fair treatment" is a hygiene factor rather than a motivator.
C. attempts to treat employees fairly only works in an Asian or European culture. American
employees tend to be individualists who believe that rewarding results is more important than
perceptions of fairness.
D. equity judgments are based on perceptions, and the perceptions of employees are not always
accurate.

Answer:

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A35. Arborview Plant Science Company has invented a drought resistant grass seed that only
needs watering three times each year. In order to expand distribution world wide, the company
whose product produces lush green foliage needs serious funding. The handful of seed scientists
that own the company are seeking ____________, but understand that they will relinquish a
sizeable share of ownership in order to obtain the funds.
A. debenture capital
B. international line of credit
C. leverage
D. venture capital

Answer:

A36. Bonnie faces the challenge of developing the promotion mix for a new business. Given the
uniqueness of the new products and a very limited budget, Bonnie confronts a creditability
problem. She realizes that the promotional messages of an unknown firm may be met with
skepticism. Bonnie should consider:
A. publicity to help create a positive image for her firm and its products.
B. the extensive use of persuasive advertising.
C. emphasizing personal selling rather than public relations.
D. changing jobs because this situation is hopeless.

Answer:

Page 10 of 11
Part B: Essay-style Question (8 points)
(OBS! – Part B is only for ME1000/ME1800 students. MG2211 students only need to submit
the A part).
 
This part consists an essay style. You should try to discuss and analyze the questions using
everything you have learned during the course. You shouldn’t only describe what your decisions
are, but what the alternatives where and why you made your choice. These answers will be given
different number of points according to the level of analysis.

The answer should contain no more than 5 pages and could probably be answered much shorter
than that.

Question:

Coming back from a trip to St Petersburg you can’t forget the crêperie stands in the corners of
the street where you could buy pancakes filled with many variations of different stuffing at a
bargain. (See http://en.wikipedia.org/wiki/Crêpe)

Crêpes are common in several countries, both as fast-food, as a restaurant theme, pre-packaged
lunch meals in supermarkets, etc. But in Sweden, they’re extremely rare. Do I smell an
opportunity?

A)
As an aspiring entrepreneur, explain how you would go about to build a business in this sector. It
could focus on any customer types, and produce and/or sell anything as long as it is some kind
of pancake involved.

What type of product/service would you try to build? How would you produce and sell it? What
do you do yourself, what do you contract other companies to do? What about packaging,
marketing, staffing, pricing, logistics, quality, health regulations etc.?

It’s now time to turn this into a successful business. But what to do next? Describe how will you
go about producing, marketing, selling, distributing these products, etc.

B)
After running a successful business in Stockholm for a few years, you are contacted by 3G
Capital, the owners of Burger King and several other food-related companies. They want to
invest in your company and inject capital in order for you to expand your business (Remember
that they want to have a good return on their investment, so even though they could give you a
lot of cash, you still have to be able to turn it into a lot of profit).

How do you expand the business? Entering new markets? Adding product segments? What
would you do, why, and in what order?

Good Luck!

Stefan Görling

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