Human Resources
Employees receive additional pay directly linked to achieving measurable performance targets. Identify this reward strategy.
Performance Pay / Bonus
A luxury watch company maintains high prices partly to communicate exclusivity and superior quality. Which consumer perception is being used?
Prestige Pricing
A business reports a current ratio of 2.4:1 but still struggles to pay suppliers on time. Which current asset may cause the ratio to give a misleading picture of liquidity?
Inventory
Which performance objective is most directly improved when a business reduces the time between receiving an order and delivering it?
Speed
A business increases sales revenue by 12%, but its gross profit ratio falls. What has increased faster than sales revenue?
Cost of goods sold (COGS)
Management consults employees before introducing new technology, reducing resistance and increasing employee ownership of the change. Which leadership style is being used?
Participative / democratic
A business divides its potential customers into groups according to characteristics such as age, income, lifestyle and geographic location, then selects the group it intends to serve. Identify the marketing process being used.
Market segmentation
A profitable business experiences a cash shortage because customers are taking increasingly longer to pay invoices. Which financial management strategy needs tightening?
Accounts receivable control
A manufacturer deliberately maintains excess production capacity so it can respond rapidly to unexpected increases in demand. Identify the capacity strategy.
Volume (remember the 4 V's)
A business reduces production costs by outsourcing overseas, but delivery times become longer and less predictable. Which TWO operations performance objectives are most directly in conflict?
Cost and speed
Employee turnover falls substantially while absenteeism and workplace accidents also decline. What do these measures represent?
Indicators of effective human resource management
A supermarket advertises milk below cost to attract customers who are expected to purchase other profitable products. Identify the pricing strategy.
Loss leader pricing
A business increases its use of borrowed funds to finance expansion. As a result, its total liabilities increase substantially compared with owner’s equity. Which financial ratio will be most directly affected?
Debt to equity ratio (gearing)
A business redesigns production so components arrive immediately before they are required, reducing storage costs but increasing exposure to supply disruption. Identify the strategy.
Just-in-time (JIT) inventory management
A business introduces extensive employee training. Productivity rises, product defects fall and customer satisfaction improves. Which TWO business functions have been most directly improved by the HR strategy?
Human resources and operations
A business dismisses an employee because their position genuinely no longer exists rather than because of misconduct or poor performance. Identify the type of separation.
Redundancy
An Australian company uses the same global brand but modifies its advertising message to suit cultural differences in Japan. Which two global marketing approaches are being combined?
Global branding and customisation
An Australian exporter will receive USD $5 million in three months and fears the Australian dollar will appreciate. Which financial instrument can lock in the exchange rate today?
Forward exchange contract
A business relocates production overseas to access cheaper labour, but product defects increase. Which operations performance objective has been most directly compromised?
Quality
An Australian business expects to receive payment from an overseas customer in six months. It takes action now to reduce the risk that exchange rate movements will decrease the value of the payment when converted to Australian dollars. Identify the financial strategy being used.
Hedging
A business has low staff turnover and absenteeism but falling productivity and rising customer complaints. Why can't management conclude its HR strategies are effective?
HR effectiveness must be assessed using multiple indicators; low turnover and absenteeism do not necessarily mean employees are productive or meeting business objectives
A business experiences strong sales growth but declining market share. How can both occur at the same time?
The total market is growing faster than the business's sales
Current assets = $600,000; inventory = $350,000; current liabilities = $300,000. Calculate the quick ratio.
0.83:1
A manufacturer achieves very low unit costs but cannot quickly alter its product range when consumer preferences change. Identify the tension between two performance objectives.
Cost vs flexibility
A business responds to increasing competition by reducing costs, improving product quality and introducing greater variety into its product range. Identify the THREE operations performance objectives being targeted.
Cost, quality and flexibility