Production and Operations Management

191. The 20-80 rule states __________________

  1. The top 80 percent of customers generate 20 percent of the company's profits
  2. The bottom 80 percent of customers generate 80 percent of the company's profits while the bottom 20 percent of customers generate 20 percent of the profits
  3. The top 20 percent of customers generate 80 percent of the company's profits
  4. The bottom 20 percent of customers generate 80 percent of the company's profits
Correct answer: (C)
The top 20 percent of customers generate 80 percent of the company's profits

192. One problem that can deter a firm from effectively using CRM is __________________

  1. Having the resources to manage and train employees effectively
  2. Not all customers want a relationship with the company
  3. The expense of building and maintaining a customer database
  4. All of the above
Correct answer: (D)
All of the above

193. Which of the following is true about ISO 14000 certification?

  1. It is a prerequisite for ISO 9000 certification
  2. It indicates a higher level of adherence to standards than ISO 9000
  3. It is only sought by companies exporting their goods
  4. It deals with environmental management
Correct answer: (D)
It deals with environmental management

194. __________________ is when a company works continuously with its large customers to help improve their'performance.

  1. Basic marketing
  2. Reactive marketing
  3. Proactive marketing
  4. Partnership marketing
Correct answer: (D)
Partnership marketing

195. __________________ is the difference between the prospective customer's evaluation of all the benefits and all the costs of an offering and the perceived alternatives.

  1. Customer cost
  2. Value delivery system
  3. Value proposition
  4. Customer perceived value
Correct answer: (D)
Customer perceived value

196. Total Quality Management emphasizes

  1. The responsibility of the Quality Control staff to identify and solve all quality-related problems
  2. A commitment to quality that goes beyond internal company issues to suppliers and customers
  3. A system where strong managers are the only decision makers
  4. A process where mostly statisticians get involved
Correct answer: (B)
A commitment to quality that goes beyond internal company issues to suppliers and customers

197. Frequency programs (FP's) are designed to provide rewards to __________________

  1. Customers who need to be encouraged to buy more frequently
  2. Customers who buy frequently and in substantial amounts
  3. Customers who buy frequently but in small amounts
  4. Customers who buy infrequently in large amounts
Correct answer: (B)
Customers who buy frequently and in substantial amounts

198. All of the following costs are likely to decrease as a result of better quality except

  1. Customer dissatisfaction costs
  2. Inspection costs
  3. Warranty and service costs
  4. Maintenance costs
Correct answer: (D)
Maintenance costs

199. __________________ is a company's ability to perform in one or more ways that competitors cannot or will not match.

  1. Customer advantage
  2. Customer relationship advantage
  3. Customer lifetime value
  4. Competitive advantage
Correct answer: (D)
Competitive advantage

200. "Quality is defined by the customer" is

  1. An unrealistic definition of quality
  2. A user-based definition of quality
  3. A manufacturing-based definition of quality
  4. A product-based definition of quality
  5. The definition proposed by the American Society for Quality Control
Correct answer: (B)
A user-based definition of quality
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