SM205 Chapters 11-15

​A/An _____ is defined as the cost of the next best alternative.

• Operating cost

• Purchase price

• Net present value

• Opportunity cost

​_____ is defined as the present value of all costs associated with a product, service, or capital equipment that are incurred over its expected life.

• Cash flow analysis

• Total cost of ownership

• Make-buy analysis

• Competition pricing

Which of the following is not one of the important factors to consider when building a TCO model?

• Focus on the small and easily measurable costs first

• Building a TCO can be a costly and time-intensive activity

• Work in a team

• Make sure to obtain senior management buy-in before embarking on a full-fledged TCO.

Which of the following is not one of the common assumptions typically used in break-even analysis?

• Variable costs fluctuate in a linear fashion

• Revenues vary directly with volume

• Fixed costs are never considered

• Break-even analysis considers total costs rather than average costs

​In should-cost modeling, _____ refers to the integrity and transparency of the cost model created.

• Direct cost

• Value stream maps

• Fixed cost

• Auditability

_____ actions and resources are those that create value for the customer.

• Non-value-adding

• Necessary non-value-adding

• Value-adding

• None of the above

_____ actions and resources are everything done in the process, which contribute no value to the customer, but which they are forced to pay for when they buy the product or service.​

• Value-adding

• Excess inventory

• Non-value-adding

• Waiting time

The _____ (in time) through a PERT network is the _____.​

• Longest path...critical path

• Shortest path...critical path

• Longest path...slack

• Shortest path...slack

A negotiator’s _____ can be defined as his or her opening offer, which represents the optimistic (or ideal) value of the issue being negotiated.

• Interest

• BATNA

• Want

• Position

Which of the following is not a reason for negotiating with suppliers?​

• The total contract value or volume is large

• The purchase is for widely available, commodity-like goods

• The purchase involves utilization of capital-intensive plant and equipment

• The supplier will perform important or significant value-added activities