Performance Management MCQ Quiz in मल्याळम - Objective Question with Answer for Performance Management - സൗജന്യ PDF ഡൗൺലോഡ് ചെയ്യുക

The correct option is option 1 

Additional Information: 

8,500 = 16 × 750 r⁴

8,500/(16 × 750) = r⁴

r = 0.92 or 92%

The correct option is option 2

Additional Information: 

Cumulative average time per batch for the first 71 batches

y = a × b

Where y = the cumulative average time per unit to produce x units

x = the cumulative number of units

a = the time taken for the first unit of output

b = the index of learning (log LR/log2)

The cumulative average time per batch, with a learning curve of 90%, is therefore

Y = aX - 0.152

where a = the time for the first batch (750 hours) and X is the number of the batch. For the 71st batch, X = 71 .

Y = 750 × 71^-0.152

= 750 × 0.5231 = 392.35

The cumulative average time per batch for the first 71 batches is 392.35 hours.

Time taken for the 71st batch

The cumulative average time per batch for the first 70 batches is

Y = 750 × 70^-0.152

= 750 × 0.5243 = 393.23

(a) Optimum production plan

Define the variables

Let x = number of units of Xeno to be produced.

Let y = number of units of Yong to be produced.

Let C = contribution.

State the objective function: C = 30x+ 40y

Subject to the constraints:

Build time: 24x + 20y ≤ 1,800,000

Program time: 16x + 14y ≤ 1,680,000

Test time: 10x + 4y ≤ 720,000

Non-negativity constraints : x, y ≥ 0

Sales constraints: x ≤ 85,000 and y ≤ 66,000

Workings for drawing the graph

Build time:

If x = 0, y = 1,800,000/20 = 90,000

If y = 0, x = 1,800,000/24 = 75,000

Program time:

If x = 0, y = 1,680,000/14 = 120,000

If y = 0, x = 1,680,000/16 = 105,000

Test time:

If x = 0, y = 720,000/4 = 180,000

If x = 0, y = 720,000/10 = 72,000

Plot an iso-contribution line

If y = 40,000, C = 40,000 × $40 = $1,600,000

If C = $1,600,000 and y = 0, x = $1,600,000/$30 = 53,333.33

See graph

Moving the iso-contribution line out to the furthest point on the feasible region, the optimum production point is b. This is the intersection of the build time constraint and the sales constraint for y. Solving the simultaneous equations for these two constraints:

y = 66,000

24x + 20y = 1,800,000

24x + (20 × 66,000) = 1,800,000

24x + 1,320,000 = 1,800,000

24x = 480,000

x = 20,000

C = (20,000 × $30) + (66,000 × $40) = $600,000 + $2,640,000 = $3,240,000

Fixed costs = 3 × $650,000 = $1,950,000

Therefore profit = $1,290,000

(a) The aim of activity-based budgeting (ABB) is to ensure that the amount of resources available accurately reflects the activities required by an organisation's expected production and sales volumes.

By focusing on the relationship between the level of resources available and the activities required, ABB tries to identify two key issues:

• The resources which are under utilised (for example, because there is spare capacity, or because current processes are inefficient) and

• The areas where the level of resources available is insufficient to meet production and sales requirements.

Having identified these issues, ABB then requires an organisation to take action to adjust the level of resources available to match the projected production and sales requirements. ABB also aims to eliminate activities which are not value-adding. This is an important area of difference between ABB and incremental budgeting, because looking to remove activities which do not add value means ABB has an inherent focus on increasing efficiency which incremental budgeting does not have.

Another key principle of ABB is that organisations should control the causes of costs (cost drivers), rather than the costs themselves. The logic for this is that activities drive costs. Therefore, if an organisation understands and manages the activities better, this should help it to reduce the costs resulting from those processes.

However, this understanding is not fully exploited unless management can use it to make changes in the way the organisation goes about its business. The most significant of the cost-beneficial changes can only be made if incorporated into budgets through discussion and performance reviews.

(b) Calculation of spare capacity/shortage

(c) Production machine time

The production line appears to be operating close to its current capacity, with only five production machine hours 'spare' each month.

Having a small amount of spare capacity each month would appear to be prudent, in case there are any unexpected disruptions (for example, defects in the process which require production to be halted whilst they are fixed).

As such, the balance between demand and capacity appears to be well-matched, with little scope to make any further efficiencies.

Quality control inspectors

The 'budgeted' resource requirements identify an important resource shortage in relation to quality control inspections. This is because having only two quality control inspectors does not appear sufficient to carry out the level of checks required. The resource budget suggests there is a shortage of 37.5 hours per month, equivalent to 25% of one full-time inspector's monthly hours.

If the inspectors have to rush to try to complete inspections in less than the 2.5 hours that each should take, this is likely to mean that the inspections are not as thorough as they should be. If inspectors are rushing their inspections and consequently fail to identify sub-standard shoes, this could be a factor in the recent increase in the number of complaints.

However, the extent of the shortage does not seem to be large enough to justify recruiting an additional inspector on a full-time basis. Therefore, the division should consider other alternatives, which could include:

• Employing an additional inspector on a part-time basis. However, this would increase cost, which would seem to contradict the FD's desire to increase profitability.

• Using inspectors from other parts of the business if they have any spare capacity.

• Assessing if the checking process itself can be re-designed, to make it quicker, without compromising quality.

Shipping administrators

By contrast, there appears to be a significant level of spare capacity among the shipping administrators. 45 hours per month is almost one-third of one administrator's monthly hours. This level of spare capacity or idle time indicates inefficiency. If there are similar activities with spare capacity across the company, this would support the FD's belief that the company is not operating as efficiently as it could.

However, the surplus capacity does not appear so high that the division could afford to only have one shipping administrator. It is possible one of the administrators would be prepared to work part time thereby reducing wage costs. Alternatively, it may be possible for the administrators to assist other areas of the business.

The correct option is option 3 

The correct option is option 3

Additional Information:

Maximin is used by risk averse decision makers (people who do not like risk). Minimax regret is also used by risk averse decision makers. Expected values are used by risk neutral decision makers.

The correct option is option 4 

Additional Information:

• For the low level of variable costs, the best fee strategy would be to charge $180 as this has the highest contribution of $1,733. The regret for $180 is therefore zero.
• The regret for the other two decisions is the difference between the contribution that they generate at the low level of variable cost and $1,733:
• For fee strategy $200, regret is: (1,733 − 1,706) = 27
• For fee strategy $220 regret is (1,733 − 1,575) = 158

The correct option is option 2 

Additional Information:

• Expected value for each fee strategy is calculated by multiplying each potential outcome by its probability and summing these:
• $180: (1,339 × 0.1) + (1,496 × 0.6) + (1,733 × 0.3) = $1,551
• $200: (1,378 × 0.1) + (1,509 × 0.6) + (1,706 × 0.3) = $1,555
• $220: (1,313 × 0.1) + (1,418 × 0.6) + (1,575 × 0.3) = $1,455

The correct option is option 2

Additional Information:

• A fee of $180 gives the highest potential return, so would be chosen under maximax. The minimum returns for each fees strategy are: $1,339 for $180, $1,378 for $200 and $1,313 for $220. A fee of $200 therefore has the highest minimum return, so would be chosen under maximin.

The correct option is option 1

Additional Information:

• Planning variance = ($1.70 − $2) × 950 = $285 Adverse