Mgmt 310 Quiz 2

Question 1 of 25

4.0/ 4.0 Points

Environmental scanning is a:

A. Planning process

B. Organizing process

C. Leading process

D. Controlling process

Answer Key:

Question 2 of 25

4.0/ 4.0 Points

Conscientiousness is the one personality trait that uniformly predicts:

A. How highly adaptable to change a person is

B. How highly motivated a person is to learn a new skill

C. How highly detailed a person will be

D. How highly performance oriented a person will be

Answer Key:

Question 3 of 25

4.0/ 4.0 Points

Why should managers understand how visual perception may be biased?

A. Managers have a tendency to compare and contrast objects and people to each other.

B. Managers are prone to errors and biases when perceiving themselves.

C. Managers rely on their visual perception to form their opinions about people and objects around them.

D. Bias in visual perception tends to interfere with the management process.

Answer Key:

Question 4 of 25

4.0/ 4.0 Points

How we perceive others will shape our behavior, which in turn:

A. Will shape the behavior of the person we are interacting with

B. Will lead to undue success or failure

C. May lead to wrong inferences about objects in our environment

D. Will lead to generalizations

Answer Key:

Question 5 of 25

4.0/ 4.0 Points

Exit interviews are often conducted by:

A. Employee manager

B. Human resources representative

C. Outside consultants

D. Top management

Answer Key:

Question 6 of 25

4.0/ 4.0 Points

Managers need to consider the individual and the situation when making:

A. Organizing decisions about the job

B. Leading decisions about the organization

C. Controlling decisions about the departments

D. Planning decisions about the strategies of the company

Answer Key:

Question 7 of 25

4.0/ 4.0 Points

Motivating employees is a managerial function of:

A. Leading

B. Controlling

C. Organizing

D. Planning

Answer Key:

Question 8 of 25

4.0/ 4.0 Points

How much of a manager’s time is spent communicating?

A.10-25%

B.25-50%

C.50-90%

D.90-100%

Answer Key:

Question 9 of 25

4.0/ 4.0 Points

A downside of the office grapevine is:

A. Information is not accurate

B. Managers do not participate in the exchange of information

C. The grapevine lacks a specific sender

D. The informal structure hinders communication

Answer Key:

Question 10 of 25

4.0/ 4.0 Points

Stories can serve to reinforce and perpetuate an organization’s culture, which is part of the POLC function of :

A.Planning

B.Organizing

C.Leading

D.Controlling

Answer Key:

Question 11 of 25

4.0/ 4.0 Points

According to one study, what percent of a receiver’s comprehension of a message is based on the sender’s actual words?

A.3%

B.5%

C.7%

D.10%

Answer Key:

Question 12 of 25

4.0/ 4.0 Points

Which of the following is not an example of a medium rich communication channel?

A. Handheld devices

B. Blogs

C. Written letters and memos

D. Legal documents

Answer Key:

Question 13 of 25

4.0/ 4.0 Points

Communication within an organization flows:

A. Upward

B. Downward

C. Lateral

D. Many directions

Answer Key:

Question 14 of 25

4.0/ 4.0 Points

How groups function has important implications for organizational:

A. Hierarchy

B. Mission and vision

C.POLC function

D. Productivity

Answer Key:

Question 15 of 25

4.0/ 4.0 Points

Group members are becoming more authentic as they express their deeper thoughts and feelings in the stage of:

A. Forming

B. Storming

C. Norming

D. Performing

Answer Key:

Question 16 of 25

4.0/ 4.0 Points

An ideal time to host a social or team-building event is at the stage of

A. Forming

B. Storming

C. Norming

D. Performing

Answer Key:

Question 17 of 25

4.0/ 4.0 Points

The tendency of individuals to put in less effort when working in a group context is called:

A. Groupthink

B. Cohesion

C. Punctuated equilibrium

D. Ringelmann effect

Answer Key:

Question 18 of 25

4.0/ 4.0 Points

Teams that individuals from different parts of the organization are called:

A. Task force

B. Product development teams

C. Cross-functional teams

D. Virtual teams

Answer Key:

Question 19 of 25

4.0/ 4.0 Points

Pooled interdependence exists when:

A. Team members may work independently and simply combine their efforts to create the team’s output

B. If one person’s output becomes another person’s input

C. When the team decides they should work together on each phase of a project

D. The reward that an individual receives depends on the performance of others.

Answer Key:

Question 20 of 25

4.0/ 4.0 Points

A key consideration when forming a team is to understand the personality traits needed before starting the selection process as well as the team members’:

A.KSAs

B. Potential

C. Leadership traits

D. Work ethic

Answer Key:

Question 21 of 25

4.0/ 4.0 Points

The implications of the ERG theory is that we need to recognize which of the following?

A. The multiple needs that may be driving an individual at a given point

B. Understand group behaviors

C. Job design is critical to motivation

D. How to reward employees better

Answer Key:

Question 22 of 25

4.0/ 4.0 Points

Job design is one of the many organizational design decisions managers must make when engaged in the POLC function of:

A. Planning

B. Organizing

C. Leading

D. Controlling

Answer Key:

Question 23 of 25

4.0/ 4.0 Points

Controls can cost the organization through

A. decentralized decision-making.

B. opportunity recognition.

C. botched implementation.

D. layoffs

Answer Key:

Question 24 of 25

4.0/ 4.0 Points

One of four top mistakes companies appear to make regarding how to set and use non-financial controls effectively is

A. not to link control to customer demands.

B. failing to validate the link between non-financial control and financial control.

C. failing to set appropriate performance targets.

D. failing to set goals too high

Answer Key:

Question 25 of 25

4.0/ 4.0 Points

One way to help employees connect with the people and things that will help them achieve their professional goals is to:

A. Develop goals that stretch their ability

B. Give them assignments that are engaging

C. Connect people with mentors and help them build networks

D. Promote deserving employees

Answer Key:

 

 

 
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Marketing Research: Research Design Case Evaluation

When you apply critical thinking skills in the design of a study, it’s essential to maintain an open mind by considering the following:

1) considering viewpoints from different reliable sources

2) seeking and evaluating evidence to help formulate the problem under study

3) determining what information is factual or opinion based

4) using reasoning skills and suppressing emotion

5) having the ability to adapt to change

 

Directions for completing this assignment:

 

In this assignment, you will evaluate the Chestnut Ridge Country Club case study( Please see attachment below) by using your critical thinking skills. To successfully complete this assignment, write a 2-3 page critical essay covering the following topics:

 

1. Formulate a research problem.

2. Compare three basic types of research design (exploratory, descriptive and casual)

3. Evaluate the use of research design for each method

 

4. Determine appropriate research design method to use in marketing research process

 

Additional Requirements:

Microsoft Word

APA Citation

Double Spaced

2-3 page critical essay

 

Assignment Title: Research Design Case Evaluation

 

When you apply critical thinking skills in the design of a study, it’s essential to maintain an open mind by considering the following: 1) considering viewpoints from different reliable sources

2) seeking and evaluating evidence to help formulate the problem under study

3) determining what information is factual or opinion based

4) using reasoning skills and suppressing emotion

5) having the ability to adapt to change

 

Directions for completing this assignment:

 

In this assignment, you will evaluate the Chestnut Ridge Country Club case study by using your critical thinking skills. To successfully complete this assignment, write a 2-3 page critical essay covering the following topics:

1. Formulate a research problem.

2. Compare three basic types of research design (exploratory, descriptive and casual)

3. Evaluate the use of research design for each method

4. Determine appropriate research design method to use in marketing research process

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Case Scenario

 

Chestnut Ridge Country Club

 

 

The Chestnut Ridge Country Club has long maintained a distinguished reputation as one of the outstanding country clubs in the Elma, Tennessee, area. The club’s golf facilities are said by some to be the finest in the state, and its dining and banquet facilities are highly regarded as well. This reputation is due in part to the commitment by the board of directors of Chestnut Ridge to offer the finest facilities of any club in the area. For example, several negative comments by club mem- bers regarding the dining facilities prompted the board to survey members to get their feelings and perceptions of the dining facilities and food offerings at the club. Based on the survey findings, the board of directors established a quality control committee to oversee the dining room, and a new club manager was hired.

Most recently, the board became concerned about the number of people seeking membership to Chestnut Ridge. Although no records are kept on the number of membership applications received each year, the board sensed that this figure was declining. They also believed that membership applications at the three competing country clubs in the area—namely, Alden, Chalet, and Lancaster—were not experiencing similar declines. Because Chestnut Ridge had other facilities, such as tennis courts and a pool, that were comparable to the facilities at these other clubs, the board was perplexed as to why mem- bership applications would be falling at Chestnut Ridge.

To gain insight into the matter, the board of direc- tors hired an outside research firm to conduct a study of the country clubs in Elma, Tennessee. The goals of the research were (1) to outline areas in which Chestnut Ridge fared poorly in relation to other clubs in the area;

  • to determine people’s overall perception of Chestnut Ridge; and (3) to provide recommendations for ways to increase membership applications at the club.

 

 

Research Method

The researchers met with the board of directors and key personnel at Chestnut Ridge to gain a better understand- ing of the goals of the research and the types of services and facilities offered at a country club. A literature search of published research relating to country clubs uncov- ered no studies. Based solely on their contact with indi- viduals at Chestnut Ridge, therefore, the research team developed the survey contained in Exhibit 1. Because personal information regarding demographics and

attitudes would be asked of those contacted, the researchers decided to use a mail questionnaire.

The researchers thought it would be useful to survey members from Alden, Chalet, and Lancaster country clubs in addition to those from Chestnut Ridge for two reasons: (1) Members of these other clubs would be knowledgeable about the levels and types of services and facilities desired from a country club and (2) They had at one time represented potential members of Chestnut Ridge. Hence, their perceptions of Chestnut Ridge might reveal why they chose to belong to a different country club.

No public documents were available that contained a listing of each club’s members. Consequently, the researchers decided to contact each of the clubs person- ally to try to obtain a mailing list. Identifying themselves as being affiliated with an independent research firm conducting a study on country clubs in the Elma area, the researchers first spoke to the chairman of the board at Alden Country Club. The researchers told the chair- man that they could not reveal the organization sponsor- ing the study but that the results of their study would not be made public. The chairman was not willing to provide the researchers with the mailing list. The chair- man cited an obligation to respect the privacy of the club’s members as his primary reason for turning down the research team’s request.

The researchers then made the following proposal to the board chairman: In return for the mailing list, the researchers would provide the chairman a report on Alden members’ perceptions of Alden Country Club. In addition, the mailing list would be destroyed as soon as the surveys were sent. The proposal seemed to please the chairman, for he agreed to give the researchers a list- ing of the members and their addresses in exchange for the report. The researchers told the chairman they had to check with their sponsoring organization for approval of this arrangement.

The research team made similar proposals to the chairmen of the boards of directors of both the Chalet and Lancaster country clubs. In return for a mailing list of the club’s members, they promised each chairman a report outlining their members’ perceptions of their clubs, contingent on approval from the research team’s sponsoring organization. Both chairmen agreed to sup- ply the requested list of members. The researchers sub- sequently met with the Chestnut Ridge board of directors. In their meeting, the researchers outlined the situation and asked for the board’s approval to provide

each of the clubs with a report in return for the mailing

1The contributions of David M. Szymanski to the development of this case are gratefully acknowledged. ©Cengage Learning

lists. The researchers emphasized that the report wo

 

 

 

E x h i b i 1

 

Questionnaire Used to Survey Alden, Chalet, and Lancaster

 

Country Club Members

 

 

  • Of which club are you currently a member?
  • How long have you been a member of this club?
  • How familiar are you with each of the following country clubs?

 

Alden Country Club

very familiar (I am a member or I have visited the club as a guest)

somewhat familiar (I have heard of the club from others)

unfamiliar

 

Chalet Country Club

very familiar (I am a member or I have visited the club as a guest)

somewhat familiar (I have heard of the club from others)

unfamiliar

 

Chestnut Ridge Country Club

very familiar (I am a member or I have visited the club as a guest)

somewhat familiar (I have heard of the club from others)

unfamiliar

 

Lancaster Country Club

very familiar (I am a member or I have visited the club as a guest)

somewhat familiar (I have heard of the club from others)

unfamiliar

 

  • The following is a list of factors that may be influential in the decision to join a country club. Please rate the factors according to their im- portance to you in joining your country club. Circle the appropriate response, where 1 not at all important and 5 extremely important.

Golf facilities 1 2 3 4 5

Tennis facilities 1 2 3 4 5

Pool facilities 1 2 3 4 5

Dining facilities 1 2 3 4 5

Social events 1 2 3 4 5

Family activities 1 2 3 4 5

Number of friends who are members 1 2 3 4 5

Cordiality of members 1 2 3 4 5

Prestige 1 2 3 4 5

Location 1 2 3 4 5

 

  • The following is a list of phrases pertaining to Alden Country Club. Please place an X in the space that best describes your impressions of Alden. The ends represent extremes; the center position is neutral. Do so even if you are only vaguely familiar with Alden.

Club landscape is attractive. : : : : : : : : Club landscape is unattractive. Clubhouse facilities are poor. : : : : : : : : Clubhouse facilities are excellent. Locker room facilities are excellent. : : : : : : : : Locker room facilities are poor.

Club management is ineffective. : : : : : : : : Club management is effective.

Dining room atmosphere is pleasant. : : : : : : : : Dining room atmosphere is unpleasant. Food prices are unreasonable. : : : : : : : : Food prices are reasonable.

Golf course is poorly maintained. : : : : : : : : Golf course is well maintained. Golf course is challenging. : : : : : : : : Golf course is not challenging. Membership rates are too high. : : : : : : : : Membership rates are too low.

 

  • The following is a list of phrases pertaining to Chalet Country Club. Please place an X in the space that best describes your impressions of Chalet. Do so even if you are only vaguely familiar with Chalet.

Club landscape is attractive. : : : : : : : : Club landscape is unattractive. Clubhouse facilities are poor. : : : : : : : : Clubhouse facilities are excellent. Locker room facilities are excellent. : : : : : : : : Locker room facilities are poor.

 

 

 

 

 

 

E x h i b i 1

 

Questionnaire Used to Survey Alden, Chalet, and Lancaster

 

Country Club Members (Continued)

 

 

Club management is effective. : : : : : : : : Club management is ineffective.

Dining room atmosphere is pleasant. : : : : : : : : Dining room atmosphere is unpleasant. Food prices are unreasonable. : : : : : : : : Food prices are reasonable.

Food quality is excellent. : : : : : : : : Food quality is poor.

Golf course is poorly maintained. : : : : : : : : Golf course is well maintained. Golf course is challenging. : : : : : : : : Golf course is not challenging. Tennis courts are in excellent condition. : : : : : : : : Tennis courts are in poor condition. There are too many tennis courts. : : : : : : : : There are too few tennis courts.

Membership rates are too high. : : : : : : : : Membership rates are too low.

 

  • The following is a list of phrases pertaining to Chestnut Ridge Country Club. Please place an X in the space that best describes your im- pressions of Chestnut Ridge. Do so even if you are only vaguely familiar with Chestnut Ridge.

Club landscape is attractive. : : : : : : : : Club landscape is unattractive. Clubhouse facilities are poor. : : : : : : : : Clubhouse facilities are excellent. Locker room facilities are excellent. : : : : : : : : Locker room facilities are poor.

Club management is ineffective. : : : : : : : : Club management is effective.

Dining room atmosphere is pleasant. : : : : : : : : Dining room atmosphere is unpleasant. Food prices are unreasonable. : : : : : : : : Food prices are reasonable.

Food quality is excellent. : : : : : : : : Food quality is poor.

Golf course is poorly maintained. : : : : : : : : Golf course is well maintained.

Tennis courts are in poor condition. : : : : : : : : Tennis courts are in excellent condition. There are too many tennis courts. : : : : : : : : There are too few tennis courts.

Swimming pool is in poor condition. : : : : : : : : Swimming pool is in excellent condition. Membership rates are too high. : : : : : : : : Membership rates are too low.

 

  • The following is a list of phrases pertaining to Lancaster Country Club. Please place an X in the space that best describes your impres- sions of Lancaster. Do so even if you are only vaguely familiar with Lancaster.

Club landscape is attractive. : : : : : : : : Club landscape is unattractive. Clubhouse facilities are poor. : : : : : : : : Clubhouse facilities are excellent. Locker room facilities are excellent. : : : : : : : : Locker room facilities are poor.

Club management is ineffective. : : : : : : : : Club management is effective.

Dining room atmosphere is pleasant. : : : : : : : : Dining room atmosphere is unpleasant. Food prices are unreasonable. : : : : : : : : Food prices are reasonable.

Food quality is excellent. : : : : : : : : Food quality is poor.

Golf course is poorly maintained. : : : : : : : : Golf course is well maintained.

Tennis courts are in poor condition. : : : : : : : : Tennis courts are in excellent condition. There are too many tennis courts. : : : : : : : : There are too few tennis courts.

Swimming pool is in poor condition. : : : : : : : : Swimming pool is in excellent condition. Membership rates are too high. : : : : : : : : Membership rates are too low.

  • Overall, how would you rate each of the country clubs? Circle the appropriate response, where 1 poor and 5 excellent. Alden 1 2 3 4 5

Chalet 1 2 3 4 5

Chestnut Ridge 1 2 3 4 5

Lancaster 1 2 3 4 5

 

  • The following questions are designed to give a better understanding of the members of country clubs. Have you ever been a member of another club in the Elma area?

yes no

Approximately what is the distance of your residence from your club in miles?

0–2 miles 3–5 miles 6–10 miles 10+ miles

Age: 21–30 31–40 41–50 51–60 61 or over Sex: male female

Marital status: married single widowed divorced Number of dependents including yourself:

2 or less 3–4 5 or more

(Continued)

 

case 6 525

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

E x h i b i 1

 

Questionnaire Used to Survey Alden, Chalet, and Lancaster

 

Country Club Members (Continued)

 

 

Total family income:

Less than $20,000

$20,000–$29,999

$30,000–$49,999

$50,000–$99,999

$100,000 or more

Do not know/Refuse to answer

Thank you for your cooperation!

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

contain no information regarding Chestnut Ridge nor information by which each of the other clubs could com- pare itself to any of the other clubs in the area, in con- trast to the information to be provided to the Chestnut Ridge board of directors. The report would only contain a small portion of the overall study’s results. After care- fully considering the research team’s arguments, the board of directors agreed to the proposal.

 

 

Membership Surveys

A review of the lists subsequently provided by each club showed that Alden had 114 members, Chalet had 98 members, and Lancaster had 132 members. The researchers believed that 69 to 70 responses from each membership group would be adequate. Anticipating a 70 to 75% response rate because of the unusually high involvement and familiarity of each group with the sub- ject matter, the research team decided to mail 85 to 90 surveys to each group; a simple random sample of mem- bers was chosen from each list. In all, 87 members from each country club were mailed a questionnaire (348 sur- veys in total). Sixty-three usable surveys were returned from each group (252 in total) for a response rate of 72%. Summary results of the survey are presented in the exhibits. Exhibit 2 gives members’ overall ratings of the

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

country clubs, and Exhibit 3 shows their ratings of the various clubs on an array of dimensions. Exhibit 4 is a breakdown of attitudes toward Chestnut Ridge by the three different membership groups: Alden, Chalet, and Lancaster. The data are average ratings of respondents. Exhibit 2 scores are based on a five-point scale, where ‘‘1’’ is poor and ‘‘5’’ is excellent. The last two are based on seven-point scales in which ‘‘1’’ represents an extremely negative rating and ‘‘7’’ an extremely positive rating.

 

 

 

Questions

  • What kind of research design is being used? Is it a good choice?
  • Do you think it was ethical for the researchers not to disclose the identity of the sponsoring organiza- tion? Do you think it was ethical for the boards of directors to release the names of their members in return for a report that analyzes their members’ per- ceptions toward their own club?
  • Overall, how does Chestnut Ridge compare to the other three country clubs (Alden, Chalet, and Lancaster)?
  • In what areas might Chestnut Ridge consider mak- ing improvements to attract additional members?

 

 

 

E x h i b i Average Overall Ratings of Each Club by Club Membership of the

Respondent

 

 

Composite Ratings Across All Members

 

3.85

3.07

4.35

3.95

E x h i b i Average Ratings of the Respective Country Clubs across Dimensions

 

Country Club

Dimension Alden Chalet Chestnut Ridge Lancaster

 

 

Club landscape

 

6.28

 

4.65

 

6.48

 

5.97

Clubhouse facilities

5.37

4.67

6.03

5.51

Locker room facilities

4.99

4.79

5.36

4.14

Club management

5.38

4.35

5.00

5.23

Dining room atmosphere

5.91

4.10

5.66

5.48

Food prices

5.42

4.78

4.46

4.79

Food quality

a

4.12

5.48

4.79

Golf course maintenance

6.17

5.01

6.43

5.89

5.10

4.52

5.08

4.14

4.00

3.89

 

 

 

 

 

 

 

Golf course challenge 5.14 5.01 a 4.77

Condition of tennis courts b

Number of tennis courts b

Swimming pool b b 4.66 5.35

Membership rates 4.49 3.97 5.00 4.91

aQuestion not asked

bNot applicable

 

 

 

E x h i b i Attitudes toward Chestnut Ridge by Members of the Other

Country Clubs

 

 

Dimension Alden Chalet Lancaster

 

 

Club landscape

 

6.54

 

6.54

 

6.36

Clubhouse facilities

6.08

6.03

5.98

Locker room facilities

5.66

5.35

5.07

Club management

4.97

5.15

4.78

Dining room atmosphere

5.86

5.70

5.41

Food prices

4.26

4.48

4.63

Food quality

5.52

5.75

5.18

Golf course maintenance

6.47

6.59

6.22

Condition of tennis courts

4.55

4.46

4.55

Number of tennis courts

4.00

4.02

3.98

Swimming pool

5.08

4.69

4.26

Membership rates

5.09

5.64

4.24

 
"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"

Operations Management

Question 1

a. Give two examples each of a functional product and an innovative product.

b. Characterize functional/innovative products by choosing the appropriate adjective from the last column.

Product Characteristic Functional Product Innovative Product Choose From
Lifecycle length

 

    Long/Short

 

Contribution margin

 

    High/Low

 

Product variety

 

    Lot/Little

 

Forecast errors

 

    Large/Small
Stockout rates

 

    High/Low
Forced end-of-season markdowns

 

    Frequent/Rare
Order lead time

 

    Long/Short

c. It is claimed that a supply chain has two functions: a physical function, and a market mediation function. Explain what these terms mean.

d. Supply chains are generally of two types: physically efficient supply chains, and market responsive supply chains. What type of supply chain would be suitable for a functional product? Why?

Question 2

a. How do demand variability and lead time impact a firm’s inventory levels?

b. Consider a firm redesigning its logistics network. What are the advantages to having a small number of centrally located (large) warehouses as opposed to a large number of decentralized (small) warehouses closer to the end customers?

c. “Combining two warehouses into one is most beneficial when the demands at the two warehouses are negatively correlated.” True or False? Explain your reasoning.

d. A firm operates both a large national DC and numerous smaller regional warehouses. Which types of products should be stored centrally and which ones regionally?

Question 3

The boardwalk on the Paradise City beach is 4 miles long with mile markers at 0, 1, 2, 3, and 4 miles, There are 100 customers at each mile marker and each customer’s demand for ice cream is given by the function: D = 24 – 4d, where d = distance between customer and nearest ice cream vendor.

 

 

0 1 2 3 4

A B

There are two ice cream vendors (A and B) and they are currently located at mile markers 1 and 2 as shown above.

a. Find out the demand at each vendor and total demand for the system.

b. Are these the best locations of the vendors from the system’s point of view? If not, suggest better locations for the vendors. What is the total system demand now?

c. Compute how much and to whom an incentive should be offered so that the vendors relocate to the optimal locations from the system’s point of view? (Assume one unit of ice cream generates $1.50 in profit.)

Question 4

RFC Bearings has just entered the U.S .market. It has three major DCs in the Atlanta, Boston, and Chicago areas.

Annual demand served by each DC is estimated to be:

Atlanta 10,000 Boston 20,000 Chicago 15,000

Four plants (Memphis, Philadelphia, Toledo) supply the DCs. Per-unit transportation costs and plant capacities are given in the following table:

Plant Location Distribution Center Plant

Capacity

  Atlanta Boston Chicago  

Memphis $3 9 7 30,000
Philadelphia 5 2 4 35,000
Toledo 6 6 2 35,000

Using the notation:

XMA = Qty shipped from Memphis to Atlanta

XMB = Qty shipped from Memphis to Boston, etc.,

write down a model that will determine the optimal demand allocation (i.e. minimize transportation costs.)

Suppose now that the three locations (Memphis, Philadelphia, Toledo) are potential locations, i.e., each plant

would only be constructed if it improves overall cost (i.e., transportation plus plant fixed costs). The data is

repeated here with the (annualized) plant fixed costs shown additionally.

Plant Location Distribution Center Plant

Capacity

Annualized

Fixed Costs

  Atlanta Boston Chicago  

 

Memphis $3 9 7 30,000 $50,000
Philadelphia 5 2 4 35,000 45,000
Toledo 6 6 2 35,000 48,000

What changes would you make to the model in part (a) so that we can determine the optimal locations of the plants as well as the optimal demand allocation (i.e. minimize both transportation as well as fixed costs).

[Do not attempt to solve this model—you are only asked to write down the model, i.e. objective function and constraints.]

Question 5

Consider the following data pertaining to a distribution center.

Parameter Value
Mean Weekly Demand 100
Standard Deviation of Weekly Demand 30
Lead Time 2 Weeks
# of weeks in year 50

Ordering cost: $50 /order

Holding cost: $4 /unit /week (This is H, not hc – eq. (11.2) on p. 273 of text.)

Cycle service level: 97%

Measure Computation
order quantity

 

 
cycle inventory

 

 
safety inventory

 

 
reorder level

 

 
annual inventory holding cost

 

 
number of orders per year

 

 
annual ordering cost

 

 

Question 6

Suppose the 100 retail stores of a supermarket chain have identical weekly demand for a product (mean 200, standard deviation 120). There is zero correlation between the retailers’ demands. The lead time to replenish each retail store is 4 weeks. A cycle service level of 95% is desired.

a. If each retail store maintains its own dedicated warehouse, how much safety stock is needed at each store?

b. What is the total safety stock across all stores?

c. It is now proposed to have a central DC servicing all 100 retailers. The lead time to replenish the DC is the same (4 weeks). How much safety stock is needed at the DC to maintain the same cycle service level?

d. If annual inventory holding cost is $50/unit/year, how much money was saved as a result of the decrease in the safety stock?

Question 7

AspenWear, a retailer of ski wear needs to place an order for the Mirabelle, a designer ski jacket for the high-end market. The jacket retails for $600 and costs AspenWear $250 from a source in China. Due to fickle customer tastes, any surplus jackets at the end of the ski season cannot be carried over to the next season but must be disposed of. A bargain discounter has offered to buy these jackets at $150 each (and plans to mark them up to $300). Also, because of the long lead times involved in sourcing from China, there is realistically only one opportunity to place an order during each season (in November of each year so that the jackets will be ready by the following August). From past history, AspenWear believes that demand for the Mirabelle can be represented by a normal distribution with mean 6000 and standard deviation 3600. Their current ordering rule is as follows: Order Quantity = Mean Demand + (1/3)*(Standard Deviation)

a. Compute the order quantity that will maximize AspenWear’s expected profit.

b. Compare the two quantities (the one computed above plus the current rule) in terms of the following performance measures: expected salesexpected profitexpected overstock, and fill rate. (It would be helpful if you display your results in a 2 x 4 table—2 quantities, 4 performance measures.)

Question 8

A movie studio sells the latest movie on DVD to Blockbuster at $10 per DVD. The marginal production cost for the movie studio is $2 per DVD. Blockbuster prices each DVD at $25 to its customers. DVD s are kept on the regular rack for a one-month period, after which they are discounted down to $3. Blockbuster places a single order for DVDs. Their current forecast is that sales will be normally distributed, with a mean of 50,000 and a standard deviation of 30,000.

a. How many DVDs should Blockbuster order? What is its expected profit?

b. What is the profit that the studio makes given Blockbuster’s actions?

c. The studio is offering Blockbuster a deal: They will sell the DVD to blockbuster at $5 each in return for a 65-35 split of the revenue (65% to Blockbuster). Should Blockbuster agree to this deal?

 
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FINANCIAL INSTITUTIONS FINAL EXAM

University of Miami Financial Institutions

Professor Indraneel Chakraborty Fall 2020

Final Exam

 

Please read the exam instructions carefully. After you read the instructions please print your name and student ID and sign the exam at the bottom and on the answer booklet.

1. Please do not discuss the examination with anyone else.

2. This exam book has 7 short answer questions (15 points each for 6 questions and 25 points for one question) worth a total of 115 points.

3. The exam is administered under the University’s rules of academic conduct; the Code of Academic Integrity applies. Discussing the questions with anyone who has not taken the test will violate the Code of Academic Integrity, and such cases will be dealt with extremely stringently.

 

First 3 Letters of Last Name: QUI

Name (Print): Erick Quinones Perez

E-mail ID: [email protected]

 

 

Best of luck!

 

 

 

 

1. (Monetary Economics and Finance)

a) What is the velocity of money?

b) What is the reason behind the decline in the velocity of money in recent years? (15 points)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2. (MBS/ABS) a. You have a client who is interested in purchasing fixed income securities with high interest rate risk. Unfortunately, all you have available on your balance sheet to sell is an MBS which does not have sufficient duration risk according to him. Can you tranche the MBS somehow to meet his demand? Please explain in some detail.

b. You want to bet that the default rates on mortgages are going to increase. How can you place such a bet in the mortgage markets? Explain your strategy in some detail. (15 points)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3. (MBS/ABS) a. Does high volatility in long term interest rates increase prepayment risk? Explain, why or why not.

b. If the long term interest rates come down, would the value of an MBS security increase or decrease? Please explain. (15 points)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4. (MBS/ABS) Consider a bank that has a pool of current fixed rate mortgages that are worth $100 million, yield a WAC of 3.8%, and have a WAM of 360 months with 125 PSA. What are the cash flows for the first two months? Estimate the beginning balance for month 3. (25 points)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5. Separated by over 3,000 nautical miles and five time zones, money and foreign exchange markets in both London and New York are very efficient. The following information has been collected from the respective areas:

 

Assumptions   London   New York
Spot exchange rate ($ per £)   1.2914   1.2914
One-year Treasury bill rate (respective countries)   0.100%   1.090%
Expected inflation rate   Unknown   2.400%

 

 

a. What do the financial markets suggest for inflation in U.K. next year?

b. Estimate today’s one-year forward exchange rate between the dollar and the pound. (15 points)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6. How does blockchain technology work? Please explain. (15 points)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7. (Monetary Policy) Explain the “Taylor Rule.’’ (15 points)

 
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