ACMB333 T7

What is the primary objective of the Theory of Constraints (TOC)?

• To increase inventory and decrease throughput.

• To maximize throughput while minimizing inventory and operating costs.

• To eliminate direct labor costs.

• To increase the number of bottlenecks in production.

Which of the following is the key objective of Total Quality Management (TQM)?

• Achieving cost reduction at the production stage only.

• Creating a process of continuous improvement involving all business functions.

• Using push systems to move products faster in production.

• Reducing the quality of production to minimize operational costs.

Target costing is most effective during which stage of the product development cycle?

• Manufacturing stage

• Post-production stage

• Planning and design stage

• Marketing and sales stage

What is the first step in the Value Chain Analysis process?

• Identifying the firm’s customers’ value-creating activities

• Evaluating differentiation strategies.

• Identifying sustainable differentiation.

• Reducing production costs to improve customer value.

Which of the following is a defining characteristic of Kaizen Costing?

• It is applied at the product design stage only.

• It focuses on cost reduction through large, one-time changes.

• It encourages continuous, small, incremental improvements.

• It aims to reduce costs by redesigning the value chain.

Which of the following factors indicates that the Throughput Accounting Ratio (TPAR) is insufficient?

• TPAR is greater than 1.

• TPAR is exactly 1.

• TPAR is less than 1.

• TPAR is equal to throughput contribution.

Just-in-Time (JIT) aims to increase work-in-progress inventory to avoid production delays.

• True

• False

The Pareto Principle suggests that 80% of results are driven by 20% of the causes.

• True

• False

Under Target Costing, if the target cost is not achieved, companies are required to raise the selling price of the product.

• True

• False

Activity-Based Management (ABM) focuses on short-term production decisions only.

• True

• False