Bec_Cost_Fin

Question 1

What is the main reason for internal failure costs?

Answer 1

Detection of nonconforming with products and services specifications.

Example: Rework, Scrap, Reinspection, Retesting

Question 2

What are the costs associated with PRODUCT QUALITY?

Answer 2

• Prevention
• Appraisal
• Internal failure
• External failure
• Tooling changes

Question 3

What are the Cost of Quality?

Answer 3

Conformance Costs

Prevention costs and Appraisal costs

Noncorformance Costs

Internal Failure and External Failure costs

Question 4

What are the main considerations in a BALANCE SCORECARD approach?

Answer 4

1. Financial
2. Internal Business Process
3. Customer
4. Human Resources Control

INNOVATION is also important consideration in a Balance Scorecard Approach.

Question 5

What is the main objective of BENCHMARKING?

Answer 5

Benchmarking involves identifying standards for CRITICAL SUCCESS FACTORS OF A FIRM.

It sometimes entails identifying peers and industry leaders who practices are best-in-class (or world-class).

Question 6

What are some examples of APPRAISAL COSTS?

Answer 6

• Statistical Quality Checks
• Inspections
• Testing
• Maitenance of lab

Question 7

What type of cost is REDESIGN OF A PROCESS cost?

Answer 7

PREVENTION COSTS

Question 8

State some specific types of CONFORMANCE and NON-COMFORMANCE costs.

Answer 8

CONFORMANCE COSTS:

Prevention and Appraisal Costs

NON-CONFORMANCE COSTS:

Internal and External Failure Costs

Question 9

What is the main objective of cash budget?

Answer 9

To anticipate cash flows so that excess funds can be invested to minimize the need for interim financing.

Question 10

What is a transaction risk?

Answer 10

This arises due to exposure to uncertainty that may impact expected return from a DEAL OR TRANSACTION. e.g. foreign exchange risk, commodity risk and time risk.

Question 11

WHAT IS ECONOMIC RISK?

Answer 11

Risk that change in macroeconomic condition would negatively impact a company or an investment.

Question 12

What type of risks affect exposure to EXCHANGE RISKS?

Answer 12

• ECONOMIC RISKS
• TRANSLATION RISKS

NOT TRANSACTION RISKS.

Question 13

What is one of the most of the most effective to minimize foreign currency risks for a company that both imports and exports items in foreign countries?

Answer 13

Hold PAYABLES and RECEIVABLES in the SAME CURRENCY.