QUESTION 38 You are leading a committee deciding which capital improvement project to fund in the...

  

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QUESTION 38 You are leading a committee deciding which capital improvement project to fund in the factory. You have been directed by corporate management that when you choose a project that you consider certain factors. The strategic plan is focused on improving productivity and quality, so the project you choose should focus on one of those areas. Management is willing to fund a project up to $1.5 million. There are three performance measures that will be used to select the project: payback period (lower is better), return on investment (higher is better), and impact index (higher is better). The committee decides to weight the performance measures: payback period - 4, return on investment -7, and impact index - 9. Using the formal decision making process, which project(s) is/are ineligible for consideration due to the strategic plan? Project A B С D E F 1. Projects A, C, D 2. Project B only 3. Projects A, D, F 4. Projects A and B 5. Projects B, E, F Focus Productivity Capacity Quality Productivity Quality Productivity Cost ($) 950,000 500,000 800,000 1,500,000 1,800,000 1,750,000 Payback (Years) 2.0 1.5 3.0 3.5 1.5 2.0 ROI (%) 15 24 12 17 17 21 Impact Index 7 8 5 6 8 4 QUESTION 39 You are leading a committee deciding which capital improvement project to fund in the factory. You have been directed by corporate management that when you choose a project that you consider certain factors. The strategic plan is focused on improving productivity and quality, so the project you choose should focus on one of those areas. Management is willing to fund a project up to $1.5 million. There are three performance measures that will be used to select the project: payback period (lower is better), return on investment (higher is better), and impact index (higher is better). The committee decides to weight the performance measures: payback period - 4, return on investment - 7, and impact index - 9. Using the formal decision making process, the committee decides the final alternative by Project Impact Index A B C Focus D E F Productivity Capacity Quality Cost ($) 950,000 Payback (Years) 2.0 1.5 3.0 3.5 1.5 ROI (%) 500,000 800,000 Productivity 1,500,000 1,800,000 Quality Productivity 1,750,000 21 1. choosing the project with the highest total weighted score estimated from the focus, cost, payoff period, ROI, and impact index. 2. choosing the project with the lowest impact index. Ⓒ 3. choosing the project with the highest total weighted score estimated from the payoff period, ROI, and impact index. Ⓒ4. choosing the project with the highest unweighted score. 5. choosing the project with the highest ROI. 2.0 15 24 12 7 17 17 8 5 6 8 4 QUESTION 38 You are leading a committee deciding which capital improvement project to fund in the factory. You have been directed by corporate management that when you choose a project that you consider certain factors. The strategic plan is focused on improving productivity and quality, so the project you choose should focus on one of those areas. Management is willing to fund a project up to $1.5 million. There are three performance measures that will be used to select the project: payback period (lower is better), return on investment (higher is better), and impact index (higher is better). The committee decides to weight the performance measures: payback period - 4, return on investment -7, and impact index - 9. Using the formal decision making process, which project(s) is/are ineligible for consideration due to the strategic plan? Project A B С D E F 1. Projects A, C, D 2. Project B only 3. Projects A, D, F 4. Projects A and B 5. Projects B, E, F Focus Productivity Capacity Quality Productivity Quality Productivity Cost ($) 950,000 500,000 800,000 1,500,000 1,800,000 1,750,000 Payback (Years) 2.0 1.5 3.0 3.5 1.5 2.0 ROI (%) 15 24 12 17 17 21 Impact Index 7 8 5 6 8 4 QUESTION 39 You are leading a committee deciding which capital improvement project to fund in the factory. You have been directed by corporate management that when you choose a project that you consider certain factors. The strategic plan is focused on improving productivity and quality, so the project you choose should focus on one of those areas. Management is willing to fund a project up to $1.5 million. There are three performance measures that will be used to select the project: payback period (lower is better), return on investment (higher is better), and impact index (higher is better). The committee decides to weight the performance measures: payback period - 4, return on investment - 7, and impact index - 9. Using the formal decision making process, the committee decides the final alternative by Project Impact Index A B C Focus D E F Productivity Capacity Quality Cost ($) 950,000 Payback (Years) 2.0 1.5 3.0 3.5 1.5 ROI (%) 500,000 800,000 Productivity 1,500,000 1,800,000 Quality Productivity 1,750,000 21 1. choosing the project with the highest total weighted score estimated from the focus, cost, payoff period, ROI, and impact index. 2. choosing the project with the lowest impact index. Ⓒ 3. choosing the project with the highest total weighted score estimated from the payoff period, ROI, and impact index. Ⓒ4. choosing the project with the highest unweighted score. 5. choosing the project with the highest ROI. 2.0 15 24 12 7 17 17 8 5 6 8 4

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