An Operations Manager Is Performing a Factor-Rating Analysis to Help

question 12

Multiple Choice

An operations manager is performing a factor-rating analysis to help her choose an outsourcing provider. She is focusing on three factors: A, B, and C, with weights of .30, .20, and .50, respectively. She has scored one potential outsourcer, Ling Services, on each of the factors using a scale of 10-50. Ling Services received a score of 30 for factor A, 46 for factor B, and 22 for factor C. What is the factor-rating score for Ling Services?

• A) 98.0
• B) 32.7
• C) 21.8
• D) 29.2
• E) 30.8

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Definitions:

Fixed Costs

Costs that do not change with the level of production or sales over a certain range and period, such as rent, salaries, and insurance premiums.

Unit Contribution Margin

The amount by which the selling price of a unit exceeds its variable costs, contributing to covering fixed costs and generating profit.

Selling Price

The amount for which a product or service is sold to the customer, determined by factors like cost, market demand, and competitive pricing.

Margin Of Safety

The difference between actual sales and sales at the break-even point. It measures the extent to which sales can decline before a business incurs a loss.