Firms Can Use a Value Chain Analysis of Their Industry

question 36

Multiple Choice

Firms can use a value chain analysis of their industry

• A)as the basis of their customer segmentation.
• B)to divide and locate production between countries with different natural resources that suit each stage of production.
• C)to identify the profitability of production at each stage of the firm value chain.
• D)to definitively categorize their suppliers.

Apply the concepts of ROI and residual income in real-world divisional performance evaluation scenarios.

Understand the concept of residual income and how it's calculated for a division.

Comprehend the return on investment (ROI) metric and its application in evaluating divisional performance.

Analyze the factors determining the minimum required rate of return in different contexts.

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Definitions:

Anchoring And Adjustment

A cognitive bias in which an individual relies too heavily on an initial piece of information (anchor) to make subsequent judgments or decisions.

Availability

The state of being readily obtainable or accessible when needed or desired.

Projection

A psychological defense mechanism where an individual attributes their own unacceptable thoughts, feelings, or motives onto someone else.

Representativeness

A cognitive heuristic in decision-making, where the similarity of objects or events is used to infer the probability of an event or the categorization of an object.