During a Meeting,senior Executives of a Consumer Products Company Tackled

question 126

Multiple Choice

During a meeting,senior executives of a consumer products company tackled the problem that they were late in detecting several consumer trends,such as the trend towards using see-through plastics in kitchenware.While trying to determine the source of this problem,one executive said: "The main problem here is that we need to find a better industrial design firm to design our products." Which of the following best describes the decision-making problem that this executive is exhibiting?

• A)The executive is engaging in escalation of commitment.
• B)The executive is being too creative.
• C)The executive is acting as a devil's advocate when the situation calls for consensus.
• D)The executive is engaging in groupthink.
• E)The executive is defining the problem in terms of a solution.

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Definitions:

Variable Cost

Variable cost refers to expenses that change in proportion to the activity or volume of production or sales in a business.

EBIT

A financial metric, Earnings Before Interest and Taxes, represents a company's earnings with all costs deducted except for interest and income taxes.

Debt Ratio

A financial ratio that measures the proportion of a company's total debt to its total assets, indicating its leverage level.

Operating Leverage

A measure of a company's fixed versus variable costs, indicating how a company's operating income changes in response to changes in sales volume.