ACCA P3 flashcards – set 4

See also ACCA P3 Flashcards: Set 1 | Set 2 | Set 3 | Set 4


What are Johnson and Scholes’s criteria for judging the suitability of a strategy

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Suitability
Acceptability
Feasibility

What are the potential problems when relying on linear regression results?

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The fit must be tested using the coefficient of correlation (r), or the coefficient of determination (r2).
If only a few points are used the results are not reliable
Extrapolation (predicting outside the range) is dangerous
Other known influences (such as inflation) should be removed first.
Even good correlation does no prove cause and effect.

What are the two parts of a time series analysis that are analysed using moving averages?

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The trend (the underlying increase/decrease);
The seasonal variations

What is the expected profit arising from the following and what are the problems using expected values in project appraisals?

Outcome I p = 0.3 Profit = 3000
Outcome II p = 0.7 Profit = 5000

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0.3 x 3000 + 0.7 x 5000 = 4400

Problems:
How are probabilities estimated
The expected value is usually not ‘expected’
Risk is not captured (eg a poor outcome of 3000 is quite possible in the above case)

What is meant by marketing?

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Establish needs (market research) and develop the appropriate product or service (R&D).

What would by included as product features?

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* Quality
* Design
* Brand
* Packaging

What is a data warehouse and data mining?

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A data warehouse is a vast collection of historic transaction data (eg, sales by a supermarket).
Data mining is searching though that looking for patterns and associations that might be helpful in increasing profits.

What is non-price competition?

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When customers consider more than the price when buying. For example, a strong brand can stimulate sales.

What is penetration pricing?

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A very low initial price to gain a large market share. A very large market share might allow the low price to be sustained and can act as a barrier to entry.

What is price skimming?

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Initially a very high price (as some customers will pay that). Then the price is lowered to attract other customers and to sale greater numbers o goods.

What are the desirable characteristics of a test market?

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* Small
* Representative
* Stable
* Suitable facilities for promotion and delivery.

What is ‘transactions marketing’ and ‘relationship marketing’?

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Transactions marketing: Focuses on the product and develops marketing mixes for it according to the needs customers satisfy when they buy it.
Relationship marketing: Seeks to attract, maintain and enhance customer relationships by focusing on the whole satisfaction experienced by the customer when dealing with the firm.

What are the two types of review that should form part of a project completion report?

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* Post-project review – This is about how well the project was conducted
* Post implementation review – This is about what the project achieved eg costs v benefits

What is meant by ‘benefits realisation’?

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Benefits arising from projects are not automatic even in a technically successful project.
Therefore, the project manager should carry out tasks such as: demonstrations and presentations, training, managing and championing change.

What are three determinants of risk in a project?

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How well is the project scope defined?
How large is the project?
How complex is the project?

What is a critical activity and a project critical path?

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The critical determines the time it will take to complete a project.
A critical activity lies on the critical path.
If a critical activity takes longer, project completion will be delayed.

What are the project management variables?

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* Cost
* Time
* Quality
* Scope

What are the typical qualities of a project manager?

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* Leadership abilities, including the ability to motivate
* Technical ability in running projects and in the subject matter
* Ability to negotiate with project sponsors, project team members and suppliers.
* Reporting on progress and difficulties
* The ability to stay calm in a crisis
* Excellent communication
* Ability to delegate to team members.

What are the typical purposes of a project initiation document?

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* Defines the project, its scope and its deliverables.
* Justifies the project: cost/benefit analysis; risk analysis.
* Secures funding for the project.
* Defines the roles and responsibilities of project participants.
* Gives people the information they need to be productive and effective right from the start.
What? Who? How? How much? Why? When?

What are the three classes of benefit that can be identified when appraising projects?

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* Observable
* Measurable
* Quantifiable
* Financial

What tools can be used on a project cost/benefit analysis?

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* Net present value/payback/ROCE
* Sensitivity analysis and risk analysis
* Forecasting techniques
* Expected values
* Decision trees

What are project gateways?

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As each stage of a project is completed, it is subject to independent review.
The ‘gateway’ is not opened to the next stage unless the last stage has been successfully completed.

What are the typical characteristics of a project?

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A start/end, non-routine
Novel, unique challenges
Team members from different backgrounds so different: priorities, terminology and outlooks
No benefit until finished

What is meant by: job enlargement, job rotation and job enrichment?

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They all attempt to increase motivation. Job enlargement = more of almost exactly the same; a horizontal change
Job rotation = moving round jobs of the same skill level; a horizontal change
Job enrichment = introducing greater interest and challenge to a job to increase; a vertical change.
Only job enrichment is likely to be very successful at increasing motivation.

What are the three approaches to job design?

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* Job enlargement,
* Job rotation
* Job enrichment.

What three items are usually reviewed at appraisal meetings?

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* Past performance
* Future potential and career path
* Rewards


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