Which of the following characteristics applies to an organization that adopts a flat structure?

• A.The tower-level managers are encouraged to exercise creativity when solving problems
• B.The structure is dispersed geographically
• C.The span of control is wide
• D.The hierarchy levels are more numerous.

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Violation of which assumption underlying regression analysis is prevalent in time series analysis?

• A.Variance of error term is constant.
• B.Error terms are independent.
• C.Distribution of error terms is normal.
• D.Expected value of error term equals zero.

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The correlation coefficient that indicates the weakest linear association between two variables is:

• A.-0.73
• B.-0.11
• C.0.12
• D.0.35

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Organization X owns a 38 percent equity stake in Organization Y.
Which of the following statements is true regarding the financial treatment for this relationship?

• A.Y should be reported as a footnote to X's financial statements
• B.Y should not be reported by X as X does not have a controlling interest
• C.X must consolidate the financial statements for both organizations
• D.Y should be listed as an investment asset on X's balance sheet

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The Huron Corporation purchases 60,000 headbands per year. The average purchase lead time is 20 working days, and the maximum lead time is 27 working days. Safety stock equals 1,750 units. The corporation works 240 days per year. Huron should reorder headbands when the quantity in inventory reaches:

• A.5,000 units.
• B.6,750 units.
• C.1,750 units.
• D.5,250 units.

Correct Answer: B

The reorder point is the quantity on hand when an order is placed. If it has 20-day normal lead time, a safety stock of 1,750 units, and usage of 250 units per day, an order should be placed when 27 days of inventory are on hand, a total of 6,750 units 250 units 27 days).
Jed Ryerson Computer Furniture, Inc. RCF) manufactures a line of office computer chairs. The annual demand for the chairs is estimated to be 5,000 units. The annual cost to hold one unit in inventory is US 10 per year, and the cast to initiate a production run is US $1,000. There are no computer chairs on hand, and RCF has scheduled four equal production runs of computer chairs for the coming year, the first of which is to be run immediately. RCF has 250 business days per year, sales occur uniformly throughout the year, and production start-up is within one day. RCF is considering using the following formula for determining the economic order quantity EOQ):

If: A = cast to initiate a production run per purchase order D = annual unit demand K = cost of carrying one unit per year

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