IIBM MBA FIRST SEMESTER EXAM QUESTION AND ANSWER

 IIBM MBA FIRST SEMESTER EXAM QUESTION AND ANSWER 

Examination Paper of Managerial Economics

IIBM Institute of Business Management

IIBM Institute of Business Management

Subject Code-B106

Examination Paper

Managerial Economics

MM.100

Section A: Objective Type & Short Questions (30 marks)

Part one:

Multiple choice:

I.Demand is determined by

(1)

a) Price of the product

b) Relative prices of other goods

c) Tastes and habits

d) All of the above

II. When a firm’s average revenue is equal to its average cost, it gets (1)

a) Super profit

b) Normal profit

c) Sub normal profit

d) None of the above

III. Managerial economics generally refers to the integration of economic theory with business

(1)

a) Ethics

b) Management

c) Practice

d) All of the above

IV. Which of the following was not immediate cause of 1991 economic crisis (1)

a) Rapid growth of population

b) Severe inflation

c) Expanding Fiscal deficit

d) Rising current account deficit

V.Money functions refers to : (1)

a) Store of value

b) Medium of Exchange

c) Standard of deferred payments

d) All of the above VI. Given the price, if the cost of production increases because of higher price of raw materials, the supply (1) a) Decreases b) Increases c) Remains same d) Any of the above

 This section consists of multiple choices and Short Notes type questions.

 Answer all the questions.

 Part one questions carry 1 mark each & Part two questions carry 5 marks each.

Examination Paper of Managerial Economics

IIBM Institute of Business Management

VII. Total Utility is maximum when (1)

a. Marginal Utility is maximum

b. Marginal Utility is Zero

c. Both of the above

d. None Of The Above

VIII. Cardinal approach is related to (1)

a. Equimarginal Curve

b. Law of diminishing returns

c. Indifference Curve

d. All of the above

IX. Marginal Utility curve of a consumer is also his (1)

a) Supply Curve

b) Demand Curve

c) Both of above

d) None of above

X. Government of India has replaced FERA by (1)

a) The competition Act

b) FRBMA

c) MRTP Act

d) FEMA

Part Two:

1. What is Managerial Economics? What is its relevance to Engineers/Managers? (5)

2. “Managerial Economics is economics that is applied in decision making” Explain? (5)

3. Differentiate b/w, Micro economics vs. macroeconomics? (5)

4. Factors Affecting Price Elasticity of Demand? (5)

Section B: Caselets (40 marks)

END OF SECTION A

 This section consists of Caselets.

 Answer all the questions.

 Each Caselet carries 20marks.

 Detailed information should form the part of your answer (Word limit 150 to 200 words).

IIBM Institute of Business Management

Examination Paper of Managerial Economics

Caselet1

Dabur is among the top five FMCG companies in India and is positioned successfully on the specialist herbal platform. Dabur has proven its expertise in the fields of health care, personal care, home care and foods. The company was founded by Dr. S. K. Burman in 1884 as small pharmacy in Calcutta (now Kolkata), India. And is now led by his great grandson Vivek C. Burman, who is the Chairman of Dabur India Limited and the senior most representative of the Burman family in the company. The company headquarter is in Ghaziabad, India, near the Indian capital New Delhi, where it is registered. The company has over 12 manufacturing units in India and abroad. The international facilities are located in Nepal, Dubai, Bangladesh, Egypt and Nigeria. S.K. Burman, the founder of Dabur, was trained as a physician. His mission was to provide effective and affordable cure for ordinary people in far-flung villages. Soon, he started preparing natural remedies based on Ayurveda for diseases such as Cholera, Plague and Malaria. Due to his cheap and effective remedies, he became to be known as ‘Daktar’ (Indian izedversion of ‘doctor’). And that is how his venture Dabur got its name—derived from Daktar Burman. The company faces stiff competition from many multinational and domestic companies. In the Branded and Packaged Food and Beverages segment major companies that are active include Hindustan Lever, Nestle, Cadbury and Dabur. In case of Ayurvedic medicines and products, the major competitors are Baidyanath, Vicco, Jhandu, Himani and other pharmaceutical companies.

Vision statement of Dabur says that the company is “dedicated to the health and wellbeing of every household”. The objective is to “significantly accelerate profitable growth by providing comfort to others”. For achieving this objective Dabur aims to:

 Focus on growing core brands across categories, reaching out to new geographies, within and outside India, and improve operational efficiencies by leveraging technology.

 Be the preferred company to meet the health and personal grooming needs of target consumers with safe, efficacious, natural solutions by synthesizing deep knowledge of Ayurveda and herbs with modern science.

 Be a professionally managed employer of choice, attracting, developing and retaining quality personnel.

 Be responsible citizen with a commitment to environmental protection.

 Provide superior returns, relative to our peer group, to our shareholders.

Chairman of the company

Vivek C. Burman joined Dabur in 1954 after completing his graduation in Business Administration from the USA. In 1986 he was appointed as the Managing Director of Dabur and in 1998 he took over as Chairman of the Company.

IIBM Institute of Business Management

Examination Paper of Managerial Economics

Under Vivek Burman’s leadership, Dabur has grown and evolved as a multi-crore business house with a diverse product portfolio and a marketing network that traverses the whole of India and more than 50 countries across the world. As a strong and positive leader, Vivek C. Burman had motivated employees of Dabur to “do better than their best”—a credo that gives Dabur its status as India’s most trusted nature-based products company.

Leading brands

More than 300 diverse products in the FMCG, Healthcare and Ayurveda segments are in the product line of Dabur. List of products of the company include very successful brands like Vatika, Anmol, Hajmola, Dabur Amla Chyawanprash, Dabur Honey and Lal Dant Manjan with turnover of Rs.100 crores each.

Strategic positioning of Dabur Honey as food product, lead to market leadership with over 40% market share in branded honey market; Dabur Chyawanprash is the largest selling Ayurvedic medicine with over 65% market share. Dabur is a leader in herbal digestives with 90% market share. Hajmola tablets are in command with 75% market share of digestive tablets category. Dabur Lal Tail tops baby massage oil market with 35% of total share.

CHD (Consumer Health Division), dealing with classical Ayurvedic medicines, has more than 250 products sold through prescription as well as over the counter. Proprietary Ayurvedic medicines developed by Dabur include Nature Care Isabgol, Madhuvaani and Trifgol.

However, some of the subsidiary units of Dabur have proved to be low margin business; like Dabur Finance Limited. The international units are also operating on low profit margin. The company also produces several “me – too” products. At the same time the company is very popular in the rural segment.

Questions

1. What is the objective of Dabur? Is it profit maximisation of growth maximisation? (10)

2. Do you think the growth of Dabur from a small pharmacy to a large multinational company is an indicator of the advantages of joint stock company against the proprietorship form? Elaborate. (10)

Caselet2

The Regina Company„ one of the largest inakets of vacuum cleaners recent') had scv cfc ptollkins with the quality of its products. The market responsc to this 1ak of quality caused financial problems for Ow company. in late 1995. Regina began having return rates as high as 30 to 50 percent on some of its Housekeeper and Housekeeper Plus models. These models were sold primarily through discount stores. Further, Regina's Spectrum vacuum cleaner, an upgraded version sold in specialty stores, was introduced in 1995 with many quality problems. ef The specific problems identified for the Housekeeper and Housekeeper Plus models were associated with faulty belts and weak suction. In the Spectrum model, the agitator was melting; and making a loud noise, the foot pedals were breaking, and the steel-encased motor (which had been advertised as the

IIBM Institute of Business Management

Examination Paper of Managerial Economics

power source for the vacuum cleaner) had been replaced with a less desirable. less reliable motor.

As a result of these problems, Target stores discontinued Regina's Housekeeper Plus model after reporting that "at least half of those sold were returned." At Starmart, which accounts for about a quarter of the Housekeeper sales, I. out of every 5 machines sold was returned. To help service customer complaints, Regina set up an 800 telephone number for customers to contact the firm. directly. The sales returns caused Regina's shareholders to question the 1995 fiscal earnings report. Furthermore, both inventories and accounts receivable doubled during the 1995 fiscal year. At the end of that period, Regina's chairman and 40 percent stockholders

Resigned. The chairman’s resignation was closely followed by a company announcement stating that the financial results reported for the 1995 fiscal year were materially incorrect and had been withdrawn. This announcement brought a suit from shareholders who had bought Reoina stock on the basis of the 1995 camings report. It also prompted an audit of the 1995 results and a request to another accounting organization to work on Regina's business and accounting controls. A few months later, Regina 'agreed to be acquired by a unit of Magnum, a vacuum cleaner and Water-purification Company. Under Magnum, Regina shut down production while engineers worked to solve the problems inherent in the Housekeeper and Housekeeper Plus vacuums, particularly the suction difficulties. In September 1998, Magnum and Regina decided to separate the two companies again. Since then, Regina has been regaining market share with its Housekeeper models. The 'vacuums are popular because they carry on-board tools.

Questions:

1. What type of controls would you have established to preclude the major returns experienced by Regina? (10)

2. How would you have controlled the finished-goods -inventory to avoid its growing to twice the size that it was in the previous year. (10)

Section C: Applied Theory (30 marks)

1. What is the importance of demand analysis in business decision? (15)

2. Explain individual demand function and market demand function. (15)

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 This section consists of Applied Theory Questions.

 Answer all the questions.

 Each question carries 15marks.

 Detailed information should form the part of your answer (Word limit 200 to 250 words).

END OF SECTION C

END OF SECTION B

Examination Paper of Enterprise Resource Planning

IIBM Institute of Business Management

 This section consists of multiple choices and Short Notes type questions.

 Answer all the questions.

 Part one questions carry 1 mark each & Part two questions carry 5 marks each.

IIBM Institute of Business Management

SubjectCode-B102Examination Paper

Enterprise Resource Planning

MM.100

Section A: Objective Type & Short Questions (30 marks)

Part one:

Multiple choice:

1. Which of the following describes an ERP system? (1)

a. ERP systems provide a foundation for collaboration between departments

b. ERP systems enable people in different business areas to communicate

c. ERP systems have been widely adopted in large organizations to store critical knowledge used to make the decisions that drive the organization’s performance.

2. The responsibilities of the office manager in a firm that produces electronics spares is: (1)

a. Everything in the office runs efficiently

b. Furniture and other equipment in the office is adequate

c. Processing all the incoming official mail and responding to some

d. All of the above

d. All of the above

3. Physiological Barriers of listening are:

(1)

a. Hearing impairment

b. Physical conditions

c. Prejudices

d. All of the above

4. What is the main function of Business Communication: (1)

a. Sincerity

b. Positive language

c. Persuasion

d. Ethical standard

IIBM Institute of Business Management

Examination Paper of Enterprise Resource Planning

END OF SECTION A

 This section consists of Caselets.

 Answer all the questions.

 Each Caselet carries 20marks.

 Detailed information should form the part of your answer (Word limit 150 to 200 words).

5. Which presentation tend to make you speak more quickly the unusual: (1)

a. Electronic

b. Oral

c. Both „a‟ and”b”

d. None of the above

6. Labov’s Storytelling Model based on: (1)

a. Communication through speech

b. Language learning

c. Group Discussions

d. None of the above

7. Diagonal Communication is basically the: (1)

a. Communication across boundaries

b. Communication between the CEO and the managers

c. Communication through body language

d. Communication within a department

8. Direct Eye contact of more than 10 seconds can create: (1)

a. Discomfort &Anxiety

b. Emotional relationship between listeners and speakers

c. Excitement

d. None of the above

9. How to make Oral Communication Effective? (1)

a. By Clarity

b. By Brevity

c. By Right words

d. All of the above

10. Encoding means: (1)

a. Transmission

b. Perception

c. Ideation

d. None of the above

Part Two:

1. Define ERP? (5)

2. What are ERP packages? (5)

3. What are the reasons for the explosive growth of the ERP market? (5)

4. What is Business Integration and how do the ERP systems achieve it? (5)

Section B: Caselets (40 marks)

IIBM Institute of Business Management

Examination Paper of Enterprise Resource Planning

Caselet1

With eight plants globally running from a single ERP instance on a server in Zeeland, Michigan, the IT team faced the challenges of scaling their systems to support the global growth fueling their company’s expansion. Running IQMS’ manufacturing ERP system delivered via Hosted Managed Services (HMS) provides Ventura Manufacturing the most economical system architecture for greater scalability and efficiency as well as to attain disaster recovery goals.

Ventura is an award-winning semi-automated assembly and production company that serves the automotive, office furniture, education seating, and molding and assembly of optical silicone industries globally. Headquartered in Zeeland, Michigan, the company has multiple plants in Zeeland in addition to plants in Budaörs, Hungary, Saltillo, Mexico and Shanghai, China.

As demand for Ventura’s services grew and the company began attracting customers worldwide, it was apparent the dependency on a single ERP system on-premise in Zeeland, Michigan was becoming an impediment to faster growth. “Relying on a single system to manage our global plants was proving to be a huge scale challenge,” said Joel Boyles, IT Team Lead at Ventura Manufacturing.

Ventura’s customer base is globally-based and to serve them as responsively and effectively as possible, Ventura made the decision to open new production plants in Hungary and Shanghai, China.

With eight plants globally running from a single ERP instance on a server in Zeeland, Michigan, the IT team faced the challenges of scaling their systems to support the global growth fueling their company’s expansion. The IT Teams at Ventura prides itself on offering live support to any plant, anywhere in the world that needs help, anytime. “When we just had the plants in Mexico and Hungary, our existing staff could scale to support the calls coming from plants for help with their IT systems and take care of ERP-related tasks,” Joel said. When the Shanghai, China facility went online, Ventura was reaching the limits of scale and speed with their IT teams and the system running on-premise in Zeeland.

As demands increased on the system, so did concerns over Availability and Disaster Recovery Objectives the IT Team had defined. Two metrics that are of specific interest to Ventura’s IT team are the Recovery Time Objective (RTO) and Recovery Point Objective (RPO). IT defined the RTO goal as 8 hours and the RPO as 15 minutes, achievable on a 24/7 basis. To accomplish these goals, Ventura would need to create an entirely new system platform that could scale more efficiently with their growing business. The new platform would also need to increase the speed of system updates, which had been a problematic area in the past for the single system to complete.

Joel Boyles, IT Team Lead, says the challenges of scalability and disaster recovery are what drove the urgency for Ventura to decide that Hosted Managed Services (HMS) from IQMS was the best possible solution. “Plant system updates including MRP were taking at least 2 hours

IIBM Institute of Business Management

Examination Paper of Enterprise Resource Planning

per plant, which translated into our IT teams having 24/7 shifts in our Zeeland-based IT offices,” Joel said. “Clearly we had to redefine our system architecture for greater scalability and speed.”

Ventura chose IQMS’ Enterprise IQ delivered via Hosted Managed Services (HMS) because it was the most economical and fastest option for solving the system performance challenges and attaining the disaster recovery goals the company has. Under the IQMS HMS purchase option, software licenses are owned in perpetuity by Ventura and hardware and platform software is provided by the IQMS data center. IQMS is managing the Ventura systems today in a secure data center environment. Ventura’s IT team can gain access to key system metrics and key performance indicators anytime via any browser-enabled laptop, tablet or smart phone.

Questions

1. How Ventura Defined A Global Roadmap To Greater Speed And Reliability? ( 20)

Caselet 2

Enterprise resource planning (ERP) is business management software—usually a suite of integrated applications—that a company can use to store and manage data from every stage of business, including:

•Product planning, cost and development

•Manufacturing

•Marketing and sales

•Inventory management

•Shipping and payment

Functions of ERP

• ERP provides an integrated real-time view of core business processes, using common databases maintained by a database management system. ERP systems track business resources—

 cash, raw materials, production capacity—and the status of business commitments: orders, purchase orders, and payroll.

• The applications that make up the system share data across the various departments (manufacturing, purchasing, sales, accounting, etc.) that entered the data.

• ERP facilitates information flow between all business functions,

ERP Implementation

Success

Company Background

 Cadbury is a British multinational confectionery company owned by Mondelēz International.

 It is the second largest confectionery brand in the world after Wrigley's.

 Founder: John Cadbury

 Founded in: 1824, B Currently, Cadbury India operates in four categories viz. Chocolate Confectionery, Milk Food Drinks, Candy and Gum category. In the Chocolate

IIBM Institute of Business Management

Examination Paper of Enterprise Resource Planning

Confectionery business, Cadbury has maintained its undisputed leadership over the years.

ERP Implementation

Cadbury turns out, in recent years, Kraft implemented SAP ERP 6.0 (System Analysis and Program Development) in what SAP called one of its largest global ERP implementations. Kraft credited ERP with reducing operational costs. 11,000 employees were sending data to the company's SAP solution and it was linked to 1,750 applications by 2008. That same year, Kraft aslo added SAP's master data management solution, Net Weaver, with an eye toward integrating legacy systems.

• Cadbury was left with a glut of chocolate products at the start of the year, after the installation of a new SAP-based enterprise resource planning (ERP) system led to an excess of chocolate bars building up at the end of 2005.

• The new U.K. computer system is part of a five-year IT transformation project, called "Probe", aimed at integrating the Cadbury Schweppes' supply chain, purchasing, manufacturing, distribution, sales and marketing systems on a global, SAP-based

ERP platform

• Cadbury Schweppes is aiming for an ultimate savings from the Probe project, but its implementation has been far from smooth. The project was beset by problems and delays when it was first introduced in Australia in 2002.

Benefits of ERP

• Cadbury was on a fast paced growth and could not continue with the existing systems and the pace was too slow due to added inefficiencies. ERP added efficiency and guided the led all the issues fast paced growth.

• The implementation of ERP brought in a new way of warehouse management system and brought in structure to branch offices and the depots.

• While implementing the ERP systems, the company has built it upon the past strengths of the company thereby not losing out on its competitive

• The initial implementation took time and then the successive implementations took lesser time and cost and there is a huge advantage in saving cost while in the implementation phase itself.

• The reaction from competition does not matter in this because this is not a change that was advertised to the market. This is an internal process restructuring and was a welcome change within the company which badly needed the change.

• The company also has built in a robust regular feedback system to monitor the changes and check if they go according to the initial plan. The entire implementation is cross functional and hence it is important that there is a high increase in the efficiency. The ERP vendor was also selected from among the best in class vendors which helped the process occur in a streamlined fashion and avoided any possible chances of hiccups during the initial

implementation phase.

The system has also been deployed up to the vendors. They have a portal called vendor connect

IIBM Institute of Business Management

Examination Paper of Enterprise Resource Planning

 This section consists of Applied Theory Questions.

 Answer all the questions.

 Each question carries 15marks.

 Detailed information should form the part of your answer (Word limit 200 to 250 words).

END OF SECTION C

END OF SECTION B

where they can see their inventory movement and make plans accordingly. Hence the restructuring happens not only internally but also across to the supplier which will add on to the benefits that are accrued.

It was considered at low cost and high result implementation which by itself highlights the success and the benefits.

Questions

1. Why did the Big Bang approach fail for The Hershey Company ? (20)

Section C: Applied Theory (30 marks)

1. What is the difference between ERP and CRM software? (15)

2. What are some of the risks associated with ERP software? (15)

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