BSG STUDY GUIDE QUESTIONS &
ACCURATE COMPLETE SOLUTIONS
PASSED
What are your current plants? - Correct Answer ✔✔ a 2 million-pair plant in North
America and a newer 4 million-pair plant in Asia.
How were sales in year 10? - Correct Answer ✔✔ Sales volume in Year 10 equaled 5.2
million pairs, so there's no immediate urgency to add more capacity. In Year 10 the
company sold 4.5 million pairs of branded shoes to retailers and individuals, and it bid
successfully for contracts to supply 740,000 pairs of private label shoes to large multi-
outlet retailers of athletic footwear.
Where are the dist. centers? - Correct Answer ✔✔ The distribution center for Europe-
Africa is in Milan, Italy. The distribution center for the Asia-Pacific region is in Bangkok,
Thailand. The Latin American distribution center is in Rio de Janeiro, Brazil, and the
North American distribution center is in Memphis, Tennessee.
Whats important about Tariffs? - Correct Answer ✔✔ currently average $4 per pair in
Europe-Africa, $6 per pair in Latin America, and $8 in Asia-Pacific. However, the Free
Trade Treaty of the Americas allows tariff-free movement of footwear between all the
countries of North America and Latin America.
How can models and sizes be delivered? - Correct Answer ✔✔ Each distribution center
maintains sufficient inventory of each model and size to enable orders to be delivered
within 1 to 4 weeks from the time the order is placed. You and your co-managers will
decide whether to staff for 1-week, 2-week, 3-week, or 4-week delivery to retailers.
What is important with our stock and financial records? - Correct Answer ✔✔ The
company's stock price has risen from $11.00 in Year 6, when the company went public,
to $30 at the end of Year 10. There are 10 million shares of the company's stock
outstanding. The company's financial statements are prepared in accord with
generallyaccepted accounting principles and are reported in U.S. dollars.
What does the overall market growth forecast look like? - Correct Answer ✔✔ The
combined effect of these factors is reliably expected to produce 7-9% annual growth in
global demand for athletic footwear for Years 11-15, slowing to about 5-7% annual
growth during Years 16-20.
What are some current possibilities? - Correct Answer ✔✔ (1) intense competition
among rival footwear companies (in the form of declining prices, higher footwear quality,
and so on) can spur market growth above the projected levels or (2) weak competition
, (in the form of rising prices, subpar footwear quality, and so on) can produce weaker
thanprojected rates of market growth
What decides the S/Q rating? - Correct Answer ✔✔ (1) current-year spending per
footwear model for new features and styling, (2) the percentage of superior materials
used, (3) current-year expenditures for Total Quality Management (TQM) and/or Six
Sigma quality control programs, (4) cumulative expenditures for TQM/Six Sigma quality
control efforts (to reflect learning and experience curve effects), and (5) current-year
expenditures to train workers in the use of best practices.
What damages S/Q? - Correct Answer ✔✔ The IFF's S/Q rating formula calls for a 1-
star reduction in the S/Q rating on all unsold branded pairs carried over in inventory to
the following year
What are the ways of selling shoes? - Correct Answer ✔✔ Whole sale, Online sales,
private label sales
What kind of discounts are avalible? - Correct Answer ✔✔ Retail markups over the
wholesale prices of footwear manufacturers can run anywhere from 40% at discount
chains to as high as 100% at premium retailers. Thus, a pair of shoes wholesaling for
$50 usually retails for between $70 and $100.
What are private labels attractive? - Correct Answer ✔✔ The private-label segment is
projected to grow a healthy 10% annually during Years 11-15 and a brisk 8.5% during
Years 16-20 and Making private-label shoes for chain retailers allows a manufacturer to
use plant capacity more efficiently.
What are the main factors causing competition in the industry? - Correct Answer ✔✔
pricing, styling and product quality, the breadth of product selection, celebrity
endorsements, advertising, the comparative sizes of the footwear retailer networks rival
companies have attracted to stock and merchandise their brand of athletic footwear, the
amount of merchandising and promotional support provided to footwear retailers, mail-in
rebates, the speed with footwear rivals deliver new orders from footwear retailers, sales
efforts at company websites, and efforts to boost the loyalty of prior customers in
making repeat purchases.
What is important about sup. materials? - Correct Answer ✔✔ The use of superior
materials improves shoe quality and performance, but shoes can be manufactured with
any percentage combination of standard and superior materials.
How are material prices decided? - Correct Answer ✔✔ By instructor or the prevailing
base prices are adjusted up or down according to the percentage mix of standard-
superior materials usage and the strength of demand for footwear materials
How do rates automatically change? - Correct Answer ✔✔ The going market prices of
standard and superior materials in any one year deviate from their respective base
ACCURATE COMPLETE SOLUTIONS
PASSED
What are your current plants? - Correct Answer ✔✔ a 2 million-pair plant in North
America and a newer 4 million-pair plant in Asia.
How were sales in year 10? - Correct Answer ✔✔ Sales volume in Year 10 equaled 5.2
million pairs, so there's no immediate urgency to add more capacity. In Year 10 the
company sold 4.5 million pairs of branded shoes to retailers and individuals, and it bid
successfully for contracts to supply 740,000 pairs of private label shoes to large multi-
outlet retailers of athletic footwear.
Where are the dist. centers? - Correct Answer ✔✔ The distribution center for Europe-
Africa is in Milan, Italy. The distribution center for the Asia-Pacific region is in Bangkok,
Thailand. The Latin American distribution center is in Rio de Janeiro, Brazil, and the
North American distribution center is in Memphis, Tennessee.
Whats important about Tariffs? - Correct Answer ✔✔ currently average $4 per pair in
Europe-Africa, $6 per pair in Latin America, and $8 in Asia-Pacific. However, the Free
Trade Treaty of the Americas allows tariff-free movement of footwear between all the
countries of North America and Latin America.
How can models and sizes be delivered? - Correct Answer ✔✔ Each distribution center
maintains sufficient inventory of each model and size to enable orders to be delivered
within 1 to 4 weeks from the time the order is placed. You and your co-managers will
decide whether to staff for 1-week, 2-week, 3-week, or 4-week delivery to retailers.
What is important with our stock and financial records? - Correct Answer ✔✔ The
company's stock price has risen from $11.00 in Year 6, when the company went public,
to $30 at the end of Year 10. There are 10 million shares of the company's stock
outstanding. The company's financial statements are prepared in accord with
generallyaccepted accounting principles and are reported in U.S. dollars.
What does the overall market growth forecast look like? - Correct Answer ✔✔ The
combined effect of these factors is reliably expected to produce 7-9% annual growth in
global demand for athletic footwear for Years 11-15, slowing to about 5-7% annual
growth during Years 16-20.
What are some current possibilities? - Correct Answer ✔✔ (1) intense competition
among rival footwear companies (in the form of declining prices, higher footwear quality,
and so on) can spur market growth above the projected levels or (2) weak competition
, (in the form of rising prices, subpar footwear quality, and so on) can produce weaker
thanprojected rates of market growth
What decides the S/Q rating? - Correct Answer ✔✔ (1) current-year spending per
footwear model for new features and styling, (2) the percentage of superior materials
used, (3) current-year expenditures for Total Quality Management (TQM) and/or Six
Sigma quality control programs, (4) cumulative expenditures for TQM/Six Sigma quality
control efforts (to reflect learning and experience curve effects), and (5) current-year
expenditures to train workers in the use of best practices.
What damages S/Q? - Correct Answer ✔✔ The IFF's S/Q rating formula calls for a 1-
star reduction in the S/Q rating on all unsold branded pairs carried over in inventory to
the following year
What are the ways of selling shoes? - Correct Answer ✔✔ Whole sale, Online sales,
private label sales
What kind of discounts are avalible? - Correct Answer ✔✔ Retail markups over the
wholesale prices of footwear manufacturers can run anywhere from 40% at discount
chains to as high as 100% at premium retailers. Thus, a pair of shoes wholesaling for
$50 usually retails for between $70 and $100.
What are private labels attractive? - Correct Answer ✔✔ The private-label segment is
projected to grow a healthy 10% annually during Years 11-15 and a brisk 8.5% during
Years 16-20 and Making private-label shoes for chain retailers allows a manufacturer to
use plant capacity more efficiently.
What are the main factors causing competition in the industry? - Correct Answer ✔✔
pricing, styling and product quality, the breadth of product selection, celebrity
endorsements, advertising, the comparative sizes of the footwear retailer networks rival
companies have attracted to stock and merchandise their brand of athletic footwear, the
amount of merchandising and promotional support provided to footwear retailers, mail-in
rebates, the speed with footwear rivals deliver new orders from footwear retailers, sales
efforts at company websites, and efforts to boost the loyalty of prior customers in
making repeat purchases.
What is important about sup. materials? - Correct Answer ✔✔ The use of superior
materials improves shoe quality and performance, but shoes can be manufactured with
any percentage combination of standard and superior materials.
How are material prices decided? - Correct Answer ✔✔ By instructor or the prevailing
base prices are adjusted up or down according to the percentage mix of standard-
superior materials usage and the strength of demand for footwear materials
How do rates automatically change? - Correct Answer ✔✔ The going market prices of
standard and superior materials in any one year deviate from their respective base
