Comp-XM In-Depth Practice: 50 Multiple-Choice Questions with
Detailed Explanations
Section 1: Marketing & R&D
Q1: If your team decides to introduce a new sensor product, when should capacity and
automation be purchased?
A1: One round prior to product release .
Q2: What is a market segment?
A2: A group of customers with similar purchasing concerns .
Q3: The promotion budget affects which of the following?
A3: Awareness .
Q4: If you are marketing to High End customers, which criteria are most important to
them in order of importance?
A4: Positioning, Age, MTBF, Price .
Q5: What are the correct Perf/Size coordinates for the Low End (Thrift) segment?
A5: +-0.5 / -0.5 .
Q6: How much do segment prices fall each year?
A6: $0.50 .
Q7: Which three segments are new products most likely to compete in the following
year?
A7: High End, Performance, Size .
Q8: The better the bond rating of your firm (e.g., B is better than BB), the lower the
interest rate you pay on debt.
A8: False. (B is a lower rating than BB, so higher risk = higher interest rate) .
Q9: What is the minimum amount of time it takes to invent a new sensor?
A9: At least 1 year .
, Q10: Age and ___________ are the only two positioning criteria that remain constant from
year to year.
A10: Reliability .
Section 2: Production, TQM, & HR
Q11: An investment intended to lower labor costs in Capstone Production is called:
A11: Automation .
Q12: If a company has too much capacity, which expense category on the income
statement does this directly affect?
A12: Depreciation .
Q13: True or False: TQM investments have an immediate effect and do not need to be
maintained past the initial year to keep the same improvement.
A13: True .
Q14: How can production lines double their capacity?
A14: Add a second shift .
Q15: What is the ideal payback period threshold for TQM investments?
A15: 2 years .
Q16: What does the "Buy/Sell Capacity Strategy" recommend regarding 2nd Shift
Production %?
A16: Keep it between 20% and 50%. Sell capacity if less than 20%, buy if more than
50% .
Q17: Increasing Training Hours in the HR Module tends to:
A17: Increase productivity .
Q18: The exact outcome of TQM efforts appear on the TQM Report. These results are
for:
A18: Cumulative for the previous and all remaining rounds (assuming no additional
investment is made) .
Q19: Which one of the following is NOT one of the four product characteristics that
R&D can set?
A19: Quality (Characteristics: Performance, Size, Age, MTBF) .
Detailed Explanations
Section 1: Marketing & R&D
Q1: If your team decides to introduce a new sensor product, when should capacity and
automation be purchased?
A1: One round prior to product release .
Q2: What is a market segment?
A2: A group of customers with similar purchasing concerns .
Q3: The promotion budget affects which of the following?
A3: Awareness .
Q4: If you are marketing to High End customers, which criteria are most important to
them in order of importance?
A4: Positioning, Age, MTBF, Price .
Q5: What are the correct Perf/Size coordinates for the Low End (Thrift) segment?
A5: +-0.5 / -0.5 .
Q6: How much do segment prices fall each year?
A6: $0.50 .
Q7: Which three segments are new products most likely to compete in the following
year?
A7: High End, Performance, Size .
Q8: The better the bond rating of your firm (e.g., B is better than BB), the lower the
interest rate you pay on debt.
A8: False. (B is a lower rating than BB, so higher risk = higher interest rate) .
Q9: What is the minimum amount of time it takes to invent a new sensor?
A9: At least 1 year .
, Q10: Age and ___________ are the only two positioning criteria that remain constant from
year to year.
A10: Reliability .
Section 2: Production, TQM, & HR
Q11: An investment intended to lower labor costs in Capstone Production is called:
A11: Automation .
Q12: If a company has too much capacity, which expense category on the income
statement does this directly affect?
A12: Depreciation .
Q13: True or False: TQM investments have an immediate effect and do not need to be
maintained past the initial year to keep the same improvement.
A13: True .
Q14: How can production lines double their capacity?
A14: Add a second shift .
Q15: What is the ideal payback period threshold for TQM investments?
A15: 2 years .
Q16: What does the "Buy/Sell Capacity Strategy" recommend regarding 2nd Shift
Production %?
A16: Keep it between 20% and 50%. Sell capacity if less than 20%, buy if more than
50% .
Q17: Increasing Training Hours in the HR Module tends to:
A17: Increase productivity .
Q18: The exact outcome of TQM efforts appear on the TQM Report. These results are
for:
A18: Cumulative for the previous and all remaining rounds (assuming no additional
investment is made) .
Q19: Which one of the following is NOT one of the four product characteristics that
R&D can set?
A19: Quality (Characteristics: Performance, Size, Age, MTBF) .
