Provided by James R. Martin, Ph.D., CMA
Professor Emeritus, University of South Florida
PLC Main Page |
PLC Multiple
Choice Questions | Graduate MA Course
1. What is the relationship between the product life cycle and the value chain and value added concepts? (See the Donelan & Kaplan, and Clinton & Graves summaries).
2. What are the stages of the product life cycle (PLC) in terms of the marketing or revenue producing perspective? (See the PLC summary).
3. Is the length and sequence of each of these stages predictable in terms similar to biological organisms? (See the PLC summary).
4. What are the stages of the PLC from the production perspective? (See the PLC summary).
5. What PLC stages are included in the customer or consumption perspective? (See the PLC summary).
6. What is the difference between product life cycles and industry life cycles? (See the PLC summary).
7. What is the main objective of PLC analysis from: 1) the producer’s perspective? 2) the customer’s perspective and 3) from society's (government’s) perspective? (See the PLC, Boer, Curtin & Holt, Lawrence & Cerf and Hammer & Stinson summaries).
8. What are the producer’s strategic objectives at the various (overlapping marketing and producer) stages of the PLC, i.e., 1) conception, design and development, 2) startup and production, 3) growth and production, 4) maturity and production 5) decline revitalize and abandon? (See the PLC summary and Clinton & Graves summary). (The target costing summaries are relevant to this question).
9. Susman (1989) shows expense indicators for the various stages in his Exhibit 1 except for the conception, design and development stage where he includes only R&D. What is another appropriate expense or cost related indicator for these combined stages? (See the PLC and target costing summaries).
10. Susman (1989) also indicates that profits are zero in the conception, design, and development stages. What is an appropriate measure of income or profit to consider in these stages? (See the PLC and target costing summaries).
11. What is the meaning of the term technological risk and what type of investment strategy creates the greatest amount of this type of risk? (See the PLC, Investment Management summaries. The Hayes & Wheelwright summary is also relevant).
12. What is the meaning of the term market share risk and what type of investment strategy creates the greatest amount of this type of risk? (See the Investment Management summary. The Hayes & Wheelwright summary is also relevant).
13. Which stages of the PLC does traditional cost accounting consider? Which costs are considered? (See the PLC summary).
14. Which stages of the PLC does life cycle costing consider? Which costs are considered? (See the PLC, Hertenstein & Platt, Clinton & Graves and Howell & Soucy summaries).
15. What is an experience curve or learning curve? (See the Learning Curve summary).
16. What is forward pricing? Hint: The answer is related to the learning curve (Susman 89). (See the PLC and Learning Curve summaries).
17. Why would forward pricing be used in the startup stage of the PLC? (See the PLC summary).
18. How does the PLC concept focus on the long run as opposed to the short run? (See CAM-I Figure 2-3 & Figure 2-4 and the PLC, Hertenstein & Platt and Clinton & Graves summaries).
19. What are some of the things that are emphasized at the design and development stages of the PLC? (See the PLC and Cokins 2002 summaries).
20. Why are companies reluctant to use the PLC concept? (See the PLC summary).
21. What are the two main life cycle strategies? (See the PLC summary). (See Clinton & Graves for a 3rd strategy, and Hayes & Wheelwright for 4 growth models).
22. What are economies of scale? What is the difference between the static concept and the dynamic concept? (See note on Economies of Scale).
23. What are economies of scope?
24. How do the concepts of economies of scale and scope relate to the two types of strategy referred to in question 21? (See the PLC summary and Hayes & Wheelwright summaries).
25. What percentage of the product’s life cycle costs are determined before production starts? (See the CAM-I summary).
26. What is the tradeoff between design and development costs and production and logistical support costs? (See the CAM-I Figures 2-4 and 7-2 and the Cokins 2002 summary).
27. How are the various types of costs (engineering, manufacturing and logistical support) distributed across the PLC? (See CAM-I Figure 5-2).
28. What is the portfolio theory or concept? (See the PLC summary and Adamany & Gonsalves summary).
29. How is the portfolio concept related to the PLC concept? (See the PLC summary and Adamany & Gonsalves summary).
30. What are the final customer’s product life cycle costs? (See the Artto and PLC summaries).
31. When and how should the customer’s PLC costs be considered by the customer? (See the PLC summary for the example provided by White and Ostwald).
32. Shields and Young (1991) make a distinction between life cycle costs and whole life costs. What is the difference between these concepts? (See Shields & Young summary). (See the Estes summary for a discussion of social or stakeholder accounting).
33. When should the final customer’s PLC costs be considered by the producer? (See the Estes summary for some ideas).
34. Discuss the problems created by the traditional cost focus? (See the PLC summary and Hertenstein & Platt summary).
35. Discuss the relationship and compatibility of the PLC concept with the other concepts such as Deming’s theory of management, ABC, ABM, JIT, and TOC.
36. Discuss the underlying assumption in standard costing related to cost drivers and the reason cost allocations based on this assumption tend to create distortions in customer and channel profitability. (See the Manning summary).
37. Discuss the underlying assumption in activity based costing related to cost drivers, as described by Manning, and the reason cost assignments based on this assumption tend to create distortions in customer and channel profitability. (See the Manning summary).
38. Discuss the underlying assumption in Manning's SCM approach related to cost drivers and the reason cost assignments based on this assumption tend to create more accurate estimates of customer and channel profitability. (See the Manning summary).
39. Is the invalid assumption referred to in question 37 part of the ABC concept? Discuss this issue.
40. How is target costing related to product life cycle management? (See Target Costing). (See the Yu-Lee summary for a critics view of target costing).