TS SET Paper 2 Mock Test - 4 (Management) - TS TET MCQ

The author of Equity Theory of Motivation is Stancy Adams. Equity theory focuses on determining whether the distribution of resources is fair to both relational partners. Equity is measured by comparing the ratio of contributions and benefits for each person.

Human resource planning ensures the best fit between employees and jobs while avoiding manpower shortages or surpluses. There are four key steps of the HRP process. They include analysing present labour supply, forecasting labour demand, balancing projected labour demand with supply, and supporting organisational goals.

Financial managers are responsible for the financial health of an organisation. They produce financial reports, direct investment activities, and develop strategies and plans for the long-term financial goals of their organisation. Financial managers analyse variance between standard costs and actual costs. The process of analysing differences between standard costs and actual costs is called variance analysis.

Capitalism is an economic system based on principle of free enterprises.
Production are privately owned and operated for profit usually in competitive markets.
Under this system country’s trade and industry are controlled by private owners for profit rather than by state.
This system is based on private ownership.
In this economy decision-making and investment are determined by the owners and distributions of goods are mostly determined by competition in the market.

Wholesale merchants, agents, and brokers are essential elements of the wholesale business.
They help move goods between producers and retailers and the advent of modern technologies helps them do this more efficiently.
A wholesale merchant operates in the chain between the producer and the retail merchant.
Some wholesale merchants only organize the movement of goods rather than move the goods themselves.
Limited service merchant wholesalers take title to the merchandise and assume the risk involved in an independent operation. They buy and resell products and offer a limited range of service.
Wholesale agents and brokers do not take title to the merchandise being marketed; they only bring buyers and sellers together and negotiate the terms of the transaction.
Agent merchants represent their buyer or seller, usually on a permanent basis; brokers bring parties together on a temporary basis.

• It is a function of management. It is not related Maslow theory. Maslow proposes that needs have certain priority.
• Maslow’s theory of human motivation in psychological review. Maslow consequently extended the idea to include his observations of humans’ innate curiosity.
• Maslow’s need hierarchy.

The traditional marketing communications mix consists of a set of five primary tools.
Marketing communication is the “promotion” part of the “marketing mix” or the four P’s.
Strategy is an idea, a conceptualization of how a goal can be achieved.
These are advertising, sales promotion, direct marketing, public relations, and personal selling.

BCG (Boston Consulting Group matrix)

• The BCG (Boston Consulting Group matrix) is also known as the product portfolio matrix.
• It is a planning tool of the business which is used to estimate the strategic position of the brand portfolio of a firm.
• BCG matrix is a popular portfolio analysis method that classifies the product or service of a firm in a 2 × 2 matrix.
• Each quadrant is categorized as a high or low performance, according to the relative market growth rate and market share.

The correct answer is, Equal to LAC

• In the long Run, any firm can change its plant, scale of operations.
• In Perfect Competition, a firm is said to be in equilibrium position when it wants to remain its equilibrium output constant/ unchanged.
• In long run, under perfect competition firm is earning normal profits only.
  • The first reason Behind Normal Profit is that in case a firm is earning supernormal profit, then a new competing firm will enter into the market due to which supernormal profit will have no existence.
  • Secondly, when the firm is exiting the market then automatically supply gets reduced and price increases due to which we can say that it is not possible for a firm to earn supernormal profits or loss in the long run.
• In long run, firms are said to be in equilibrium when they have settled their production plant so as to produce at the minimum point of their LAC.
• Basic Assumptions of Long Run Equilibrium are:
  • Cost curves are uniform in nature
  • There is free entry and exiting of firm
  • There is perfect knowledge among all firms with regard to its price and output.
• Main condition for long run equilibrium:
  • LMC = LAC = P

Here LMC is Long run Marginal Cost
LAC is Long run Average Cost
P indicates Price

Hence, the correct answer is Equal to LAC.

Net Income Approach for capital structure was presented by David Durand. The theory suggests increasing value of the firm by decreasing the overall cost of capital which is measured in terms of Weighted Average Cost of Capital. This can be done by having a higher proportion of debt, which is a cheaper source of finance compared to equity finance.

Net operating income approach for capital structure was given by Ezta Soloman. This approach for capital structure believes that the value of a firm is not affected by the change of debt component in the capital structure. It assumes that the benefit that a firm derives by infusion of debt is negated by the simultaneous increase in the required rate of return by the equity shareholders.

The irrelevance proposition theorem is a theory of corporate capital structure that posits financial leverage does not affect the value of a company, if income tax and distress costs are not present in the business environment. The irrelevance proposition theorem was developed by Merton Miller and Franco Modigliani.

FRICTO is an acronym for flexibility (F), risk (R), income (I), control (C), timing (T), and other (O). These represent important factors that affect the debt-equity mix decision in a company. FRICTO analysis for capital structure was developed by Robert Bruner.

V. A. Graicuna's, a French management consultant, analysed subordinate-supervisor relations and classified these relationships into three types:
(a) Direct Single Relationships between the senior and each of his subordinates individually
(b) Direct Group Relationships between the manager and each of the possible combinations of subordinates
(c) Cross Relationships between each of the groups of subordinates
According to Graicuna's formula n (n - l), if a superior has three subordinates, the number of cross-relationships would be six.

Product-oriented layouts are organised around products or families of similar high-volume, low-variety products. A product layout is where the equipment, tools, and machines are located according to how a product is made. An automated car wash is a product-oriented approach that seeks the best personnel and machine utilisations in repetitive or continuous production.

Manager Inventory Chart is a partial organization chart that shows managerial positions, current incumbents, potential replacements for each position, and the age of each person. However, it does not show the position to which a manager may be promoted. Hence, from above discussion, we can infer that option (c) is not an advantage of Manager Inventory Chart. Options (a), (b), (d) are all advantages of Manager Inventory Chart.

When a firm produces a level of output where marginal cost is equal to marginal revenue (MC=MR), it is maximizing its profits or minimizing its losses in the short run. 
This is because at the point where MC=MR, the firm is producing the output level where the additional revenue from producing one more unit (MR) is equal to the additional cost of producing that unit (MC).

However, whether the firm is minimizing short-run average total cost (SRATC) depends on whether SRATC is at its minimum point or not.

 If the SRATC curve is at its minimum point at the output level where MC=MR, then the firm is indeed minimizing SRATC

But if the SRATC curve is not at its minimum point at the output level where MC=MR, then the firm is not minimizing SRATC.

In this case, the firm could potentially reduce its costs by producing a different output level that would minimize SRATC

For an imperfectly competitive firm producing a level of output where marginal cost is equal to marginal revenue, marginal revenue is below average variable cost, and the price is equal to the average total cost, then the firm is minimizing short-run average total cost.

Hence the correct answer is minimizing short-run average total cost.

When a planning exercise is implemented in production cycle, it is controlling and guiding the work schedules helps in reaching the desired goals. Hence, option (c) is the correct answer.

Michael Porter, a renowned economist and professor at Harvard Business School, introduced the concept of the value chain in his book "Competitive Advantage: Creating and Sustaining Superior Performance." The value chain is a framework used to analyze a company's activities and processes in order to identify the sources of competitive advantage and customer value.

Porter proposed that a company's value chain consists of a series of interrelated activities that add value to the product or service offered to customers. These activities can be categorized into primary activities and support activities. Primary activities are directly involved in the creation, delivery, and marketing of the product, while support activities provide the infrastructure and resources necessary for the primary activities to take place effectively.

By examining the value chain, companies can identify specific activities where they can gain a competitive advantage and deliver greater value to their customers. This analysis helps companies understand the cost drivers and sources of differentiation within their industry, allowing them to make strategic decisions to optimize their operations and improve their overall performance.

Overall, Michael Porter's concept of the value chain has become a widely used tool in strategic management and marketing, helping businesses better understand their operations and enhance their competitive positioning.

According to Dale Yoder, ''Selection is the process in which candidates for employment are divided into two classes - those who are to be offered employment and those who are not''. Selection means a process by which qualified personnel may be chosen from applicants offering their services to the organisation for employment.

Options involve the least risk for the holder. Options give buyers the right, but not the obligation, to buy or sell an underlying asset at an agreed-upon price and date. Call options and put options form the basis for a wide range of option strategies designed for hedging, income, or speculation.

Perception is the process of interpreting and making sense of sensory information. In an organizational context, perception plays a role in a wide range of activities, including performance evaluation, performance expectations, and job evaluation.

Important Points

Managerial Implications of Perceptions

People in organisations are always judging each other. Managers must appraise their subordinate’s performance. Let us look at the more obvious applications of perceptions in organisations.

• Employment Interview: A major input into who is hired and who is rejected in any organisation is the employment interview. Evidence indicates that interviewers often make inaccurate perceptual judgements. Interviewers generally draw early impressions that become very quickly entrenched.
• Performance Evaluation: An employee’s performance appraisal very much depends on the perceptual process. The performance appraisal represents an assessment of an employee’s work. While this can be objective, many jobs are evaluated in subjective terms. Subjective measures are, by definition, judgemental.
• Performance Expectations: A manager’s expectations of an individual affect both the manager’s behaviour towards the individual and the individual’s response.
• Productivity: What individuals perceive from their work situation will influence their productivity.
• Job Satisfaction: Job satisfaction is a highly subjective, and feeling of the benefits that derive from the job. Clearly his variable is critically linked to perception.
• Job evaluation: It is a systematic process for assessing the relative worth of different jobs within an organization. It involves the use of various methods and criteria to evaluate the tasks, duties, and responsibilities associated with each job, and to determine the relative value of each job in comparison to others.

Decision Support System: 

• A decision support system is a piece of software or a programme that helps experts in many fields in formulating and supporting decisions. 
• It is a part of a business intelligence system and frequently has a database with data particular to the industry.
• Files, business models, health data, sales data, estimates, marketing stats, and personal expertise can also be included in decision support systems.
• Decision support systems are extensively used in sectors like healthcare, agriculture, and marketing.

Important Points

Advantages of Decision Support System

• Improves performance and effectiveness of the user
• Allows for faster decision-making
• Reduces the time taken to solve problems
• combine to save money!
• Has been seen to improve collaboration and communication within groups
• Reduces training times because the experience of experts is available within the programs algorithm
• Provides more evidence in support of a decision
• May increase decision-maker satisfaction
• Providing different perspectives to a situation
• Helps automate various business system

Attribute:

• The term "attribute" refers to a person's trait or personality.
• An individual can be a place, an item, or a person.
• The information for which no accepted measurement device can be used is referred to as qualitative data.
• Such information is typically used to assess a person's quality.
• Quantitative and numerical values cannot be used to quantify qualitative facts.

Important Points

•  Different attributes in themselves are called different classes and 'the number of observations assigned to them are called class frequencies which are denoted by bracketing the class symbols. Thus (A) stands for the frequency of A.
• The total number of ultimate / highest order class frequencies are 2ⁿ.
• The total number of class frequencies of all orders, for n attributes are 3ⁿ.

Hence, with n attributes the total number of ultimate frequencies are 2n

A dumb terminal is a very simple monitor with very little processing power and features. It does not have the ability to process escape sequences such as clearing a line, clearing the screen or controlling the cursor position. Information is presented as an array of pre-selected formed characters. When such devices use a video display such as a cathode-ray tube, they are called a "video display unit" or "visual display unit" (VDU) or "video display terminal" (VDT).

It is dubbed as a glass teletype as it has the same limited functionality of one. It is usually paired with a keyboard and sometimes a mouse to allow the user to input commands and data.

Grapevine is an informal communication, unorganised and unofficial channel of communication in an organisation. When the formal channels fail or do not work properly and some over-smart people spread rumours, false and irresponsible statement or half-truths in all the directions, it is called the communication on the grapevine channel.

Emerging market economies are a part of developing countries. An emerging market economy describes a nation's economy that is progressing towards becoming more advanced, usually by means of rapid growth and industrialisation. These countries experience an expanding role both in the world economy and on the political frontier.

When there is risk of loss of principal, or risk of repayment loan it is known as credit risk. Therefore, 1st statement is true.
Liquidity risk is a risk when given security or asset cannot be traded in market and therefore, inflow and outflow of firm mismatches. Statement-ii also says the same therefore it is also a correct statement.
Basic risk is the risk in a firm owing to the differences in the index to which financial assets and liabilities are tied up. it is also a correct statement.
Forward rate contract is a contract made between parties that determine the fixed rate of interest or the currency exchange rate to be paid or received in a future date. Whatever the rates in future, irrespective of that receiver will get amount based on that rates and other party is bound to pay rate that is fixed when contract is made. Here, party protects itself from loss if there is decrease in interest rates. 3rd statement also explains the same. Therefore, it is a correct statement.
All the above statements are correct and none of the statement is wrong.

The basket Training Methods

• Method of training that is helpful for enhancing decision-making skills
• as a training device that can be used to help provide an opportunity to practice skills in a situation in which the participant can obtain feedback on his or her performance.
• The underlying idea of this technique is that a person is required to assume the role of fictitious execution in a hypothetical situation.
• it is a way of acquiring workers with their jobs by holding a variety of issues in a basket
• The workers must access the issues which could include feedback from other workers and interact with them all at the same time

Important Points

•  it is used as a common tool for selection and development purposes
• It helps in understanding individual adapting capacity
• its aims to determine the worker's prioritization point in a different situation
• enhancing planning and organization skill
• helps in the development of decision-making skills of the workers

Hence the correct option is the Development of decision skills.

Statement I: PERT (Program Evaluation and Review Technique) is indeed an event-oriented technique. PERT focuses on the sequencing of events or activities and the relationships among them. It emphasizes the critical path method and uses probabilistic time estimates to determine project timelines.

Statement II: CPM (Critical Path Method) is a task-oriented technique. CPM focuses on identifying the critical path, which is the sequence of tasks that determines the shortest possible project duration. It emphasizes the time required for each task and the interdependencies between them.

Both PERT and CPM are widely used project management techniques, and they have their own unique approaches and methodologies.

Customer Relationship Management is the process of making and keeping customers while maximizing their profitability, behaviors, and satisfaction. It involves managing and nurturing relationships with customers throughout their entire lifecycle, from acquisition to retention and loyalty.

CRM focuses on understanding customers' needs, preferences, and behaviors to develop targeted strategies and initiatives. It encompasses various activities such as gathering customer data, analyzing customer insights, implementing personalized marketing campaigns, providing exceptional customer service, and maintaining ongoing communication with customers.

By effectively implementing CRM practices, organizations can enhance customer satisfaction, increase customer loyalty and retention, and ultimately maximize customer profitability. CRM systems and strategies enable businesses to build strong relationships with customers, tailor their offerings to meet customer needs, and provide a superior customer experience.

Supply Chain Management (Option a) refers to the coordination and management of all activities involved in the production, procurement, and distribution of goods and services. While supply chain management is important for overall business operations and efficiency, it is not directly focused on customer relationship management.

Total Quality Management (Option b) is an approach that focuses on continuously improving the quality of products, services, and processes within an organization. While customer satisfaction is a key aspect of Total Quality Management, it does not encompass the full scope of customer relationship management.

Partner Relationship Management (Option d) involves managing and nurturing relationships with business partners, suppliers, distributors, and other external partners. While partner relationships are important, they are not the sole focus of maximizing customer profitability and satisfaction as in customer relationship management.

Therefore, option c, Customer Relationship Management, is the most appropriate choice when it comes to the process of making and keeping customers while maximizing their profitability, behaviors, and satisfaction.

Entrepreneurship Development Institute of India (EDII), Ahmedabad .

• It is the Technical support partner for Start-up Village Entrepreneurship Programme (SVEP).
• It is an autonomous and non-for-profit institute.
• It is sponsored by apex financial institutions like the IDBI Bank Ltd., IFCI Ltd., ICICI Bank Ltd. and the State Bank of India (SBI).

A parametric test is a branch of statistics that makes assumptions about the parameter of population distribution from which the sample is drawn.

When the mean accurately represents the center of distribution of the data then parametric tests are used and when the median represents the center of distribution of data then non-parametric tests are used. 

Reasons to use Parametric test:

• A parametric test can perform well with a normal distribution of data.
• A parametric test can perform well when the spread (dispersion) of each group is not the same.
• A parametric test uses more statistical power than nonparametric tests. 

Key Points

"F" test:

• F-test is any statistical test in which the test statistic has an F-distribution under the null hypothesis.
• The parameters used in the f-test are mean and variances due to which parametric tests are used here as well.
• F-test of overall significance indicates whether your linear regression model provides a better fit to the data than a model that contains no independent variables.
• F-test uses two sample variances, s1 and s2, by dividing them.
• There result is always a positive number because variances are always positive.

"t" test:

• It is used to compare the means of two groups.
• It is used in hypothesis testing to find out whether a process actually has an effect on the population, or whether the groups are different from one another.
• A test is necessary for small sample sizes (n<30) where distributions are not normal.

"z" test:

• This statistical technique is used to determine whether two populations are different from each other when variances are known and to calculate their mean.
• This test can be used to test the hypothesis that follows a normal distribution.
• When the sample size of the population is greater than equal to 30 i.e. n>=30 then a z-test will be used.

Therefore, "F" test, "t" test and "z" test are parametric tests.