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1			What term is used to describe the process which basic goods pass through as they are transformed into goods for final consumption?
			A)	circular flow of income
			B)	final delivery
			C)	logistics
			D)	value chain
2			Close relationships between members of a value chain have developed for a number of ones. One important business model for handling goods as they pass through a value chain, and which requires close relationships between purchaser and supplier is often referred to as:
			A)	Just in case
			B)	Just in place
			C)	Just in time
			D)	Just value
3			A manufacturing company decides to have its staff canteen operated by an outside catering contractor, rather than undertaking the task itself. The process of transferring this work to an independent company is most commonly referred to as:
			A)	Virtualisation
			B)	Industrialisation
			C)	Resourcing
			D)	Outsourcing
4			Which of the following statements explains why outsourcing has become a popular idea in recent years?
			A)	it allows a company to concentrate on what it is good at
			B)	it is always cheaper for a company to outsource than to do the work itself
			C)	outsourcing is administratively always very simple
			D)	the legislation requires private and public sector companies to outsource their activities in order to obtain the best value
5			A brewery outsourcing its accounting and distribution services should achieve a number of benefits. Which of the following is NOT typically an advantage of outsourcing such activities?
			A)	It allows the business to focus its activities on its core brewing activity
			B)	It gives the manufacturing company access to cutting edge skills in the field of accountancy and distribution that would otherwise be difficult to acquire.
			C)	Outsourcing is guaranteed to reduce costs and improve quality of the brewery’s core output
			D)	The manufacturer’s scarce human resources can be freed up and redeployed in higher value adding activities
6			An airline outsourcing its catering activities faces a number of potential problems as a result of outsourcing. Which of the following is MOST likely to be a problem associated with outsourcing?
			A)	It will be impossible to specify the nature of meals required if the catering operation is outsourced
			B)	Legislation in the UK generally outlaws outsourcing, unless it is carried out overseas
			C)	The airline may have little control over continuity caused by problems at the outsourced caterer, e.g. a strike or bankruptcy
			D)	Outsourcing would require a large investment by the airline
7			Which of the following is most likely to assist in the development of long-term relationships between a company and its commercial customers?
			A)	low prices
			B)	loyalty bonuses
			C)	activities aimed at developing joint problem solving
			D)	appointment of a customer services manager
8			In its broadest sense, customer loyalty can be described as being essentially about:
			A)	Customers making repeat purchases
			B)	Customers having positive thoughts about a company
			C)	Having a loyalty card
			D)	A combination of behaviour and attitude towards a company
9			Which of the following is NOT true of franchisees for a typical fast food restaurant chain?
			A)	they generally agree to charge prices in accordance with the franchisor's guidelines
			B)	they are always small owner managed businesses
			C)	they generally enter an agreement with a franchisor for a fixed period
			D)	they create legal relationships between themselves and their customers
10			The 'leaky bucket' model of customer relationships has been used to demonstrate that:
			A)	Companies need to continually recruit new customers in order to maximise sales
			B)	Companies need to continually recruit new customers in order to maximise profits
			C)	It is generally cheaper to retain existing customers rather than recruit new ones
			D)	It is generally cheaper to recruit new customers rather than retaining existing ones