Features Of Lean Product Development And Reasons For Failure To Adopt Activity Based Costing System


1. Which of the following are important features of ‘lean product development’ as practised in the ‘Toyota Production System’?

I. Reduce reliance on people and cut costs through automation

II. Standardize design, processes and people skills

III. Make problems visible by reducing inventories and stopping production when defects are identified.

IV. A primary focus on shareholder value

A. I and IV only
B. II and III only
C. I, II and III only
D. II, III and IV only

2. Which of the following options are considered to be the main reasons for the failure of many companies to adopt activity-based costing systems?

I. Behavioral and organizational resistance to new systems that may have identified embarrassing information about a particular cost object.

II. The expense of creating the system and the complexity of maintaining it and keeping it accurate were higher than the benefits of a more accurate costing system.

III. Costing was still not accurate as constant estimates were still required to determine both cost drivers and consumption of resources for cost assignment.

IV. Increased automation of production and computerized administration limited the need for detailed investigation of cost structures.

A. I and II only
B. II and IV only
C. I, II and III only
D. I, III and IV only


These multiple choice questions belong to Operations Management and the 1st question discusses about the important features of lean product development and 2nd question is about the main reasons for failure of many companies to adopt activity-based costing systems.

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