CMA Exam Practice Question #1

” If you are not willing to risk the usual you will have to settle for the ordinary.” Jim Rohn

Question:

A motorcycle company has the maintenance policy of replacing the tires of its 250 motorcycle fleet as the tires wear out. Top management wonders if they could save costs by changing the tires periodically at one time on its fleet of 250 motorcycles. The technique top management would find most useful is:

a) Probability Analysis
b) Learning Curve Techniques
c) Flexible Budgeting
d) Linear Programming

Answer:

Probability gives a means of measuring numerically how likely an event will occur. It provides a way for us to quantify uncertainty. The probability technique can provide an estimate of the condition of the tires at a point in time, and the expected value of replacing the tires at once versus as they wear out.

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2 Comments on “CMA Exam Practice Question #1”

  1. Thanks Dear Nathan. I am a new reader to this blog and plan to take exam part-1 on februray-2012 from bangladesh. Please discuss topics on Performance Measures & Business Process Performance of part-1. regards Masudmondal

    1. Hello Masud, I want to congratulate you on your decision to become a CMA. You will see that the investment of time and money will give you an advantage in pay and promotions over your non-certified peers.

      I will write articles on performance measures and business process performance very soon. To make sure you receive these articles, don’t forget to sign up to our community using the form up above. Best of luck in your exam preparations, and let me know if you need guidance from me aside from the articles that I will write as mentioned above.

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