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CIMAPRA19-E01-1 Exam - Topic 2 Question 88 Discussion

Bright Idea Co. specialises in manufacturing light bulb filaments. It is considering outsourcing some of it activities in order to reduce costs and improve customer service.Which of the following is an example of asset specificity that is likely to be an important consideration in their decision?
A) An R&D manager who has been in the business for 18 years and has specialist knowledge of the formulations.
B) A building that has been designed specifically for manufacturing light bulb filaments.
C) High tech and expensive filling machines in the factory.
D) A sales director who is well known and popular throughout the industry.

CIMAPRA19-E01-1 Exam - Topic 2 Question 88 Discussion

Actual exam question for CIMA's CIMAPRA19-E01-1 exam
Question #: 88
Topic #: 2
[All CIMAPRA19-E01-1 Questions]

Bright Idea Co. specialises in manufacturing light bulb filaments. It is considering outsourcing some of it activities in order to reduce costs and improve customer service.

Which of the following is an example of asset specificity that is likely to be an important consideration in their decision?

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Suggested Answer: A

by Lera at May 23, 2024, 12:36 PM

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Lou
9 months ago
Totally with you on B, it’s all about that tailored infrastructure!
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Kassandra
10 months ago
Wait, how can a building be more specific than a skilled manager?
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Brett
10 months ago
C is important too, but it’s not as specific as B.
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Lourdes
10 months ago
I think A is more critical, that R&D manager has unique insights.
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Brianne
10 months ago
Definitely B, that building is purpose-built!
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Kati
10 months ago
I'm not entirely confident, but I think asset specificity is about how tailored something is to a particular use, so maybe A or B?
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Brock
11 months ago
I feel like we had a practice question similar to this, and it was about specialized equipment. I think C could also be relevant, but I'm leaning towards B.
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Phyliss
11 months ago
I think option B makes the most sense since a building designed specifically for manufacturing would be a clear example of asset specificity.
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Felice
11 months ago
I remember we talked about asset specificity in class, but I'm not sure if it's more about people or physical assets.
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Lenna
11 months ago
I'm a bit confused on this one. Is the sales director considered an asset-specific investment? They seem more like a general business resource rather than something tied to this particular manufacturing process. I'll have to re-read the question and options carefully.
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Elke
11 months ago
Hmm, I'm not totally sure about this one. The R&D manager with specialist knowledge could also be considered an asset-specific investment, since their expertise would be hard to replace. I'll have to think this through a bit more.
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Suzan
11 months ago
This seems like a pretty straightforward question about asset specificity. I think the building designed specifically for manufacturing light bulb filaments is the best example, since it would be very difficult to repurpose for another use.
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Carmen
11 months ago
Okay, let's see. Asset specificity refers to investments that have little value outside of a particular transaction or relationship. So I'm guessing the high-tech filling machines would be a good example, since they're specialized equipment that wouldn't be easy to use for anything else.
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Wade
11 months ago
Creating a vDC and vApp with the VM-Series firewall sounds like a key step. I'll make sure to select that one.
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Salena
11 months ago
Hmm, this looks a bit tricky. I'll need to make sure I get the deployment and service configurations right. I better review the Kubernetes documentation to make sure I don't miss anything.
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Shelba
11 months ago
Hmm, I'm not entirely sure about this one. I'll need to review my notes on cloud service provider audits to determine the best schedule.
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Dell
11 months ago
I'm almost positive it's "zone of tolerance" because it matches how customers have a range of acceptable service levels.
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Brice
2 years ago
I'd go with Option C. Those high-tech and expensive filling machines are a major investment that would be hard to replicate elsewhere. Outsourcing that would be a risky move.
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Jade
2 years ago
What kind of 'Bright Idea' is it to outsource their core manufacturing capabilities? That's like a light bulb factory outsourcing the production of light bulbs!
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Melissa
2 years ago
I agree with Devora. The building is a prime example of asset specificity that Bright Idea Co. would need to consider carefully.
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Ceola
2 years ago
C) High tech and expensive filling machines in the factory.
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Chandra
2 years ago
B) A building that has been designed specifically for manufacturing light bulb filaments.
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Sarina
2 years ago
A) An R&D manager who has been in the business for 18 years and has specialist knowledge of the formulations.
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Devora
2 years ago
Option B is the clear winner here. A building specifically designed for manufacturing light bulb filaments is a highly specialized asset that would be difficult and costly to replicate elsewhere.
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Val
2 years ago
Definitely, it would be a significant consideration in their decision-making process.
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Jacquelyne
2 years ago
I agree, having a building specifically designed for manufacturing light bulb filaments is a unique asset that would be hard to replace.
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Buck
2 years ago
Yes, having a building designed specifically for manufacturing light bulb filaments is crucial for the company's operations.
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Novella
2 years ago
Yes, it would definitely be a major consideration in their decision to outsource activities.
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Twanna
2 years ago
I agree, having a building specifically designed for manufacturing light bulb filaments is a key asset that would be hard to replace.
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Evangelina
2 years ago
I agree, option B is definitely a key asset specificity to consider.
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