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CIMAPRO19-P02-1 Exam - Topic 7 Question 31 Discussion

GHY has two subsidiaries. GHY-Motor manufactures car engines and GHY-Build designs and assembles cars. In the car industry it is common for manufacturers to buy parts, including engines, from other manufacturers.GHY has granted GHY-Motor and GHY-Build full autonomy. GHY-Build is considering using an engine from another company for a new model that it is designing. GYY-Motor has a suitable engine, but it charges more than GHY-Build's preferred supplier.Which of the following statements is correct? Select ALL that apply.
A) GHY should consider permitting GHY-Motor to charge part of the selling price on engines sold to GHY-Build to head office. and B) Forcing GHY-Motor to grant a discount to GHY-Build could lead to dysfunctional behavior. and C) There could be significant non-financial issues associated with GHY-Build's decision to buy another engine.
D) Parent companies should never grant subsidiaries full autonomy on matters such as intra-group sales.
E) The threat of dysfunctional behavior is largely theoretical and managers can be trusted to maximise shareholder wealth.

CIMAPRO19-P02-1 Exam - Topic 7 Question 31 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam
Question #: 31
Topic #: 7
[All CIMAPRO19-P02-1 Questions]

GHY has two subsidiaries. GHY-Motor manufactures car engines and GHY-Build designs and assembles cars. In the car industry it is common for manufacturers to buy parts, including engines, from other manufacturers.

GHY has granted GHY-Motor and GHY-Build full autonomy. GHY-Build is considering using an engine from another company for a new model that it is designing. GYY-Motor has a suitable engine, but it charges more than GHY-Build's preferred supplier.

Which of the following statements is correct? Select ALL that apply.

Show Suggested Answer Hide Answer
Suggested Answer: A, B, C

by Willodean at May 03, 2022, 08:44 PM

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Ariel
10 months ago
Trusting managers to maximize wealth? That's risky!
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Scarlet
10 months ago
Totally, autonomy should come with some limits!
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Torie
11 months ago
Non-financial issues? Really? Sounds exaggerated.
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Estrella
11 months ago
I agree, forcing a discount could mess things up.
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Thaddeus
11 months ago
GHY-Motor charges more than the other supplier.
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Cory
11 months ago
I've got a strategy for this. I'll start by considering the general behavior of these low-level functions - do they interrupt execution on error or continue silently? Then I'll look at the specific details of each option to see which one best matches the description.
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Nidia
11 months ago
This is a good question. I'll make sure to read through the instructions thoroughly and double-check my work before submitting.
upvoted 0 times
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Emmanuel
11 months ago
Okay, let's see. I know GRUB is a popular boot loader, but I'm not sure about the specifics of its support for different operating systems.
upvoted 0 times
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Deane
11 months ago
Hmm, I'm a bit unsure about this one. I know Azure DevOps has some test management capabilities, but I'm not sure if it's the best fit for tracking business process test steps specifically. I might need to do some more research on the other options.
upvoted 0 times
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