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1.What is meant by the term decentralization? What benefits result from decentralization?

2.Distinguish between a cost center, a profit center, and an investment center.

3.In what way can the use of ROI as a performance measure for investment centers lead to bad decisions? How does the residual income approach overcome this problem?

4.What is the difference between delivery cycle time and throughput time? What four elements make up throughput time? What elements of throughput time are value-added and what elements are non–value-added?

5.What does a manufacturing cycle efficiency (MCE) of less than 1 mean? How would you interpret an MCE of 0.40?

6.Why do the measures used in a balanced scorecard differ from company to company?

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