Certified Production & Operations Manager (POM) Practice Exam

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Get ready for the Certified Production and Operations Manager Test. Study with flashcards, hints, and multiple-choice questions. Enhance your knowledge and improve your skills for the POM certification!

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What analysis tool ranks products by their individual dollar contribution to the firm?

Cost-benefit analysis
Product-by-value analysis
Market opportunity assessment
SWOT analysis

The correct answer is: Product-by-value analysis

The tool that ranks products by their individual dollar contribution to the firm is known as product-by-value analysis. This method focuses on identifying which products contribute the most to profitability through an assessment of their individual revenue and cost structures. By ranking products based on their dollar contribution, firms can prioritize their resources towards those that provide the highest financial return, allowing for optimized decision-making in product development, marketing, and sales strategies. In contrast, cost-benefit analysis evaluates the financial implications of various options or investments, comparing costs to expected benefits but does not specifically rank products based on contribution. Market opportunity assessment involves evaluating the potential market size and growth prospects for different products, focusing on market dynamics rather than direct dollar contributions. SWOT analysis examines a company's strengths, weaknesses, opportunities, and threats to inform strategic planning, but does not provide a systematic method for ranking products by their financial performance. Thus, product-by-value analysis is the most relevant tool for this specific purpose.