8. Performance Evaluation

Benchmarking — Quiz

Test your understanding of benchmarking with 5 practice questions.

Practice Questions

Question 1

Which of the following is an example of a qualitative benchmark used in accounting?

Question 2

In benchmarking, setting a target to \Reduce invoice processing time by 20% within six months\" exemplifies which criterion of SMART objectives?"

Question 3

A company’s inventory turnover ratio is 6 times per year, while the industry average is 8 times. What is the company’s days inventory outstanding (DIO), and what does this indicate?

Question 4

A firm uses three KPIs for benchmarking: Cost variance score 85% (weight 0.4), On-time delivery rate 90% (weight 0.35), Quality conformance 95% (weight 0.25). What is the overall composite benchmark score?

Question 5

A process has a current defect rate of 5%, and the industry benchmark is 3%. By what percentage must the company reduce its defect rate (relative to its current rate) to meet the benchmark?