Practice Test Geeks(CBO) Certified Business Operator Practice Test
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Business Operations Management Flashcards

7 cards from real CBO practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Business Operations Management flashcards as text

  1. A business operator discovers that a key supplier has a 15% defect rate. Which corrective action best aligns with Total Quality Management principles?

    Answer: Issue a corrective action request and set measurable improvement targets with the supplier

    TQM emphasizes collaborative supplier development with measurable improvement targets rather than punitive responses.

  2. Which financial metric best measures how efficiently a business converts inventory into revenue?

    Answer: Inventory turnover ratio

    Inventory turnover ratio (COGS ÷ average inventory) directly measures how many times inventory is sold and replaced in a period.

  3. A small business owner wants to reduce waste in order fulfillment. Which methodology is most directly applicable?

    Answer: Lean operations

    Lean operations is specifically designed to identify and eliminate waste (muda) in processes and workflows.

  4. Under the Americans with Disabilities Act (ADA), which obligation applies to businesses with 15 or more employees?

    Answer: Make reasonable accommodations for qualified individuals with disabilities

    The ADA requires employers with 15+ employees to provide reasonable accommodations unless doing so causes undue hardship.

  5. A business uses a FIFO inventory valuation method during a period of rising prices. What is the financial impact compared to LIFO?

    Answer: Lower COGS and higher net income

    FIFO assigns older, lower-cost inventory to COGS first, resulting in lower COGS and higher reported net income when prices rise.

  6. Which type of business structure provides personal liability protection to all owners while allowing profits to pass through to personal tax returns?

    Answer: Limited Liability Company (LLC)

    An LLC combines liability protection for all members with pass-through taxation, avoiding the double taxation of a C-Corporation.

  7. A business operator is evaluating a capital investment using Net Present Value (NPV). If the NPV is negative, what does this indicate?

    Answer: The projected return is less than the required rate of return

    A negative NPV means the discounted future cash flows do not exceed the initial investment at the chosen discount rate, indicating the project destroys value.