CBS Performance Measurement & KPIs 3

Question 1

A retail chain tracks 'average transaction value' as a KPI. This metric is BEST categorized as:

Accepted Answer

An output KPI

Answer

Average transaction value measures the result (output) of sales interactions rather than the activities or resources that drive them.

Question 2

Which scenario represents a risk of 'gaming' a KPI system?

Accepted Answer

A sales team increases pipeline volume by adding unqualified leads to hit their activity metric

Answer

Gaming occurs when employees manipulate inputs or activities to hit a metric without creating real value.

Question 3

What is the PRIMARY purpose of a performance dashboard in strategic management?

Accepted Answer

To provide real-time or near-real-time visibility into key metrics for informed decisions

Answer

Dashboards aggregate and visualize KPI data to enable rapid, data-driven strategic decisions.

Question 4

An airline measures on-time departure rate. This KPI would be classified under which Balanced Scorecard perspective?

Accepted Answer

Internal Business Process

Answer

On-time departure rate measures operational execution quality, which falls under the Internal Business Process perspective.

Question 5

When setting KPI targets, what does 'stretch target' mean?

Accepted Answer

An ambitious goal that requires significant improvement and innovation to reach

Answer

Stretch targets push teams beyond comfortable levels to drive significant performance improvements.

(CBS) Certified Business Strategist Practice Test