CFESA Business Operation 3

Question 1

Which type of business insurance is specifically designed to cover claims when a technician's repair causes additional property damage or injury?

Accepted Answer

General liability insurance

Answer

General liability insurance covers third-party claims for bodily injury or property damage caused by business operations or employees.

Question 2

When calculating a technician's billable efficiency rate, which formula is correct?

Accepted Answer

Billable hours divided by total hours available, multiplied by 100

Answer

Billable efficiency (utilization) rate = billable hours ÷ available hours × 100, showing what percentage of time generates revenue.

Question 3

A service company is deciding whether to expand into a new geographic territory. Which analysis should be completed FIRST?

Accepted Answer

Conduct a market analysis including competition, demand, and operational costs

Answer

Market analysis provides the data needed to make an informed decision before committing capital resources to expansion.

Question 4

What is the purpose of a 'dispatch matrix' in a service operation?

Accepted Answer

A system for routing and prioritizing service calls based on technician location, skills, and urgency

Answer

A dispatch matrix optimizes technician assignment by matching the right technician to each call based on proximity, skill set, and call priority.

Question 5

Which practice BEST protects a service company during a warranty dispute with a parts supplier?

Accepted Answer

Maintaining detailed records of installation dates, part numbers, failure descriptions, and return authorizations

Answer

Detailed documentation provides the evidence needed to successfully process warranty claims and resolve disputes.

CFESA - Commercial Food Equipment Service Association Practice Test