Question 3: Business Concept Application
Morning Ritual Roasters: checking KPIs against benchmarks
- Units 1, 2, 3 and 4
- 3 points
- About 13 minutes
You can use a calculator on this question, just like on exam day.
A short scenario about a business gathering evidence for its plans: you describe how it did its research, describe what the data show, and explain how the business could use that finding to reach a goal. On the exam: Question 3 of 4, Section IIB (Questions 2–4 share 65 minutes); suggested time 12–13 minutes, 5% of the score. Assesses Skill Category 1. Section II has 4 free-response questions in 90 minutes (40% of the score). The exam is fully digital in Bluebook, and only a 4-function calculator is allowed (handheld or the built-in Desmos 4-function calculator).
The question and its sources
Respond to parts A, B, and C.
Morning Ritual Roasters
Morning Ritual Roasters roasts coffee beans and sells them online, shipping bags of coffee to customers' homes. Its managers want to open a second roasting facility next year, but only if the business meets or beats industry benchmarks first.
Each quarter, the accounting and operations departments record key performance indicators (KPIs) from the company's own records. Managers compare them with benchmarks from a coffee industry trade association's annual report. Table 1 shows last year's results.
Source: Hypothetical scenario written for this practice question
Table 1. Morning Ritual Roasters' KPIs by quarter, last year
| KPI | Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | Industry benchmark |
|---|---|---|---|---|---|
| Revenue | $120,000 | $126,000 | $131,000 | $140,000 | — |
| Cost of goods sold (COGS) | $74,400 | $80,640 | $86,460 | $95,200 | — |
| Orders delivered on time | 97% | 96% | 93% | 90% | 95% |
| Customer acquisition cost | $52 | $48 | $43 | $38 | $40 |
| Gross profit margin | Not yet calculated | Not yet calculated | Not yet calculated | Not yet calculated | 35% |
Source: Hypothetical data written for this practice question
Suggested time: 13 minutes
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Part (A)
1 pointManagers want to show the change in on-time delivery across the four quarters in a report to the company's owners. Describe a type of data visualization that would best communicate this information, and explain why.
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Part (B)
1 pointDescribe a finding revealed by comparing Morning Ritual Roasters' KPIs with the industry benchmarks.
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Part (C)
1 pointExplain how one department of Morning Ritual Roasters could use a finding from the KPIs to help the business reach its goal of meeting industry benchmarks.
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