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Activity scheduling information for the installation of a new computer system is given below The earliest completion time for the project is:
500-005 exam Correct Answer: C
The critical path is the longest path because it defines the minimum duration of the project. A-D-E 4 + 6 + 5 = 15) is the critical path.
In a critical path analysis, if slack time in an activity exists, the activity:
A. Is not essential to the overall project.
B. Is a backup activity to replace a main activity should it fail.
C. Could be delayed without delaying the overall project.
D. Involves essentially no time to complete.
Correct Answer: C
Slack is the free time associated with each activity. In other words, paths that are not criticalhave slack time. Slack represents unused resources that can be diverted to the critical path.
The primary difference between PERT and CPM is that:
A. CPM uses probabilities on the activity times and PERT does not.
B. PERT considers activity costs and CPM does not.
C. PERT can assign probabilities to activity times and CPM does not.
D. CPM considers activity costs and PERT does not.
500-005 dumps Correct Answer: D
Both PERT and CPM are network analysis techniques. But CPM was developedindependently of PERT and is widely used in the construction industry. CPM may be thoughtof as a subset of PERT. Like PERT, it is a network technique, but, unlike PERT, it usesdeterministic time and cost estimates. Its advantages include cost estimates plus the conceptof “crash” efforts and costs. Activity times are estimated for normal effort and crash effort.Crash time is the time to complete an activity assuming that all available resources weredevoted to the task overtime, extra crew, etc.). Activity costs are also estimated for normaland crash efforts. These estimates allow the project manager to estimate the costs ofcompleting the project if some of the activities are completed on a crash basis. The networkdiagram is constructed in the same manner as PERT diagrams. Once the diagram isconstructed, the critical paths are found for normal and crash times. More than one criticalpath may exist for each diagram.
Is PERT analysis a control tool or a planning tool?
A. Option A
B. Option C
C. Option C
D. Option D
Correct Answer: B
PERT Program Evaluation and Review Technique) is applied in the management ofcomplex projects. It analyzes the project in terms of its component activities and determinestheir sequencing and timing. Thus,it systematically combines planning with control.
Various tools are employed to control large scale projects. They include all of the following except:
C. Statistical process control
D. Gantt charts.
500-005 pdf Correct Answer: C
Statistical process quality) control is not used to control large scale projects. Statisticalquality control is a method of determining whether the shipment or production run of unitslies within acceptable limits. It is also used to determine whether production processes areout of control.
Which of the following statements is false regarding the efficient and economical achievement of the organization’s objectives?
A. Economical performance accomplishes objectives with minimal use of resources with noregard to risk exposure.
B. Efficient performance accomplishes objectives in a timely manner.
C. Economical performance accomplishes objectives with minimal use of resourcescommensurate with the risk exposure.
D. Efficient performance accomplishes objectives in an accurate and economical manner.
Correct Answer: A
Efficient performance accomplishes objectives and goals in an accurate, timely, andeconomical fashion. Economical performance accomplishes objectives and goals withminimal use of resources i.e., cost) commensurate with risk exposure. Thus, to achieveeconomical performance when accomplishing objectives, the minimal cost should correspondto the degree of risk exposure.
Business process reengineering is most likely to:
A. Implement modern information systems technology to eliminate some controls.
B. Be applied within individual departments.
C. Improve existing procedures.
D. Apply a continuous improvement model.
500-005 vce Correct Answer: A
Reengineering and TQM techniques eliminate many traditional controls. They exploitmodern technology to improve productivity and decrease the number of clerical workers. Thus, controls should be automated and self-correcting and require minimal humanintervention. Moreover, auditors must be prepared to encounter and use) new technologies.
The emphasis therefore shifts to monitoring so management can determine when anoperation may be out of control and corrective action is needed.
Monitoring is an important component of internal control. Which of the following is not an example of monitoring?
A. Management regularly compares divisional performance with budgets for the division.
B. Data processing management regularly generates exception reports for unusualtransactions or volumes of transactions and follows up with investigation as to causes.
C. Data processing management regularly reconciles batch control totals for items processedwith batch controls for items submitted.
D. Management has asked internal auditing to perform regular audits of the controls overcash processing.
Correct Answer: C
Monitoring assesses the quality of internal control over time. Management considers whetherinternal control is properly designed and operating as intended and modifies it to reflectchanging conditions. Monitoring may be in the form of separate, periodic evaluations or ofongoing monitoring. Ongoing monitoring occurs as part of routine operations. It includesmanagement and supervisory review, comparisons, reconciliations, and other actions bypersonnel as part of their regular activities. However, reconciling batch control totals is aprocessing control. This information is relevant to a theory of constraints TOC) analysis. Amanufacturer that can sell all of its output produces its sole product using three operations.Each unit sells for US $120, anddirect materials costing US $48 per unit are added at thestart of the first operation. Other variable costs are immaterial. The following annual cost andcapacity information is available concerning those operations:
Assume that additional workers are hired for the bottleneck operation to expedite setups and materials handling. The cost of the additional workers is US $50,000 per year. As a result, the annual output of the bottleneck operation will increase by 500 units. The change in operating income attributable to the increase in workers is:
A. US $50,000
B. US $36,000
C. US $ 14,000)
D. US $ 20,000)
500-005 exam Correct Answer: C
Operation 2 is the bottleneck because it is functioning at its capacity. The incremental annualthroughput contribution revenues — direct materials costs) from adding workers toOperation 2 is US $36,000 [500 units x $120 unit price — $48 DPI per unit)]. Because thecost of the additional workers is US $50,000, the change in operating income is US $14,000). This information is relevant to a theory of constraints TOG) analysis. Amanufacturer that can sell all of its output produces its sole product using three operations.Each unit sells for US $120, anddirect materials costing US $48 per unit are added at thestart of the first operation. Other variable costs are immaterial. The fallowing annual cost andcapacity information is available concerning those operations:
Assume that C Company offers to perform the operation 2 function on 1,000 units at a unit price of US $40, excluding direct materials cast. Also assume that Y Company offers to perform the Operation 1 function an 1,000 units at a unit price of US $7, excluding direct materials cost. Which of these mutually exclusive offers is acceptable?
A. C but not Y.
B. Y but not C.
C. X or Y.
D. Neither offer should be accepted.
Correct Answer: A
KG’s offer should be accepted because its cast is US $40,000 1,000 units x $40), but theincrease in throughput contribution is US $72,000 [1,000 units $120 unit price — $48 E’ 1per unit)]. Hence, the relevant cost of QC’s offer is less than the incremental throughputcontribution. ms’s offer effectively increases the capacity of the bottleneck operation. Y’soffer should be rejected because, even though its US $7 unit price is less than the US $8 unitoperating cost excluding direct materials)
for Operation 1. it will result in the incurrence ofadditional casts with no increase in throughput contribution, given that Operation 2 is alreadyproducing at its 150,000-unit capacity.
Company J produces two components: A-1 and A-2. The unit throughput contribution margins for A-1 and A-2 are US $150 and US $300, respectively. Each component must proceed through two processes: Operation 1 and Operation 2. The capacity of Operation 1 is 180 machine hours, with A-1 and A-2 requiring 1 hour and 3 hours, respectively. Furthermore, Company J can sell only 45 units of A-1 and 100 units of A-2. However, Company J is considering expanding Operation 1’s capacity by 90 machine hours at a cost of US $80 per hour. Assuming that Operation 2 has sufficient capacity to handle any additional output from Operation 1, how much should Company J produce?
A. Option A
B. Option C
C. Option C
D. Option D
500-005 dumps Correct Answer: C
A-1’s throughput contribution margin per unit of the scarce resource the internal bindingconstraint) is US $150 $150 UCM – 1 machining hour). A-2’s throughput contributionmargin per unit of the scarce resource is U $100 $300 UCM – 3 machine hours). Consequently, Company J should produce as much A-1 as itcan sell 45 units). If Companyadds 90 machine hours to increase the capacity of Operation -I to 270 hours 180 + 90), itcannot produce additional units of A-1 because the external binding constraint has not beenrelaxed. However, it can produce additional units of A-2. Given that the UCM per machinehour of A-2 is U $100 and that the cost is US $80 per hour, adding capacity to Operation 1 isprofitable. Thus, Company J should use 45 machine hours to produce 45 units of A-1. Theremaining 225 machine hours 270 – 45) should be used to produce 75 units 225 – 3 hours) ofA-2. The latter amount is within the external binding constraint. A company produces twoproducts, and Y, which use material and labor as inputs. Fixed amounts of labor and materialare available for production each month In addition. the demand for product Y each month islimited: product has no constraint an the number of units that can be sold. A graphicaldepiction of these production and demand constraints is presented in the opposite column.
The feasible solution region is bounded by the lines connecting points:
A. 3, 4, 6, and 7.
B. I, 5, 6, and 8.
C. 2, 4, , , and 8.
D. 3, E. 6, and 7.
Correct Answer: A
A model consisting of a system of functions may be used to optimize an objective function. If the functions in the model are all linear, the model is a linear programming model. Linearprogramming is a technique to determine optimal resource allocation. Several solutionmethods are available to solve linear programming problems. The graphical method, theeasiest technique, is limited to simple problems. Here, the graph consists of three lines, eachrepresenting a production constraint. The lines connecting points , 4, 6, and 7 bound thefeasible solution region. Product mikes of and Y that lie outside this boundary cannot beproduced and/or sold because the demand constraint line ,4), the labor constraint line 4,6),and the material constraint line 6,7) are binding. A company produces two products, and Y,which use material and labor as inputs. Fixed amounts of labor and material are available forproduction each month In addition. the demand for product Y each month is limited: producthas no constraint an the number of units that can be sold. A graphical depiction of theseproduction and demand constraints is presented in the opposite column.
If a series of profit lines for and Y are drawn on the graph, the mix of G and Y that will result in the maximum profit can be determined from:
A. The last point in the feasible solution region touched by a profit line.
B. Any point on the boundary of the feasible solution region touched by a profit line.
C. The first paint an the feasible solution region boundary that intersects a profit line.
D. Any point on the demand constraint that intersects a profit line.
500-005 exam Correct Answer: A
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