Customer Relationship Mgmt - 6880 Words

Examination Paper: Customer Relationship Management IIBM Institute of Business Management Examination Paper Customer Relationship Management Section A: Objective Type (30 marks) †¢ †¢ †¢ This section consists of Multiple Choice questions Short notes type questions. Answer all the questions. Part One questions carry 1 mark each Part Two questions carry 4 marks each. MM.100 Part One: Multiple Choices: 1. High congruence means: a. High probability of success b. Low probability of success c. Zero probability of success d. None of the above 2. Novo Jim’s excellent resource book for Recency, Frequency and Monetary is: a. Drilling high b. Digging the top c. Cutting edges d. Drilling down 3. What stands for ‘R’ in FURPS? a. Responsibility b.†¦show more content†¦With the growing competition in the market, the profitability of the plant had declined which greatly concerned the top management. After reviewing the situation, it was found that the human element was the biggest hurdle in achieving the set targets. There was a need to bring in attitudinal change, as both, the absenteeism and the union interference were high. This union was formed after the workers had felt that the management was exploiting them. Most of the workers had been there since the inception of the plant and the turnover was almost negligible. There was a stron g union present in the plant, which was affiliated to INTUC. The plant managers entered into a long term settlement with the union to set the daily wages and the terms and conditions of work. The long term settlement was renewed every 3 years. The workers were working in 30-day night shifts in a month. Being a textile unit, it was a process industry wherein hurdle at one point of the process would stop the whole production. Moreover, if there were delay in the takeover of the shift, the output of the entire day would be affected. In the matters of indiscipline, the workers were charge sheeted and dismissed arbitrarily. In chronic cases, the worker had to wear a badge with a slogan â€Å"I will not repeat the mistake again† for the entire day on his uniform. The company started thinking of corporate governance and hired the services of Narayan Murthy, AGM (P A and ER) for the JabalpurShow MoreRelatedJet Blue Hits Turbulence964 Words   |  4 PagesSaul Ruiz MGMT 320 Jet Blue Hits Turbulence Case Study 1. What types of information systems and business functions are described in this case? The information systems and business functions described in this case are Transaction Processing Systems (TPS), Customer Relationship Management Systems (CRM, and Executive Support systems (ESS). The TPS system is responsible for tracking ticket reservations and transactions. The CRM systems provide customers the ability to communicate withRead MoreManagerial Analysis : Ulta Beauty Corporation1682 Words   |  7 Pages Managerial Analysis: Ulta Beauty Corporation Georgina Idjagboro 29 June 2015 MGMT 300 Professor Waddleton Ulta Beauty was founded in 1990 and is now the largest beauty and cosmetics retail giant in the nation. The cosmetic industry earns a whopping $245 billion dollars on average a year. Ulta Beauty’s’ long term strategic plan focuses on developing a prestigious shopping environment, and salon services for its market. 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SUBMITTED BY: CHAN LAI FENG ONG AINA ONG EE LING ELAINE MGMT 314 Strategic Management 3795457 3794106 3721668 Page | 1 Table of Contents Introduction ----------------------------------------------------------------------------------------------------------------- 3 eBay’s Business Model ----------------------------------------------------------------------------------------------------Read MoreArise: a Destination-for-a-Day Spa Essay975 Words   |  4 Pagesdevelopment stage is struggling with employee turnover as well as has been operating at a loss for the past two years. ARISE, the spa in question, was built on the business strategy of differentiation which emphasizes employee-customer relationships. Within these relationships, ARISE employees act as Personal Wellness Coaches (PWC) helping clients create â€Å"integrated health and happiness plans†. The key stakeholders in the case are the President and CEO: Kristen Chambers; Vice President of Business

Audit and Assurance in Australia

Questions: (1). Assume you are an auditor and are facing the following separate circumstances .All the following items are material .You can assume that management have refused to make any changes necessary to make the financial report true and fair so that the circumstances mentioned still exist. a. The value of the write off for the Allowance for Doubtful Debts is inadequate .Management are unwilling to adjust it although the amount leads to a material misstatement of Accounts Receivable. The amount of the misstatement is limited to the Receivables and is able to be calculated. b. A retailer provides a valuation for inventory at sales price less an allowance for sales margin. c. The Block company has just been advised that its main customer who purchases 45% of its stock has just gone into liquidation.Due to the specific nature of its products Block company is unlikely to find another customer of this size.Block has been starting to have difficulties in making sufficient sales to continue ope rating. d. The Croucher company has been valuing its buildings using the fair value method .Its buildings are currently shown in the balance sheet at their current market value of 18.5 million. The buildings had originally cost 12 million. e. The Kaycee company values its inventory at LIFO and is unwilling to change it to FIFO as required by the Australian accounting standards.The amount of the misstatement is known and is limited to its effect on the inventory . f. The Genome company has prepared its financial statements but has left out details of its related party disclosures due to privacy issues.This information is required to be included under the Australian accounting standards and while the effects are material they are able to be calculated. Required: For each of the above situations state the Audit Opinion that should be given with a brief reason/explanation related to each one . (2). The Office Two company sells various stationery and office equipment through its stores .It sells items both at its shopfront and through its internet order service .Orders accepted over the phone are delivered in the Sydney metropolitan area within one day . All sales are made for cash.The following are the procedures for sales. a. Customers in the store pay for their stationery giving the cash to a staff member at the desk .The staff member creates an Invoice and gives the customer a receipt on a copy of the Invoice . b. Customers who have ordered over the phone are given a sales order number by the staff member who prints two copies of the order.The staff member then collects the items from the store and arranges delivery of the order ,giving the goods and the invoice copies of the order to the driver. c. The driver delivers the goods to the customer collects the cash from the customer and receipts the customers copy of the invoice. d. The driver returns and hands over the cash and the second copy of the Invoice to a staff member in the store. e. At the end of each day each staff member gives all cash they taken to the Store Manager who locks it in the safe overnight. f. The next day the staff manager opens the safe and takes the cash to the bank alone . Required: Identify the weaknesses in the above procedures. Answers: (1). a. In this particular question, problem arises from writing off allowance for doubtful debts in inadequate manner. Management showed no interest in changing necessary adjustments for provision on bad debts in financial reports for the same (Whittington and Pany 2012). It is necessary to understand audit concept of the situation as far as possible. Company should conduct annual audit for reviewing accounts receivable in detailed analysis. Accounts receivable includes largest assets. Auditors need to change considerable amount of time for gaining assurance for future analysis purpose. Management needs to conduct audit activities for trace receivables in general ledger as well as calculating receivable reports. It investigates on reconciling items as well as testing invoices in receivable reports in the most appropriate way. It matches with shipping log and confirms with accounts receivable in reviewing cash receipts in an effective way (Whittington 2011). b. In this particular question, it requires addressing issues relating valuation of sales prices in allowance with sales margin for the same (Stuart 2012). Auditors have reviewed that revenue recognition poses issues in case of consignment sales, round-trip sales as well as refunding and returning the rights. Management are under pressures in misstating revenues in encouraging investors for impressing upper-level management as well as Board of Directors for the same. Auditors should solve the issues by conducting analytical procedures like running of financial ratio. It compares ways for setting industry benchmarks in the most appropriate way. In case of revenue cycle, auditors should examine gross profit margin as well as amount of growth in experiencing in one year in an effective way (Scott and Jacka 2011). It analyzes organization maximum capacity of sales and facilities of employees for full utilization for future analysis purpose. c. In this particular question, auditors need to solve issues of Block Company. It has gone into liquidation by main customers at 45% for the same (Reding 2011). Auditors need to conduct sales audit in the near future. Auditors need to take corrective actions on Block Company depending upon sales audit as far as possible. Sales audit is comprehensive as well as periodic interpretation of business environment and determination of areas in gaining opportunities in the most appropriate way. It recommends proper course of action as well as improving the sales performance of Block Company. Sales audit begins with aim in recruiting hiring procedures of sales staff members (Pflugarth 2011). It needs to complete record of personnel in relation with backgrounds, experience as well as method of selection of Block Company. d. In this particular question, auditors need to solve issues faced by Croucher Company for future analysis purpose. It is noticed that buildings are valued under fair value method that needs correction as far as possible. Fair value is used for financial reporting system as far as possible. It uses wide range of measuring financial instruments at fair value analysis (Louwers 2011). It calculates impairments in recording assets and liabilities for the same. It needs to assume for business combination in accordance with accounting standard. Account standard setters should continue in turning fair value realisation of in relevant measure of assets as well as liabilities in financial reporting measures in an overall manner (Scott and Jacka 2011). e. In this particular question, company shows unwillingness in changing deprecation method from LIFO method to FIFO method in the near future. It needs to use FIFO in accordance with Accounting Standard. Audit client needs to evaluate in the ending valuation for transferring amount for future analysis purpose (Leung 2011). It transfers amount from the balance sheet transactions for inventory account as well as income statement analysis in the most appropriate way. f. In this particular question, Genome Company had avoided details of party related disclosure that harms reputation of business organization on an adverse manner. It needs to be calculated as per AASB and FASB accounting for future analysis purpose (Kemp 2013). Auditor should involve in maintaining confidentiality of information for smooth functioning of business organization. (2). This particular company sells stationary as well as office equipment through its stores. It aims at selling shop front as well as through internet order services for the same. It identified certain weakness that company does not accept credit from the vendor (Hooks 2011). Credit transactions help in attracting vendor for smooth functioning of business organization. In this case, it is advisable that accountant is appointed for calculation of sales invoices using computerized system. Manual calculation is time-consuming and has the possibility of errors for the same. Customers are paying in cash at the purchase of stationary from the shop. It requires creation of sales invoices in computerised form for proper ways. In case of order given by phone, customers are given sales order number for verification purpose. It is advisable to evaluate print payment system and delivered the goods on timely manner (Hall and Hall 2011). Staff members should evaluate in giving proper attention of the sales invoice for future analysis purpose. It needs computerised way of handling work in the near future. In the next step, driver delivers the goods to the customers as well as collects cash from the customers. This particular company compares deposits for registering as well as invoice totals for the same. It exactly matches with auditing cash sales for a particular period. It solves issues relating cash-handling problems in business operations in an overall manner (Arens 2012). It examines deposits slips in case of cash and check totals in the most appropriate way. It matches sales figures for victim of lapping (Scott and Jacka 2011). Lapping is a case whereby employees remove check from register as well as is recorded in an effective way. It checks over the days sales in reporting for future analysis purpose. Employee places for checking register as well as removing an identical amount of cash. Sales totals match with deposit totals in losing money (Arens 2011). It records cash totals for indicating removing money in case of sales register. It revolves around comparison with inventory sales figures. It needs to examine customer orders. It includes accounts receivable for representing on customers purchases. It based upon credit transactions for invoicing customers. It needs to compare invoices for checking and receipts for the same. It checks sales invoice in examining deposit records in accounts receivable incomes. It helps in examining bills lading especially from stationary department (Whittington and Pany 2012). In case of cash transactions, it includes total outstanding accounts receivable. It includes any invoices from the viewpoint of customers in against outstanding accounts receivable. In this particular case, it needs to check on the store manager for collection of cash from the customers in the most appropriate way (Whittington and Pany 2012). It needs to check on the outstanding accounts receivable as well as total cash receipts in payment with credit cards. It represents total revenues for specified period. It includes total revenues equals gross sales for specified period for auditing reports. Auditor tests controls over company in sales cycle and determination of reliability actions discussed in the financial statements. Auditors need to select random sample of transactions for future analysis purpose (Scott and Jacka 2011). Auditor determines for financial statements for sales amount as well as accounts receivable for verification of individual transactions in an overall manner. Company uses audit for own procedures as well as transactions in ensuring controls in a strong manner (Whittington and Pany 2012). Internet audit depends upon employee fraud as well as designing control over process for future analysis purpose. Reference List Arens, A. (2011).Auditing, assurance services ethics in Australia. Frenchs Forest, N.S.W.: Pearson Australia. Arens, A. (2012).Auditing, assurance services and ethics in Australia. Frenchs Forest, N.S.W.: Pearson Australia. Hall, J. and Hall, J. (2011).Information technology auditing and assurance. Mason, Ohio: Thomson/South-Western. Hooks, K. (2011).Auditing and assurance services. Hoboken, NJ: Wiley. Kemp, S. (2013).Auditing, assurance and ethics handbook 2013. Milton, Qld: Wiley. Leung, P. (2011).Modern auditing assurance services. Milton, Qld.: John Wiley. Louwers, T. (2011).Auditing assurance services. New York: McGraw-Hill Irwin. Pflugarth, G. (2011).Auditing, assurance and ethics handbook 2011. [Frenchs Forest, N. S. W.]: Pearson Australia. Reding, K. (2011).Internal auditing. Altomonte Springs, Fla. Scott, P. and Jacka, J. (2011).Auditing social media. Hoboken, N.J.: Wiley. Stuart, I. (2012).Auditing and assurance services. Whittington, O. (2011).Principles of auditing other assurance services. [Place of publication not identified]: Irwin Mcgraw-Hill. Whittington, R. and Pany, K. (2012).Principles of auditing other assurance services. New York: McGraw-Hill Irwin.

Southwest Airlines Company and Industry Analysis free essay sample

The company’s vision was a low-cost, no-frills airline that was safe, affordable, and fun. Out of that vision, and following and arduous inception, the company has become one of the largest U. S, airlines, getting more travelers to their destinations than any other U. S. airline, and making a profit while doing it. Southwest Airlines was founded and based out of Houston at a time when the city was seeing a growth in commercial and industrial business. The founders of Southwest Airlines believed there was a demand for convenient and consistent flights between large cities, particularly amongst businessmen. Their observations led them to eventually opt for a low cost business strategy with the initial goal of keeping their fares comparable to the cost of making the trip by car. To balance this strategy, the founders also recognized the importance of providing outstanding customer service to bolster the airline’s image and gain customer confidence and loyalty. We will write a custom essay sample on Southwest Airlines Company and Industry Analysis or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Today Southwest has a fleet of 527 aircrafts serving 64 cities in 32 states. Southwest focuses on affordable travel with a strategy which is not built on hub airports but rather flights between pairs of cities, point-to-point. Routes are established where there are enough passengers travelling and a high number of flights per day, with an opportunity to add more flights over time. The company has short turnaround times to keep the plans in the air more hours than rivals. It also has the lowest customer complaints per passengers and a low lost baggage rate as well as high on time arrivals. Southwest Airlines has stayed true to its founding goals and the company’s present success is a direct result of those two key factors. In executing its primary goal to remain the low cost leader, Southwest Airlines could be described as having â€Å"no-frills†. The company keeps its costs low so it can keep its fares low by flying point-to-point rather than through hubs, by only offering one class of service, by utilizing electric ticketing systems to save on paper, and by selling flights directly through its website to eliminate agent fees. Furthermore, through the company’s rigorous fuel hedging tactic, Southwest has saved billions of dollars in fuel costs while operating one type of airplane, which has simplified and improved the airline. All of the aforementioned factors have consistently contributed to lowering Southwest’s operating costs and increased its profitability. Competitor rivalry is a strong force, as there are a lot of similar sized competitors with little differentiation in products and customers are price sensitive. The threat from new entrants is weak due to the high startup costs and high competition that is already in the industry. The bargaining powers of substitutes are weak, traveling by trains and busses means more time than air travel. The bargaining power of buyers is high since the buyer switching cost is low and customers are price sensitive. Also, since customers can book tickets through websites like Expedia or Orbitz, which searches through all available flights and offers customized low prices. Suppliers have a strong bargaining power in the airline industry. In markets today, there is often a concept that price and value are inversely related. As part of its key success factors, Southwest Airlines sought to overcome this notion by focusing on adding worth in the form of exceptional customer service. From the highest administrators to the lowest attendants, Southwest’s employees are often hired based more on their attitude rather than their aptitude. Southwest believes that skills can be taught, but genuine courtesy and a fun-loving spirit cannot. By providing this exceptional service experience, Southwest Airlines has found a way to offer â€Å"more value for less money. † Since 1973, Southwest Airlines has had positive income statements and this has proved that the airline can remain profitable even in the most turbulent economic conditions. Despite its success however, Southwest faces numerous forces that could potentially erode its profitability. Rising fuel costs, increasing government regulations, and ongoing public fear of terrorist attacks, are some of the key issues the company is forced to face. First, as a discount airline carrier, Southwest was designed to service a small number of high capacity routes rather than a broad spectrum of diverse destinations. Secondly, increasing debt to the company that has prided itself on paying close attention to bottom line profitability. A third issue that Southwest faces is one that is less tangible but very real. The potential drop in general airline traffic due to increasing internet communications in the form of videoconferencing could mean less business travel. If business travel declines, Southwest may want to shift its focus to vacationers and casual travelers. Southwest Airlines was founded on the tenet of fiscal conservatism primarily with maintaining low levels of debt. Southwest has experienced an increase in debt from 2003 to the present. In the short span of 4 years, the debt-to-equity ratio has increased by . 5 percent. Factors that might have contributed to an increase in debt may include expense of employee separation packages, lawsuits against Southwest, and much needed system operations upgrade. While this may not be a significant problem right now, the company could decrease its current debt levels by keeping more thorough maintenance records thus avoiding potential lawsuits. Utilizing new technology and continuing to hedge with futures contracts on oil can cut the company’s rising fuel costs. While Southwest’s flight routes have been the cornerstone to its success, it could stand to become more geographically diverse. That stated, it is recommended that the company continue to stay out of larger U. S. irports and instead diversify itself throughout Canada, Mexico, and the Caribbean. The company should research the international markets and simply duplicate its current business strategy on a more global scale. It is recommended that the company should consider acquiring smaller low-cost domestic airlines and look outside of the U. S. for new potential markets. If Southwest Airlines is able to successfully do this, they will be able to undermine existing larger carrier airlines and will create a new revenue stream.

Obesity in nursing essays

Obesity in nursing essays Societies perception about the perfect person is best known to have the perfect body. The healthy habit I have decided to write on is being overweight. Being overweight has many effects on children as well as adults. As an overweight child he or she has many problems growing up. For instance larger kids are more likely to be rejected by other children because of their size. Children are also teased more and they also have fewer friends because they are so called different. In the book Essential Concepts for Healthy Living it says that, As in the adult population, the number of overweight school age children is increasing in the United States. About 12% to 14% of American children are seriously overweight. For adults they also have problems being overweight. For instance health issues come into play when they can have heart problems, diabetes, and other health problems. Obesity also limits their ability to move around and to work out. Adults also have the stereotype to live up to as being muscular or slim. Being overweight also makes it harder to find a partner and it also limits success in work. The reason being overweight is important to me is because at one time I was very obese. I have lost about 50 pounds and I am still overweight but I am still loosing. The reason this issue is important to me is because I want to feel good about myself, and the way I look, and I always want to be physically healthy. It is important to me also, because I want to lesson my chance of getting heart diseases and other diseases to being overweight.( www.webmd.com) This is a big problem in the United States because of fast food and the lack of exercise.( Journal of Advanced Nursing ) I also dont want to have an early death because being overweight lessons your life expectancy and I dont want to put my family through this. I also think that being overweight can cause emotional problems and this can ca...

American Presidency Essay Example | Topics and Well Written Essays - 1250 words

American Presidency - Essay Example An interrelated program of domestic-policy reforms characterized the Reagan policy agenda. We see this in the administrations work to reduce the size and scope of the federal government, which entailed lowering federal taxation and domestic spending as well as the deregulation and returning of the power to the states.i The Omnibus Budget Reconciliation Act of 1981 was the first of changes that Reagan launched in his pursuit of his domestic policy. This legislation brought about far-reaching budget cuts and policy shifts and is considered to be one of Reagan’s major achievements in domestic policymaking. Besides significantly trimming domestic spending and trimming the federal government’s role in domestic program areas, the legislation had two other significant effects: first, it substantially changed welfare programs, and second, it increased the proportion of federal grant funds that are channeled to the states and reduced the share paid to local units of government.i i Reagan’s experience as governor of California, prior to his election as President, influenced his attitude toward domestic policy. As governor, Reagan became convinced that the states could play the major role in running domestic programs such as welfare. He saw in this experience that domestic policy choices are best made at the state level and that this philosophy became the foundation of his New Federalism. Reagan emphasized this in his 1982 State of the Union address: Our citizens feel they have lost control of even the most basic decisions made about the essential services of government, such as schools, welfare, roads, and even garbage collection. They are right. A maze of interlocking jurisdictions and levels of government confronts the average citizen in trying to solve even the simplest of problems. They do not know where to turn to†¦ who to hold accountable.iii For Reagan

Historical Geography of North America Journal Review Essay

Historical Geography of North America Journal Review - Essay Example Mann's sources are recognizable experts in this arena and the article cites them prolifically. While many of Mann's points make enough logical and reasonable sense to dispel the widely held romantic version of the early settlements, the author's arguments rely on a connect-the-dots logic in the absence of a complete historical record. The author succeeds in making the point that the early American settlers were not faced with the typically romantic ideal of cooperation with the environment and struggling against Mother Nature. Instead, he paints a stark picture of famine, disease, and constant hardship replete with starvation and cannibalism. His vision of the Europeans being able to stave off hostile attacks from the Natives is based on the theory that the Natives had been severely weakened by Malaria. Mann also dispels the myth of Pocahontas saving the life of John Smith in 1607. However, this is a literary story that is part of America's myth and hardly an historical moving revelation. The real power of the article is the sense the author gives us that, "Much of what we learned in grade school about the New World encountered by the colonists at Jamestown turns out to be wrong". It demands further investigation and invites a more deeply researched debate. The author contends that the ecology of ... s little evidence offered for the damage done by the earthworm purportedly imported in European soil, it has been long held that the agricultural practices of Europe had a profound effect on the New World. The author also magnifies the destruction that domesticated animals did to the native's farmland, and the resulting tensions between the Natives and the Europeans. Here again, the author gives a reasonable view of animal farming in New England of large animals running wild and destroying the crops of the Natives. However, the evidence is anecdotal and does not consider the viewpoint that it may have been more likely that the animals were restrained and managed as they were in England, as that would be in the best interest of the settlers. However, Mann's point that they altered the ecological landscape cannot be refuted. The strength of the article, apart from its intellectual stimulation, is its contention that European farming and agricultural practices forever transformed the landscape. Mann explains why the different approaches held by the Natives and Europeans to the concept of property ownership came at odds and favored the Europeans. The Native culture believed in a constantly evolving landscape where property rights would shift according to need and use. The Europeans believed in private property ownership and were thus able to accumulate property. The introduction of new plants and controlled agriculture invaded the New World and left a permanent change on the face of America. There can be little argument that tobacco and corn changed the soil, the land, the people, and the economy of the New World. In conclusion, this article is a well-written consensus of a number of noted experts. While it may be somewhat shy of hard evidence, the incomplete historical

Determining Cognitive Functioning of Individual

Determining Cognitive Functioning of Individual Serial assessment in neuropsychology is necessary to make inferences regarding an individual’s level of functioning, i.e. to determine whether there has been ‘real’ improvement or decline, outside of measurement error, normal variation and clinically insignificant change [1]. A number of psychometric methods have been developed in order to interpret changes in test scores over repeated occasions of assessment. The associated problems and processes that are involved in delineating observed scores into their subcomponents of measurement error and true scores are complex and problematic [1]. Acquiring knowledge and understanding of issues pertaining to measurement error, such as the standard error of measurement (SEM,) is crucial to accurate interpretation of neuropsychological test results and change scores. The SEM refers to the total error variance of a set of obtained scores, where the obtained scores are an unbiased estimate of an individual’s true score [2]. It is the standard deviation (SD) of an individual’s test scores had the specified test been undertaken multiple times, and is calculated by multiplying the baseline SD of a measure by the square root of one minus the reliability coefficient of the measure [3]. The SEM is inversely related to a test’s reliability, such that larger SEMs reflect less reliable tests, and therefore denote diminished accuracy with the measure taken and the scores obtained [1]. This leads to greater variability within a test battery and thus any interpretation of results in such a case should be undertaken with a considerable degree of caution [4]. SEMs are useful in preventing the unwarranted attachment of significant meaning to between-score differences. That is, SEMs and their corresponding confidence intervals may overlap, indicating that some of the observed score difference may actually be attributable to error in measurement [1]. However, whilst the SEM is useful for estimating the degree of measurement error, it is not a suitable predictive measure as it is based on a distribution that presumes true score knowledge, which will always be unknown as tests do not have perfect reliability. As such, utilising the standard error of estimate (SEE) for such purposes may be the more appropriate method [2]. The SEE is a method which utilises a regression-based approach and measures the dispersion of predicted scores [5]. The SEE reflects the SD of true scores when the observed score is held constant, and is the statistic from which confidence intervals should be constructed [2]. The construction of confidence intervals is closely related to a test’s reliability. More reliable tests, in terms of internal consistency, represent homogeneity within the test itself. Thus, the associated confidence intervals will encompass a more narrow range of scores, with the resulting estimate being more precise [2]. It is therefore necessary to consider a test’s reliability coefficient, as below a certain point, the utility of a test is compromised [2]. Furthermore, as the reliability of a test is the single largest factor in determining the degree of change needed to occur over time from which the observed difference can be deemed to reflect actual change, using tests with high reliability coefficients is of paramount importance [6]. The consideration of measurement error in neuropsychological test results may also incorporate the assessment of observed score differences in terms of clinical significance. Clinically significant change can be interpreted on the basis of whether an individual’s change in test performance over two occasions reflects sufficient improvement, so that the individual has shifted classification categories, for example from ‘impaired’ to ‘normal’ [6]. Therefore, if a change is to be considered clinically significant, the tests being used to assess observed score differences need to be reliable. However, interpreting clinically significant change may also be problematic. Whilst there may be a considerable observed change in test scores from one measurement occasion to the next, if the starting point is at the extreme low end of a category, and the end point is at the extreme high end of a category, then an individual’s classification will not change and clinically significant improvement will not be deemed to have occurred [6]. This is a problematic interpretation as these changes may well have had important functional consequences for the individual that underwent assessment, and thus it is important to employ sensible clinical judgement [6]. Caution also needs to be applied to the interpretation of statistically reliable change, to avoid the implication that it represents real change. In reality, the observed change may instead reflect measurement error [6]. Statistically meaningful differences may also be a common occurrence within a particular population [7], but these are not necessarily clinically significant differences. Whilst neuropsychological test interpretation must consider, amongst other things, base rates of expected differences and abnormalities, the number of measures in a battery must also be taken into account, as abnormal performance on a proportion of subtests within a battery should be regarded as psychometrically normal [4]. A number of methods for calculation of reliable change have been proposed, adopted and further modified. These methods are usually given the designation of Reliable Change Index (RCI), and are used to estimate the effect of error variance on test score accuracy [6]. The value of the RCI is used to indicate the probability of the difference between two observed scores being the result of measurement error, and thus if the resulting probability is low, the difference is likely due to factors external to the test itself [1]. The notion of reliable change originated in classical test theory, with the standard error of the difference used as the criterion for determining whether an observed difference is credible under the null hypothesis of no real change [8]. However, the original, unmodified classical approach assumes that there are no practice effects. Certain subsequent variations of this approach have aimed to account for practice effects, in one of two ways. Either by a simple adaptation of the Jacobson and Truax approach (a widely used, simplified version of the classical approach, called the JT index), or via estimation of true change by using a regression equation, with the latter method being the favoured alternative in this context [8]. This regression-based approach does not require the test scores at each of the time points to have equal variance, and thus practice effects can occur [6]. There are many further approaches to calculation of RCIs, with no real consensus about which method is superior and should represent the ‘gold standard’ approach [8]. Furthermore, whilst RCI methods do have a number of advantageous features, there are still inherent limitations when considering factors such as real change that remains undetected if it falls below the RCI threshold [6]. Additionally, whilst reliable change methodology adjusted for practice effects has the potential to reduce measurement error and improve clinical judgement, it utilises a constant value the group mean – and so does not take into account the full range of possible practise effects, nor does it traditionally account for regression to the mean, so that error estimates are not proportional to the extremities of observed changes [1]. However, this methodology does at least provide a systematic and potentially empirically valid approach to assessment of real change [6]. In contrast, whil st regression methods do also have their own inherent limitations, such as greater utility in larger sample sizes, these are considered less extensive than RCI methodology [1]. The methods discussed thus far are primarily distribution-based approaches, meaning that they express observed change in a standardised format. A primary disadvantage of this type of approach is that they are purely statistical measurements which do not reveal the clinical significance of any observed change [9]. Alternative approaches include the use of reference states to estimate the minimal important difference or change, which refers to the smallest change in health quality that the patient is able to perceive and that is considered clinically relevant change [3]. However, these approaches have their own inherent limitations, with direct and subjective patient involvement in the change assessment process increasing the complexity of the measurement [3]. As the determination of an individual’s current cognitive functioning, as well as whether this functioning has improved or declined since prior assessment, is fundamental to the efficacy of clinical neuropsychology, the ability to reliably determine change via comparison of test scores is crucial [6]. However, as has been outlined above, the approaches involved in this determination are varied in their efficacy, and come with inherent limitations. As such, when considering the clinical significance of test results, a patient’s performance needs to be interpreted contextually, taking into account relevant behavioural, medical and historical information, as psychometric variability alone is not sufficient [4]. Furthermore, examination of the functional outcomes of any measured change is crucial, as this is of at least equivalent importance in determining whether improvement or decline has taken place [6]. References 1. Brooks, B.L., et al., Developments in neuropsychological assessment: Refining psychometric and clinical interpretive methods. Canadian Psychology/Psychologie canadienne, 2009. 50(3): p. 196. 2. Charter, R.A., Revisiting the standard errors of measurement, estimate, and prediction and their application to test scores. Perceptual and Motor Skills, 1996. 82(3c): p. 1139-1144. 3. Rejas, J., A. Pardo, and M.à . Ruiz, Standard error of measurement as a valid alternative to minimally important difference for evaluating the magnitude of changes in patient-reported outcomes measures. Journal of clinical epidemiology, 2008. 61(4): p. 350-356. 4. Binder, L.M., G.L. Iverson, and B.L. Brooks, To err is human:â€Å"Abnormal† neuropsychological scores and variability are common in healthy adults. Archives of Clinical Neuropsychology, 2009. 24(1): p. 31-46. 5. McHugh, M.L., Standard error: meaning and interpretation. Biochemia Medica, 2008. 18(1): p. 7-13. 6. Perdices, M., How do you know whether your patient is getting better (or worse)? A users guide. Brain Impairment, 2005. 6(03): p. 219-226. 7. Crawford, J.R., P.H. Garthwaite, and C.B. Gault, Estimating the percentage of the population with abnormally low scores (or abnormally large score differences) on standardized neuropsychological test batteries: a generic method with applications. Neuropsychology, 2007. 21(4): p. 419. 8. Maassen, G.H., E. Bossema, and N. Brand, Reliable change and practice effects: Outcomes of various indices compared. Journal of clinical and experimental neuropsychology, 2009. 31(3): p. 339-352. 9. Ostelo, R.W., et al., Interpreting change scores for pain and functional status in low back pain: towards international consensus regarding minimal important change. Spine, 2008. 33(1): p. 90-94.