Question 1

Process Management Triangle is made up of capacity utilization,________ and ________ .

Accepted Answer

inventory,

Question 2

________ is any stock of items used to support the production of goods and services or satisfy customer demand.

Accepted Answer

The answer of ________ is any stock of items used...

Question 3

Utilization is the degree to which equipment,space,or labor is currently being used.

Accepted Answer

A) True 
 B)False

Question 4

Wait time is not part of the throughput time for a specific item as it moves through a process.

Accepted Answer

A) True 
 B)False

Question 5

Capacity is the maximum rate of output of a process.

Accepted Answer

A) True 
 B)False

Question 6

What is the capacity cushion and how is it significant for managing processes?

Accepted Answer

Capacity cushion is the amount

Question 7

Table 4.2
High Tech, Inc. is producing two types of products: A and B. Both are produced at the same sawing operation. Because of demand uncertainties, the operations manager obtained three demand forecasts (pessimistic, expected, and optimistic). The demand forecasts, batch sizes (units/batch), processing times (hr/unit), and setup times (hr/batch) follow.
 
$\begin{array}{c}
\quad\quad\quad\quad\quad\text { Time Standard } \quad\quad \quad\quad\quad\quad\quad \text { Demand Forecasts (  000 units/yr) }\
\begin{array}{|l|l|l|l|l|l|l|}
\hline \text { Product } & \text { Processing } & \text { Setup } & \text { Batch Size } & \text { Pessimistic } & \text { Expected } & \text { Optimistic } \
\hline \text { A } & .20 & 2.0 & 40 & 200 & 240 & 300 \
\text { B } & .15 & 3.0 & 50 & 160 & 180 & 200 \
\hline
\end{array}\end{array}$ 
The sawing machines operate on two 8-hour shifts, 5 days per week, and 50 weeks per year. The manager wants to maintain a 10 percent capacity cushion.
-Using the information from Table 4.2,what is the minimum total number of hours required of sawing equipment for the next year?

Accepted Answer

A)  less than 85,000 hours 
B)  more than 85,000 but less than 95,000 
C)  more than 95,000 but less than 105,000 
D)  more than 105,000 hours 
A)  less than 85,000 hours 
B)  more than 85,000 but less than 95,000 
C)  more than 95,000 but less than 105,000 
D)  more than 105,000 hours

Question 8

Table 4.1
The Union Manufacturing Company is producing two types of products: A and B.
The demand forecasts, batch size, and time standards follow:
 $$\begin{array} { l | c | c } 
& \text { Product A } & \text { Product B } \
\hline \text { Demand forecast (units/yr) } & 1000 & 4000 \
\text { Batch size (units/batch) } & 20 & 10 \
\text { Processing time (hr/unit) } & 3.2 & 4.5 \
\text { Setup time (hr/batch } & 0 & 20
\end{array}$$ 
Both products are produced at the same operation called Mark I.
-Use the information in Table 4.1.The company works 250 days per year and operates two shifts,each covering 8 hours.If a 15 percent capacity cushion is maintained,how many hours of capacity can the company expect from each of its Mark I machines?

Accepted Answer

A)  less than 3000 
B)  between 3000 and 3500 
C)  between 3501 and 4000 
D)  more than 4000 
A)  less than 3000 
B)  between 3000 and 3500 
C)  between 3501 and 4000 
D)  more than 4000

Question 9

Which one of the following is NOT a reason why there are economies of scale?

Accepted Answer

A)  Spreading fixed costs, such as depreciation and debt service, over more units 
B)  Finding process advantage by dedicating resources to individual products 
C)  Reduced construction costs by building smaller facilities 
D)  Better bargaining position and quantity discounts on purchased materials 
A)  Spreading fixed costs, such as depreciation and debt service, over more units 
B)  Finding process advantage by dedicating resources to individual products 
C)  Reduced construction costs by building smaller facilities 
D)  Better bargaining position and quantity discounts on purchased materials

Question 10

________ capacity is the maximum output that a process or facility can achieve under ideal conditions.

Accepted Answer

The answer of ________ capacity is the maximum output that...

Question 11

Setup time is the time required to change a machine from making one product or service to making another.

Accepted Answer

A) True 
 B)False

Question 12

Managers of line flow process facilities with high-volume production capability tend to express capacity in terms of

Accepted Answer

A)  output measures. 
B)  maximum input rate. 
C)  number of input units. 
D)  maximum utilization rate. 
A)  output measures. 
B)  maximum input rate. 
C)  number of input units. 
D)  maximum utilization rate.

Question 13

The ________ time for a specific item as it moves through a process can be found by adding the operations,movement and wait times.

Accepted Answer

The answer of The ________ time for a specific item...

Question 14

Which one of the following factors usually calls for a LARGER capacity cushion?

Accepted Answer

A)  uncertain demand 
B)  high capital intensity 
C)  more reliable equipment 
D)  high worker flexibility 
A)  uncertain demand 
B)  high capital intensity 
C)  more reliable equipment 
D)  high worker flexibility

Question 15

Which one of the following statements about measuring capacity is best?

Accepted Answer

A)  The utilization rate is expressed as the ratio of maximum output rate to capacity. 
B)  The minimum output rate for a restaurant would be the number of seats. 
C)  Peak capacity is the output that a facility can sustain under normal conditions. 
D)  A line flow process usually measures its capacity in terms of output rates. 
A)  The utilization rate is expressed as the ratio of maximum output rate to capacity. 
B)  The minimum output rate for a restaurant would be the number of seats. 
C)  Peak capacity is the output that a facility can sustain under normal conditions. 
D)  A line flow process usually measures its capacity in terms of output rates.

Question 16

John Owen owns a drugstore that is experiencing significant growth.Owen is trying to decide whether to expand its capacity,which currently is $200,000 in sales per quarter.Sales are seasonal.Forecasts of capacity requirements,expressed in sales per quarter for the next year,follow.
$$\begin{array} { | c | c | } 
\hline \text { Quarter } & ( \$ 000 ) \
\hline 1 & 240 \
2 & 180 \
3 & 220 \
4 & 260 \
\hline
\end{array}$$
Owen is considering expanding capacity to the $250,000 level in sales per quarter.The before-tax profit margin from additional sales is 15 percent.How much would before-tax profits increase next year because of this expansion?

Accepted Answer

A)  less than $15,000 
B)  more than $15,000 but less than $16,000 
C)  more than $16,000 but less than $17,000 
D)  more than $17,000 
A)  less than $15,000 
B)  more than $15,000 but less than $16,000 
C)  more than $16,000 but less than $17,000 
D)  more than $17,000

Question 17

Which one of the following statements about capacity cushion is best?

Accepted Answer

A)  A larger cushion is required when a firm uses low cost as a competitive priority. 
B)  A larger cushion increases equipment utilization when capital intensity is high. 
C)  Businesses find large cushions appropriate when demand varies. 
D)  A larger cushion increases manufacturing lead time. 
A)  A larger cushion is required when a firm uses low cost as a competitive priority. 
B)  A larger cushion increases equipment utilization when capital intensity is high. 
C)  Businesses find large cushions appropriate when demand varies. 
D)  A larger cushion increases manufacturing lead time.

Question 18

Which one of the following statements about capacity is best?

Accepted Answer

A)  Capacity is the average rate of output for a facility. 
B)  Short-term capacity plans deal with investments in new facilities and equipment. 
C)  A line flow process usually measures its capacity in terms of output rates. 
D)  The utilization rate is expressed as the ratio of maximum output rate to capacity. 
A)  Capacity is the average rate of output for a facility. 
B)  Short-term capacity plans deal with investments in new facilities and equipment. 
C)  A line flow process usually measures its capacity in terms of output rates. 
D)  The utilization rate is expressed as the ratio of maximum output rate to capacity.

Question 19

Mr.Grant is considering a capacity expansion for his store.The annual sales projected for the next five years follow.The current capacity is equivalent to $200,000 sales.Assume a 20 percent pretax profit margin.
 $$\begin{array} { | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { Annual Sales } \
( \$ 000 )
\end{array} \
\hline 1 & 180 \
2 & 210 \
3 & 220 \
4 & 230 \
5 & 260 \
\hline
\end{array}$$ 
If Grant expands his capacity to $225,000 now,what would be the increase in his pretax cash flows for each of the next five years?

Accepted Answer

\[\begin{array} { | c | c | c | } 
\hlin

Question 20

Short-term capacity plans focus on workforce size,overtime budgets,and inventories.

Accepted Answer

A) True 
 B)False

Process Management Triangle is made up of capacity utilization, and .

________ is any stock of items used to support the production of goods and services or satisfy customer demand.

Utilization is the degree to which equipment,space,or labor is currently being used.

Wait time is not part of the throughput time for a specific item as it moves through a process.

Capacity is the maximum rate of output of a process.

What is the capacity cushion and how is it significant for managing processes?

Which one of the following is NOT a reason why there are economies of scale?

________ capacity is the maximum output that a process or facility can achieve under ideal conditions.

Setup time is the time required to change a machine from making one product or service to making another.

Managers of line flow process facilities with high-volume production capability tend to express capacity in terms of

The ________ time for a specific item as it moves through a process can be found by adding the operations,movement and wait times.

Which one of the following factors usually calls for a LARGER capacity cushion?

Which one of the following statements about measuring capacity is best?

Which one of the following statements about capacity cushion is best?

Which one of the following statements about capacity is best?

Short-term capacity plans focus on workforce size,overtime budgets,and inventories.

Creating Customer Value through Operations

Supply Chain Management

Process Configuration

Inventory Management

Quality and Process Improvement

Lean Systems

Managing Projects

Location and Layout

Managing Demand and Forecasting

Operations Planning and Scheduling

Resource Planning

Decision Making

Financial Analysis

Work Measurement

Learning Curve Analysis

Computer-Integrated Manufacturing

Acceptance Sampling Plans

Simulation

Special Inventory Models

Linear Programming

Waiting Lines

Filters

Exam 4: Capacity

Process Management Triangle is made up of capacity utilization,________ and ________ .

________ is any stock of items used to support the production of goods and services or satisfy customer demand.

Utilization is the degree to which equipment,space,or labor is currently being used.

Wait time is not part of the throughput time for a specific item as it moves through a process.

Capacity is the maximum rate of output of a process.

What is the capacity cushion and how is it significant for managing processes?

Which one of the following is NOT a reason why there are economies of scale?

________ capacity is the maximum output that a process or facility can achieve under ideal conditions.

Setup time is the time required to change a machine from making one product or service to making another.

Managers of line flow process facilities with high-volume production capability tend to express capacity in terms of

The ________ time for a specific item as it moves through a process can be found by adding the operations,movement and wait times.

Which one of the following factors usually calls for a LARGER capacity cushion?

Which one of the following statements about measuring capacity is best?

Which one of the following statements about capacity cushion is best?

Which one of the following statements about capacity is best?

Short-term capacity plans focus on workforce size,overtime budgets,and inventories.

Creating Customer Value through Operations

Supply Chain Management

Process Configuration

Inventory Management

Quality and Process Improvement

Lean Systems

Managing Projects

Location and Layout

Managing Demand and Forecasting

Operations Planning and Scheduling

Resource Planning

Decision Making

Financial Analysis

Work Measurement

Learning Curve Analysis

Computer-Integrated Manufacturing

Acceptance Sampling Plans

Simulation

Special Inventory Models

Linear Programming

Waiting Lines

Filters

Process Management Triangle is made up of capacity utilization, and .