Question 1

If customer demand exceeds process capacity, every operation with capacity utilization greater than 100 percent is an external bottleneck.

Accepted Answer

A) True 
 B)False  True

Question 2

Which of the following descriptions about waiting line models is best?

Accepted Answer

A)  They account for the random, independent behaviour of many customers. 
B)  They deal with the certainty and stability in demand. 
C)  They account for major events such as competitor actions. 
D)  They assume that each branch can give the highest expected payoff. 
A)  They account for the random, independent behaviour of many customers. 
B)  They deal with the certainty and stability in demand. 
C)  They account for major events such as competitor actions. 
D)  They assume that each branch can give the highest expected payoff. A

Question 3

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

Accepted Answer

inventory, variability

Question 4

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 to...

Question 5

Capacity gap is an addition to projected demand and current capacity.

Accepted Answer

A) True 
 B)False

Question 6

Within a process, what is a bottleneck?

Accepted Answer

A bottleneck is an operation t

Question 7

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

Accepted Answer

A)  The expansionist strategy minimizes risk. 
B)  The timing and sizing of expansion are related. 
C)  The expansionist strategy lags behind demand and relies on short- term capacity expansion options. 
D)  Lost sales are more likely if the expansionist strategy is used. 
A)  The expansionist strategy minimizes risk. 
B)  The timing and sizing of expansion are related. 
C)  The expansionist strategy lags behind demand and relies on short- term capacity expansion options. 
D)  Lost sales are more likely if the expansionist strategy is used.

Question 8

Innovative Inc. is experiencing a boom for the products it has introduced recently. The estimated annual sales projected for the next five years are given below. The current capacity is equivalent to only $100 million sales. The company is considering the alternative of expanding capacity to an equivalent of $250 million sales. Assume a 25 percent pretax profit margin. What is the increase in total pretax cash flow (summed over all years) that would be enjoyed because of the expansion? $$\begin{array} { | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { AnnualSales } \
\text { (in \$million) }
\end{array} \
\hline 1 & 100 \
2 & 140 \
3 & 170 \
4 & 200 \
5 & 250 \
\hline
\end{array}$$

Accepted Answer

A)  less than or equal to 40 million 
B)  more than 40 million but less than or equal to 70 million 
C)  more than 70 million but less than or equal to 100 million 
D)  more than 100 million 
A)  less than or equal to 40 million 
B)  more than 40 million but less than or equal to 70 million 
C)  more than 70 million but less than or equal to 100 million 
D)  more than 100 million

Question 9

The ______ time is the time required to change an operation from making one type of product or service to making another.

Accepted Answer

The answer of The ______ time is the time required...

Question 10

What information would managers use to choose the best cost- effective capacity to balance customer service with the cost of adding capacity?

Accepted Answer

A)  capacity cushion 
B)  decision trees 
C)  waiting line models 
D)  economies of scale 
A)  capacity cushion 
B)  decision trees 
C)  waiting line models 
D)  economies of scale

Question 11

The base case concept is to do nothing and simply lose orders from any demand that exceeds current capacity.

Accepted Answer

A) True 
 B)False

Question 12

Waiting line models are often used for capacity planning.

Accepted Answer

A) True 
 B)False

Question 13

Output measures are the usual choice for high- volume processes that produce only a limited range of similar products or services, usually expressed in terms of output over a period of time.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is NOT a disadvantage of the wait- and- see strategy?

Accepted Answer

A)  being unable to respond if demand is unexpectedly high 
B)  can erode market share over the long run 
C)  can be preempted by a competitor 
D)  increased risk of over expansion 
A)  being unable to respond if demand is unexpectedly high 
B)  can erode market share over the long run 
C)  can be preempted by a competitor 
D)  increased risk of over expansion

Question 15

In an automobile service business (e.g. a muffler shop), measuring capacity based on the number of hours that the service bays will be required to satisfy expected demand is an example of an input measure of capacity.

Accepted Answer

A) True 
 B)False

Question 16

The ______  strategy refers to a condition which involves large, infrequent jumps in capacity.

Accepted Answer

The answer of The ______  strategy refers to a...

Question 17

Which one of the following statements concerning capacity cushions is best?

Accepted Answer

A)  Capacity cushions are used primarily in manufacturing organizations, not in service organizations. 
B)  Large- capacity cushions are utilized more often when future demand is level and known. 
C)  Small cushions are used in organizations where the products and services produced often change. 
D)  Small- capacity cushions are used extensively in capital- intensive firms. 
A)  Capacity cushions are used primarily in manufacturing organizations, not in service organizations. 
B)  Large- capacity cushions are utilized more often when future demand is level and known. 
C)  Small cushions are used in organizations where the products and services produced often change. 
D)  Small- capacity cushions are used extensively in capital- intensive firms.

Question 18

According to the theory of constraints (TOC), the role of work- in- process inventory is to dictate the pace that specific items are pulled through the process.

Accepted Answer

A) True 
 B)False

Question 19

Increasing the amount of work- in- process inventory reduces the likelihood that operations in the process will be starved.

Accepted Answer

A) True 
 B)False

Question 20

If demand is increasing, and you also prefer to increase the time between capacity increments, then the size of increments should ______ .

Accepted Answer

The answer of If demand is increasing, and you also...

If customer demand exceeds process capacity, every operation with capacity utilization greater than 100 percent is an external bottleneck.

Which of the following descriptions about waiting line models is best?

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.

Capacity gap is an addition to projected demand and current capacity.

Within a process, what is a bottleneck?

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

The ______ time is the time required to change an operation from making one type of product or service to making another.

What information would managers use to choose the best cost- effective capacity to balance customer service with the cost of adding capacity?

The base case concept is to do nothing and simply lose orders from any demand that exceeds current capacity.

Waiting line models are often used for capacity planning.

Output measures are the usual choice for high- volume processes that produce only a limited range of similar products or services, usually expressed in terms of output over a period of time.

Which of the following is NOT a disadvantage of the wait- and- see strategy?

In an automobile service business (e.g. a muffler shop), measuring capacity based on the number of hours that the service bays will be required to satisfy expected demand is an example of an input measure of capacity.

The ______ strategy refers to a condition which involves large, infrequent jumps in capacity.

Which one of the following statements concerning capacity cushions is best?

According to the theory of constraints (TOC), the role of work- in- process inventory is to dictate the pace that specific items are pulled through the process.

Increasing the amount of work- in- process inventory reduces the likelihood that operations in the process will be starved.

If demand is increasing, and you also prefer to increase the time between capacity increments, then the size of increments should ______ .

Creating Customer Value

Supply Chain Management

Supply Chain Sustainability and Humanitarian Logistics

Process Configuration

Waiting Lines

Inventory Management

Quality and Process Improvement

Lean Systems

Location and Layout

Managing Demand and Forecasting

Operations Planning and Scheduling

Resource Planning

Filters

Exam 5: Capacity

If customer demand exceeds process capacity, every operation with capacity utilization greater than 100 percent is an external bottleneck.

Which of the following descriptions about waiting line models is best?

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.

Capacity gap is an addition to projected demand and current capacity.

Within a process, what is a bottleneck?

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

The ______ time is the time required to change an operation from making one type of product or service to making another.

What information would managers use to choose the best cost- effective capacity to balance customer service with the cost of adding capacity?

The base case concept is to do nothing and simply lose orders from any demand that exceeds current capacity.

Waiting line models are often used for capacity planning.

Output measures are the usual choice for high- volume processes that produce only a limited range of similar products or services, usually expressed in terms of output over a period of time.

Which of the following is NOT a disadvantage of the wait- and- see strategy?

In an automobile service business (e.g. a muffler shop), measuring capacity based on the number of hours that the service bays will be required to satisfy expected demand is an example of an input measure of capacity.

The ______ strategy refers to a condition which involves large, infrequent jumps in capacity.

Which one of the following statements concerning capacity cushions is best?

According to the theory of constraints (TOC), the role of work- in- process inventory is to dictate the pace that specific items are pulled through the process.

Increasing the amount of work- in- process inventory reduces the likelihood that operations in the process will be starved.

If demand is increasing, and you also prefer to increase the time between capacity increments, then the size of increments should ______ .

Creating Customer Value

Supply Chain Management

Supply Chain Sustainability and Humanitarian Logistics

Process Configuration

Waiting Lines

Inventory Management

Quality and Process Improvement

Lean Systems

Location and Layout

Managing Demand and Forecasting

Operations Planning and Scheduling

Resource Planning

Filters

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