Question 1

Random variation is introduced by chance and results from small changes or differences in equipment operations, people's behaviour, or environmental conditions.

Accepted Answer

A) True 
 B)False

Question 2

Table 5.2
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.

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 5.2, what is the maximum number of machines needed (assuming no reliance on short- term option)?

Accepted Answer

A)  less than or equal to 25 
B)  more than 25 but less than or equal to 28 
C)  more than 28 but less than or equal to 31 
D)  more than 31 
A)  less than or equal to 25 
B)  more than 25 but less than or equal to 28 
C)  more than 28 but less than or equal to 31 
D)  more than 31

Question 3

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

Accepted Answer

The answer of ______ is the degree to which equipment,...

Question 4

A decision tree is a schematic model of alternatives available to the decision maker, along with their possible consequences.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

The first step in the application of the Theory of Constraints (TOC) is to identify the bottlenecks.

Accepted Answer

A) True 
 B)False

Question 7

In a manufacturing company, measuring capacity based on the number of machine- hours required to process a specific batch of production is an example of an output measure of capacity.

Accepted Answer

A) True 
 B)False

Question 8

An expansionist strategy in regard to capacity is best characterized by

Accepted Answer

A)  reducing the risks of overly optimistic demand forecasts. 
B)  emphasizing flexibility and quality while foregoing the larger market share of the lowest- cost producers. 
C)  using capacity to increase a firm's market share or to act as a form of preemptive market. 
D)  expanding only when others do. 
A)  reducing the risks of overly optimistic demand forecasts. 
B)  emphasizing flexibility and quality while foregoing the larger market share of the lowest- cost producers. 
C)  using capacity to increase a firm's market share or to act as a form of preemptive market. 
D)  expanding only when others do.

Question 9

What factors should be considered when selecting the appropriate capacity cushion? How does the choice of capacity cushion relate to other decisions in operations management? To other functional areas?

Accepted Answer

The appropriate size of the capacity cus

Question 10

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

Accepted Answer

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

Question 11

Give four principal reasons why economies of scale can occur when output increases.

Accepted Answer

The four reasons are spreading

Question 12

The maximum output that can reasonably be sustained under normal conditions is the capacity cushion for a process.

Accepted Answer

A) True 
 B)False

Question 13

Many alternative strategies are available for the timing and sizing decision in capacity expansion. Which one of the following statements regarding these strategies is best?

Accepted Answer

A)  The expansionist strategy makes large, frequent jumps. 
B)  The expansionist strategy involves large, infrequent jumps in capacity. 
C)  Lost sales are more likely when the expansionist strategy is adopted. 
D)  The wait- and- see strategy makes large, infrequent jumps. 
A)  The expansionist strategy makes large, frequent jumps. 
B)  The expansionist strategy involves large, infrequent jumps in capacity. 
C)  Lost sales are more likely when the expansionist strategy is adopted. 
D)  The wait- and- see strategy makes large, infrequent jumps.

Question 14

If a system is well balanced, which one of the following changes usually calls for a larger- capacity cushion?

Accepted Answer

A)  higher worker flexibility 
B)  requests for fast delivery times 
C)  higher inventories 
D)  higher capital intensity 
A)  higher worker flexibility 
B)  requests for fast delivery times 
C)  higher inventories 
D)  higher capital intensity

Question 15

Musk L. Flexor owns a hot tub store that is experiencing significant growth. Flexor is trying to decide whether to expand its capacity, which currently is at $750,000 in sales per quarter. He is thinking about expanding to the $850,000 level. The before- tax profit from additional sales is 20 percent. Sales are seasonal, with peaks in the spring and summer quarters. Forecasts of capacity requirements, expressed in sales per quarter, for next year (year 2) are:
 
 Demand in year 3 and beyond is expected to exceed $850,000 per quarter. Flexor is considering expansion at the end of the fourth quarter of this year (year 1). How much would before- tax profits in year 2 increase because of this expansion?

Accepted Answer

A)  less than $28,000 
B)  more than $28,000 but less than $32,000 
C)  more than $32,000 but less than $36,000 
D)  more than $36,000 
A)  less than $28,000 
B)  more than $28,000 but less than $32,000 
C)  more than $32,000 but less than $36,000 
D)  more than $36,000

Question 16

Larry's Wickets, Inc. is producing two types of products: A and B. Both are produced at the same machining 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.  
  The machines operate on two 8- hour shifts, 5 days per week, and 50 weeks per year. The manager wants to maintain a 20 percent capacity cushion.
a. What is the minimum number of hours required of the machining equipment for the next year?
b. How many hours of capacity can the company expect from each machine?
c. What is the minimum number of machines needed (assuming no reliance on short- term options)?
d. What is the maximum number of machines needed (assuming no reliance on short- term options)?

Accepted Answer

@#IMG-DLM&
 Scenarios that can be met wi

Question 17

Table 5.2
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.

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 5.2, 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 18

Diseconomies of scale refers to situations where the average cost per unit decreases as the facility's size increases.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A)  Return of investment is about the same for capital- intensive firms, regardless of their capacity cushions. 
B)  Large capacity cushions are more likely to be utilized when future demand is known. 
C)  Small cushions are used when the product mix often changes. 
D)  The best- sized cushion varies by industry and firm. 
A)  Return of investment is about the same for capital- intensive firms, regardless of their capacity cushions. 
B)  Large capacity cushions are more likely to be utilized when future demand is known. 
C)  Small cushions are used when the product mix often changes. 
D)  The best- sized cushion varies by industry and firm.

Question 20

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...

Random variation is introduced by chance and results from small changes or differences in equipment operations, people's behaviour, or environmental conditions.

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

A decision tree is a schematic model of alternatives available to the decision maker, along with their possible consequences.

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

The first step in the application of the Theory of Constraints (TOC) is to identify the bottlenecks.

In a manufacturing company, measuring capacity based on the number of machine- hours required to process a specific batch of production is an example of an output measure of capacity.

An expansionist strategy in regard to capacity is best characterized by

What factors should be considered when selecting the appropriate capacity cushion? How does the choice of capacity cushion relate to other decisions in operations management? To other functional areas?

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

Give four principal reasons why economies of scale can occur when output increases.

The maximum output that can reasonably be sustained under normal conditions is the capacity cushion for a process.

Many alternative strategies are available for the timing and sizing decision in capacity expansion. Which one of the following statements regarding these strategies is best?

If a system is well balanced, which one of the following changes usually calls for a larger- capacity cushion?

Diseconomies of scale refers to situations where the average cost per unit decreases as the facility's size increases.

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

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

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

Random variation is introduced by chance and results from small changes or differences in equipment operations, people's behaviour, or environmental conditions.

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

A decision tree is a schematic model of alternatives available to the decision maker, along with their possible consequences.

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

The first step in the application of the Theory of Constraints (TOC) is to identify the bottlenecks.

In a manufacturing company, measuring capacity based on the number of machine- hours required to process a specific batch of production is an example of an output measure of capacity.

An expansionist strategy in regard to capacity is best characterized by

What factors should be considered when selecting the appropriate capacity cushion? How does the choice of capacity cushion relate to other decisions in operations management? To other functional areas?

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

Give four principal reasons why economies of scale can occur when output increases.

The maximum output that can reasonably be sustained under normal conditions is the capacity cushion for a process.

Many alternative strategies are available for the timing and sizing decision in capacity expansion. Which one of the following statements regarding these strategies is best?

If a system is well balanced, which one of the following changes usually calls for a larger- capacity cushion?

Diseconomies of scale refers to situations where the average cost per unit decreases as the facility's size increases.

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

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

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