Question 1

Describe the fundamental logic of the theory of constraints (TOC).

Accepted Answer

The theory of constraints (TOC) is an ap

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

The total time that a typical item spends in any process, termed ______  time, increases as the average level of inventor in that process increases.

Accepted Answer

The answer of The total time that a typical item...

Question 4

According to the theory of constraints (TOC), the drum in the drum- buffer- rope method refers to the bottleneck of the process.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

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

Question 6

Up, Up & Away is a producer of kites and windsocks. Relevant data concerning their production for the upcoming fiscal year are as follows:   Assume: 1 shift/day, 8 hours/shift, 5 days/week, and 50 weeks/year. 
There currently are four machines, and management wants a capacity cushion of 20 percent.
Which of the following alternatives will enable Up, Up & Away to meet all of the upcoming year's demand using the minimum number of machines?

Accepted Answer

A)  add six additional machines 
B)  add five additional machines 
C)  add four additional machines 
D)  add three additional machines 
A)  add six additional machines 
B)  add five additional machines 
C)  add four additional machines 
D)  add three additional machines

Question 7

As the total output increases, economies of scale lower costs because the total fixed costs required to produce the higher volume of output are lowered.

Accepted Answer

A) True 
 B)False

Question 8

The Northern Manufacturing Company is producing two types of products: A and B. Demand forecasts for next year and other production- related information are provided in the following table: 
$$\begin{array} { l | c | c } 
& \text { Product A } & \text { Product B } \
\hline \text { Demand forecast (units/yr) } & 4000 & 12000 \
\text { Batch size (units/batch) } & 80 & 150 \
\text { Standard processing time (hr/unit) } & 25 & 2.0 \
\text { Standard setup time (hr/batch } & 18 & 24
\end{array}$$
Both of these products are produced at the same workstation, called the Automatic Lathe. Currently, the company has 12 automatic lathes, and financial constraints prevent any expansion for the next year. It works 250 days per year with two 8- hour shifts and desires a 25 percent capacity cushion. Which one of the following alternatives will allow next year's demand to be fully covered?

Accepted Answer

A)  Decrease the capacity cushion by 1 percent. 
B)  Increase the capacity cushion to 30 percent. 
C)  Increase the batch size of product B to 300 units. 
D)  Do nothing. 
A)  Decrease the capacity cushion by 1 percent. 
B)  Increase the capacity cushion to 30 percent. 
C)  Increase the batch size of product B to 300 units. 
D)  Do nothing.

Question 9

______ capacity is the maximum output that a process or firm can economically sustain under normal conditions.

Accepted Answer

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

Question 10

The setup time required to switch from one product type to another within a manufacturing process is an example of an external, predictable from of variability.

Accepted Answer

A) True 
 B)False

Question 11

Explain the distinction between input and output measures of capacity.

Accepted Answer

Input measures are the usual choice for

Question 12

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

Accepted Answer

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

Question 13

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

Accepted Answer

A)  The follow- the- leader strategy can help a firm gain a competitive advantage. 
B)  The expansionist strategy minimizes risk. 
C)  The wait- and- see strategy involves small jumps in capacity compared to the expansionist strategy. 
D)  The expansionist strategy involves frequent jumps in capacity compared to the wait- and- see strategy. 
A)  The follow- the- leader strategy can help a firm gain a competitive advantage. 
B)  The expansionist strategy minimizes risk. 
C)  The wait- and- see strategy involves small jumps in capacity compared to the expansionist strategy. 
D)  The expansionist strategy involves frequent jumps in capacity compared to the wait- and- see strategy.

Question 14

Input measures are generally used as a capacity measure for high- volume processes.

Accepted Answer

A) True 
 B)False

Question 15

What is a waiting line model, and what information can it provide?

Accepted Answer

Waiting line models use probab

Question 16

Two factors favor an expansionist strategy in capacity decisions: expansion may help achieve ______ of scale, and it may also ______  the learning rate.

Accepted Answer

The answer of Two factors favor an expansionist strategy in...

Question 17

One reason why economies of scale drive down cost is the spreading of fixed costs.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

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

Question 19

______ is the maximum rate of output for a process.

Accepted Answer

The answer of ______ is the maximum rate of output...

Question 20

Table $5.4$
Mr. Lee is considering a capacity expansion for his supermarket. The annual sales projected for the next five years follow. The current capacity is equivalent to $\$ 300,000$ sales. Assume a 20 percent pretax profit margin.

-Using the information in Table 5.4, if Lee expands the capacity to an equivalent of $360,000 sales now (year 0), how much would pretax cash flow in year 1 increase because of this expansion?

Accepted Answer

A)  less than $3000 
B)  more than $3000 but less than $5000 
C)  more than $5000 but less than $7000 
D)  more than $7000 
A)  less than $3000 
B)  more than $3000 but less than $5000 
C)  more than $5000 but less than $7000 
D)  more than $7000

Describe the fundamental logic of the theory of constraints (TOC).

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

The total time that a typical item spends in any process, termed ______ time, increases as the average level of inventor in that process increases.

According to the theory of constraints (TOC), the drum in the drum- buffer- rope method refers to the bottleneck of the process.

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

As the total output increases, economies of scale lower costs because the total fixed costs required to produce the higher volume of output are lowered.

______ capacity is the maximum output that a process or firm can economically sustain under normal conditions.

The setup time required to switch from one product type to another within a manufacturing process is an example of an external, predictable from of variability.

Explain the distinction between input and output measures of capacity.

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

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

Input measures are generally used as a capacity measure for high- volume processes.

What is a waiting line model, and what information can it provide?

Two factors favor an expansionist strategy in capacity decisions: expansion may help achieve of scale, and it may also the learning rate.

One reason why economies of scale drive down cost is the spreading of fixed costs.

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

______ is the maximum rate of output for a process.

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

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Exam 5: Capacity

Describe the fundamental logic of the theory of constraints (TOC).

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

The total time that a typical item spends in any process, termed ______ time, increases as the average level of inventor in that process increases.

According to the theory of constraints (TOC), the drum in the drum- buffer- rope method refers to the bottleneck of the process.

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

As the total output increases, economies of scale lower costs because the total fixed costs required to produce the higher volume of output are lowered.

______ capacity is the maximum output that a process or firm can economically sustain under normal conditions.

The setup time required to switch from one product type to another within a manufacturing process is an example of an external, predictable from of variability.

Explain the distinction between input and output measures of capacity.

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

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

Input measures are generally used as a capacity measure for high- volume processes.

What is a waiting line model, and what information can it provide?

Two factors favor an expansionist strategy in capacity decisions: expansion may help achieve ______ of scale, and it may also ______ the learning rate.

One reason why economies of scale drive down cost is the spreading of fixed costs.

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

______ is the maximum rate of output for a process.

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

Two factors favor an expansionist strategy in capacity decisions: expansion may help achieve of scale, and it may also the learning rate.