Exam 4: Strategic Capacity Management

The objective of strategic capacity planning is to determine the overall capacity level of capital intensive resources (including facilities, equipment, and overall labor force size) that best supports the company's long-range competitive strategy.

The ability to rapidly and inexpensively switch production from one product to another enables what are sometimes referred to as:

When a firm's design capacity is less than the capacity required to meet its demand, it is said to have a negative capacity cushion.

Why does volatility of demand have a higher effect on a service delivery system than on a manufacturing system?

Capacity can be defined as the ability to hold, receive, store, or accommodate.

Which of the following is not a step used in determining production capacity requirements?

Best operating level is usually a multiple of the level of capacity for which a process was designed.

If demand for product "A" were forecast at 1,000,000 units for the coming year and your factory has one machine capable of producing 75,000 units per month, how much of product "A" might you plan to acquire through outsourcing?

The capacity utilization rate is found by dividing best operating level by capacity used.

At some point, the size of a growing plant can become too large and diseconomies of scale become a capacity planning problem.

If the best operating level of a piece of equipment is at a rate of 400 units per hour and the actual output during an hour is 300 units, which of the following is the capacity utilization rate?

A chance node on a decision tree has four possible outcomes worth $10,000, $20,000, $30,000 and minus $100,000 respectively.The probabilities of these outcomes occurring are assessed as 10%, 25%, 50% and 15% correspondingly.What is the expected value of this chance node?

The way to build in greater flexibility in your workers is to do which of the following?

A production facility works best when it focuses on a fairly limited set of production objectives.

Capacity planning involving hiring, layoffs, some new tooling, minor equipment purchases, and subcontracting is considered as which one of the following planning horizons?

Capacity planning involving consideration of production scheduling and inventory position is characterized by which one of the following time durations?

The objective of strategic capacity planning is to determine the overall capacity level of capital intensive resources (including facilities, equipment, and overall labor force size) that best supports the company's short-range competitive strategy.

Capacity flexibility means having the ability to rapidly increase or decrease production levels, or to shift production capacity quickly from one product or service to another.

The frequency of additions to productive capacity should balance the costs of upgrading too frequently and the costs of upgrading too infrequently.

Capacity can be defined as the amount of available resource inputs relative to requirements for output over a particular period of time.