Exam 5: Strategic Capacity Management

Capacity planning involving acquisition or disposal of fixed assets such as buildings, equipment or facilities is considered as which one of the following planning horizons?

In decision tree analysis, the time value of money is ignored because the only concern is with cash costs.

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.

Capacity is always expressed in terms of units of output per period of time.

In designing a general service facility, capacity should be such that the target rate of service utilization (ρ), in order to get the best general purpose design, should be

A plant within a plant is when two (or more) companies have production facilities within the same building. In other words, they co-locate.

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?

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

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.

In practice, achieving a perfectly balanced plant is usually desirable but impossible.

What is an important difference between capacity planning in services and capacity planning in manufacturing operations?

Best operating level is the volume of output at which average unit cost is minimized.

The problem of keeping demand sufficiently high to keep a large factory busy is a sales issue and not a diseconomy of scale.

Capacity planning is generally viewed in three time durations: immediate, intermediate, and indeterminate.

The time duration in which capacity planning is for less than one month is?

Compared with a service operation, a manufacturing operation's capacity is which of the following?

Sharing capacity is a common source of external capacity.

The measure of how close the firm's current output rate is to its best operating level (percent) is?

Finding the overall capacity level of capital-intensive resources to best support the firm's long-term strategy is?

The probability of each occurrence at a decision tree chance node is the reciprocal of the number of possibilities at the chance node.