Exam 4: Strategic Capacity Management

In a decision tree,the only time probabilities are applied to a decision node is when the decision is being made by someone else such as you customer or your competitor.

Outsourcing is a common source of external capacity.

In practice achieving a perfectly balanced plant is usually both impossible and undesirable.

If the actual output of a piece of equipment during an hour is 500 units and its best operating level is at a rate of 400 units per hour,which of the following is the capacity utilization rate?

production facility develops virtuosity and works best when it focused on a widely varied set of production objectives.

Because services cannot be stored for later use,service managers consider time as one of their supplies or resources.

When evaluating capacity,managers need to consider both resource inputs and product outputs.

The capacity focus concept can be put into practice through a mechanism called which of the following?

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

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.

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?

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

Sharing capacity is a common source of external capacity.

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.

When deciding to add capacity to a factory which of the following need not be considered?

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

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

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

The basic notion of economies of scale is that as a plant gets larger and volume increases,the average cost per unit of output drops.

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