Question 1

Which of the following is not a criterion for developing capacity alternatives?

Accepted Answer

A) design structured, rigid systems 
B) take a big-picture approach to capacity changes 
C) prepare to deal with capacity in "chunks" 
D) attempt to smooth out capacity requirements 
E) identify the optimal operating level 
A) design structured, rigid systems 
B) take a big-picture approach to capacity changes 
C) prepare to deal with capacity in "chunks" 
D) attempt to smooth out capacity requirements 
E) identify the optimal operating level

Question 2

For fixed costs of $2,000, revenue per unit of $2, and variable cost per unit of $1.60, the break-even quantity is:

Accepted Answer

A) 1,000 
B) 1,250 
C) 2,250 
D) 5,000 
E) none of these 
A) 1,000 
B) 1,250 
C) 2,250 
D) 5,000 
E) none of these

Question 3

Which of the following makes using present value approaches in capacity decisions difficult?

Accepted Answer

A) The discount rate must be adjusted to account for inflation. 
B) Some cash flows are positive and other cash flows are negative. 
C) The payback period might not be long enough to justify a capacity decision. 
D) Capacity decisions are made amidst much uncertainty, so cash flows cannot be estimated with great accuracy. 
E) None of the above. 
A) The discount rate must be adjusted to account for inflation. 
B) Some cash flows are positive and other cash flows are negative. 
C) The payback period might not be long enough to justify a capacity decision. 
D) Capacity decisions are made amidst much uncertainty, so cash flows cannot be estimated with great accuracy. 
E) None of the above.

Question 4

What would the profit be if she were to produce and sell 5,000 rosebushes?

Accepted Answer

A) $0 
B) $9,000 
C) $15,000 
D) $10,000 
E) $30,000 
A) $0 
B) $9,000 
C) $15,000 
D) $10,000 
E) $30,000

Question 5

Maximum capacity refers to the upper limit of:

Accepted Answer

A) inventories 
B) demand 
C) supplies 
D) rate of output 
E) finances 
A) inventories 
B) demand 
C) supplies 
D) rate of output 
E) finances

Question 6

If her available land has design and effective capacities of 3,000 and 2,000 rosebushes per year respectively, and she plans to grow 1,200 rosebushes each year on this land, what will be the utilization of this land?

Accepted Answer

A) 0% 
B) 40% 
C) 60% 
D) 67% 
E) 100% 
A) 0% 
B) 40% 
C) 60% 
D) 67% 
E) 100%

Question 7

When the output is less than the optimal rate of output, the average unit cost will be:

Accepted Answer

A) lower 
B) the same 
C) higher 
D) could be either higher or lower 
E) could be either higher, lower or the same 
A) lower 
B) the same 
C) higher 
D) could be either higher or lower 
E) could be either higher, lower or the same

Question 8

Efficiency is defined as the ratio of:

Accepted Answer

A) actual output to effective capacity 
B) actual output to design capacity 
C) design capacity to effective capacity 
D) effective capacity to actual output 
E) design capacity to actual output 
A) actual output to effective capacity 
B) actual output to design capacity 
C) design capacity to effective capacity 
D) effective capacity to actual output 
E) design capacity to actual output

Question 9

The term capacity refers to the maximum quantity an operating unit can process over a given period of time.

Accepted Answer

A) True 
 B)False

Question 10

Increasing productivity and also quality will result in increased capacity.

Accepted Answer

A) True 
 B)False

Question 11

Which alternative would you select for a quantity of 24,000 units per year?

Accepted Answer

The answer of Which alternative would you select for a...

Question 12

An example of an external factor that influences effective capacity is government safety regulations.

Accepted Answer

A) True 
 B)False

Question 13

Waiting line analysis can be useful for capacity design, especially for service systems.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is the case where capacity is measured in terms of inputs?

Accepted Answer

A) hospital 
B) theater 
C) restaurant 
D) all of the above 
E) none of the above 
A) hospital 
B) theater 
C) restaurant 
D) all of the above 
E) none of the above

Question 15

Stating capacity in dollar amounts generally results in a consistent measure of capacity regardless of the actual units of measure.

Accepted Answer

A) True 
 B)False

Question 16

If this new blood analysis machine has design and effective capacities of 6,000 and 5,000 blood analyses per year, respectively, and Dr.J.expects to be 80% efficient in his use of this machine, how many HIV blood analyses does he plan to perform each year?

Accepted Answer

A) 3,200 
B) 4,800 
C) 4,000 
D) 1,000 
E) 5,000 
A) 3,200 
B) 4,800 
C) 4,000 
D) 1,000 
E) 5,000

Question 17

If the unit cost to buy something is less than the variable cost to make it, the decision to make or buy is based solely on the fixed costs.

Accepted Answer

A) True 
 B)False

Question 18

What is the break-even quantity for the following situation? FC = $1,200 per week
VC = $2 per unit
Rev = $6 per unit

Accepted Answer

A) 100 
B) 200 
C) 600 
D) 1,200 
E) 300 
A) 100 
B) 200 
C) 600 
D) 1,200 
E) 300

Question 19

The efficiency of a productive unit is 60%.The unit produces an average of 20 forklift trucks per day.Determine the effective capacity of the unit.

Accepted Answer

The answer of The efficiency of a productive unit is...

Question 20

For what range of output would you prefer to make?

Accepted Answer

The answer of For what range of output would you...

Exam 5: Strategic Capacity Planning for Products and Services

Which of the following is not a criterion for developing capacity alternatives?

For fixed costs of $2,000, revenue per unit of $2, and variable cost per unit of $1.60, the break-even quantity is:

Which of the following makes using present value approaches in capacity decisions difficult?

What would the profit be if she were to produce and sell 5,000 rosebushes?

Maximum capacity refers to the upper limit of:

If her available land has design and effective capacities of 3,000 and 2,000 rosebushes per year respectively, and she plans to grow 1,200 rosebushes each year on this land, what will be the utilization of this land?

When the output is less than the optimal rate of output, the average unit cost will be:

Efficiency is defined as the ratio of:

The term capacity refers to the maximum quantity an operating unit can process over a given period of time.

Increasing productivity and also quality will result in increased capacity.

Which alternative would you select for a quantity of 24,000 units per year?

An example of an external factor that influences effective capacity is government safety regulations.

Waiting line analysis can be useful for capacity design, especially for service systems.

Which of the following is the case where capacity is measured in terms of inputs?

Stating capacity in dollar amounts generally results in a consistent measure of capacity regardless of the actual units of measure.

If this new blood analysis machine has design and effective capacities of 6,000 and 5,000 blood analyses per year, respectively, and Dr.J.expects to be 80% efficient in his use of this machine, how many HIV blood analyses does he plan to perform each year?

If the unit cost to buy something is less than the variable cost to make it, the decision to make or buy is based solely on the fixed costs.

What is the break-even quantity for the following situation? FC = $1,200 per week VC = $2 per unit Rev = $6 per unit

The efficiency of a productive unit is 60%.The unit produces an average of 20 forklift trucks per day.Determine the effective capacity of the unit.

For what range of output would you prefer to make?

Introduction to Operations Management

Competitiveness, Strategy, and Productivity

Forecasting

Product and Service Design

Process Selection and Facility Layout

Work Design and Measurement

Location Planning and Analysis

Management of Quality

Quality Control

Aggregate Planning and Master Scheduling

MRP and ERP

Inventory Management

Jit and Lean Operations

Supply Chain Management

Scheduling

Project Management

Management of Waiting Lines

Linear Programming

Extension 4: Reliability

Extension 5: Decision Theory

Extension 7: Learning Curves

Extension 8: The Transportation Model

Extension 10: Acceptance Sampling

Extension 14: Maintenance

Filters