Exam 5: Strategic Capacity Planning for Products and Services

An alternative will have fixed costs of $10,000 per month, variable costs of $50 per unit, and revenue of $70 per unit. The break-even point volume is:

Consider the following information: Fixed Costs: \ 15,000 per year Variable Costs: \ 1.00 per unit Revenue: \ 1.60 per unit Design Capacity: 45,000 units per year Effective Capacity: 40,000 units per year Anticipated Output: 36,000 units per year What is the anticipated efficiency?

Improving cash flow would be a reasonable thing to focus on when trying to overcome a _________ constraint.

The impact that a significant change in capacity will have on a key vendor is a:

The owner of a greenhouse and nursery is considering whether to spend $6,000 to acquire the licensing rights to grow a new variety of rosebush, which she could then sell for $6 each. Per-unit variable cost would be $3. What would the profit be if she were to produce and sell 5,000 rosebushes?

A firm is considering three capacity alternatives: A, B, and C. Alternative A would have an annual fixed cost of $100,000 and variable costs of $22 per unit. Alternative B would have annual fixed costs of $120,000 and variable costs of $20 per unit. Alternative C would have fixed costs of $80,000 and variable costs of $30 per unit. Revenue is expected to be $50 per unit. (A) Which alternative has the lowest break-even quantity? (B) Which alternative will produce the highest profits for an annual output of 10,000 units? (C) Which alternative would require the lowest volume of output to generate an annual profit of $50,000?

A Virginia county is considering whether to pay $50,000 per year to lease a prisoner transfer facility in a prime location near Washington,

Given the following data for a make-or-buy decision: Alternative Fixed Cost Variable Cost Buy \ 0 per year \ 8 per unit Make \ 100,000 per year \ 4 per unit What would be your total costs for the preferred alternative, for 32,000 units per year?

Consider the following information: Fixed Costs: \ 15,000 per year Variable Costs: \ 1.00 per unit Revenue: \ 1.60 per unit Design Capacity: 45,000 units per year Effective Capacity: 40,000 units per year Anticipated Output: 36,000 units per year What profit (loss) would there be for a quantity of 27,000?

Which of the following is not a determinant of effective capacity?

A Virginia county is considering whether to pay $50,000 per year to lease a prisoner transfer facility in a prime location near Washington,

The owner of a greenhouse and nursery is considering whether to spend $6,000 to acquire the licensing rights to grow a new variety of rosebush, which she could then sell for $6 each. Per-unit variable cost would be $3. If her available land has design and effective capacities of 3,000 and 2,000 rosebushes per year, respectively, and she expects to be 80 percent efficient in her use of this land, how many rosebushes does Rose plan to grow each year on this land?

Given the following data for a make-or-buy decision: Alternative Fixed Cost Variable Cost Buy \ 0 per year \ 8 per unit Make \ 100,000 per year \ 4 per unit Which alternative would you select for a quantity of 24,000 units per year?

The ratio of actual output to design capacity is:

Outsourcing some production is a means of supporting a constraint.

Consider the following information: Fixed Costs: \ 15,000 per year Variable Costs: \ 1.00 per unit Revenue: \ 1.60 per unit Design Capacity: 45,000 units per year Effective Capacity: 40,000 units per year Anticipated Output: 36,000 units per year What is the anticipated utilization?

Students at a major university must go through several registration steps. Officials have observed that it is typically the case that the waiting line at the fee-payment station is the longest. This would seem to suggest that the fee-payment station is the ___________ in the student registration process.

Doctor J. is considering purchasing a new blood analysis machine to test for HIV; it will cost $60,000. He estimates that he could charge $25.00 for an office visit to have a patient's blood analyzed, while the actual cost of a blood analysis would be $5.00. What would be his profit if he were to perform 5,000 HIV blood analyses?

Utilization is defined as the ratio of:

The ratio of actual output to effective capacity is: