Exam 5: Strategic Capacity Management

Maximum practical capacity is defined by the federal Bureau of Economic Analysis as "That output attained within the normal operating schedule of shifts per day and days per week including the use of high-cost inefficient facilities".

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.

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 experience curve is states that the more experience you have in a particular activity,the less surprised you will be when something goes wrong.

Low rates of capacity utilization in service organizations are never appropriate.

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

Economies of scope exist when multiple products can be produced at a lower cost in combination than they can separately.

Maximum practical capacity is defined by the federal Bureau of Economic Analysis as "That output obtained within the normal operating schedule of shifts per day and days per week excluding the use of high-cost and inefficient facilities".

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

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

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

Firms that make multiple products can produce the same number of each product with a given level of resource inputs and equal amounts of time.

What is a capacity cushion and why would a firm have one?

The ultimate in plant flexibility is a one-hour-changeover time plant.

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?

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

The PWP concept permits finding the best operating level for each department of the organization and thereby carries the focus concept down to the operating level.

Sharing capacity is a common source of external capacity.

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 4,500 units per week,how many similar machines might you plan to acquire?

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.