Exam 5: Strategic Capacity Management

The frequency of additions to productive capacity should balance the costs of upgrading too frequently and the costs of upgrading too infrequently.

If demand for product "A" were forecast at 1,000,000 units for the coming year and your factory has trained labor and equipment sufficient to produce 150,000 units per month is the capacity cushion positive or negative?

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 your customer or your competitor.

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 75,000 units per month,how much of product "A" might you plan to acquire through outsourcing?

The point at which the scale economy curve and the experience curve intersect is called the capacity optimum.

A capacity cushion is the amount of capacity less than expected demand.

The way to build greater flexibility in your workers is to do which of the following?

A decision tree problem does not need probabilities or payoffs to generate a solution.

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.

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

When plotted on a graph,the experience curve can't be expressed as logarithm.

Subcontracting is a common source of external capacity.