Exam 4: Strategic Capacity Management

A piece of equipment with twice the capacity of another piece typically costs twice as much to purchase and to operate.

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 cushion?

The smaller the capacity cushion the better.

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

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,what is the capacity utilization rate? ____________________

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? ___________________

Compared with a service operation,a manufacturing operation's capacity is which of the following?

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? _______________

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

Long-range capacity planning requires top management participation.

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

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

Making adjustments to eliminate the variance between planned and actual output is tied into intermediate range capacity planning.

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

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 capacity cushion is the ratio of capacity used to the best capacity level.

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

Capacity can be defined as the ability to hold,receive,store,or accommodate.

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

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.