Question 1

An organization whose capacity is on that portion of the average unit cost curve that falls as output rises:

Accepted Answer

A) has a facility that is below optimum operating level and should build a larger facility. 
B) has a facility that is above optimum operating level and should reduce facility size. 
C) is suffering from diseconomies of scale. 
D) has utilization higher than efficiency. 
E) has expected output higher than rated capacity. 
A) has a facility that is below optimum operating level and should build a larger facility. 
B) has a facility that is above optimum operating level and should reduce facility size. 
C) is suffering from diseconomies of scale. 
D) has utilization higher than efficiency. 
E) has expected output higher than rated capacity.

Question 2

Break-even analysis can be used by a firm that produces more than one product,but:

Accepted Answer

A) the results are estimates,not exact values. 
B) the firm must allocate some fixed cost to each of the products. 
C) each product has its own break-even point. 
D) the break-even point depends upon the proportion of sales generated by each of the products. 
E) None of these statements is true. 
A) the results are estimates,not exact values. 
B) the firm must allocate some fixed cost to each of the products. 
C) each product has its own break-even point. 
D) the break-even point depends upon the proportion of sales generated by each of the products. 
E) None of these statements is true.

Question 3

A retailer is considering building a large store.If the local economy experiences expansion,the firm expects the store to earn a $2,000,000 profit next year.If the local economy experiences a contraction,the firm expects the store to lose $400,000 next year.Analysts estimate a 20% chance for the local economy to experience an expansion next year (hence an 80% chance for contraction).What is the expected monetary value (EMV)of building the large store?

Accepted Answer

A) $1,600,000 
B) $720,000 
C) $2,000,000 
D) $80,000 
E) $1,520,000 
A) $1,600,000 
B) $720,000 
C) $2,000,000 
D) $80,000 
E) $1,520,000

Question 4

The bottleneck time is always at least as long as the throughput time.

Accepted Answer

A) True 
 B)False

Question 5

Christopher's Cranks uses a machine that can produce 100 cranks per hour.The firm operates 12 hours per day,five days per week.Due to regularly scheduled preventive maintenance,the firm expects the machine to be running during approximately 95% of the available time.Based on experience with other products,the firm expects to achieve an efficiency level for the cranks of 85%.What is the expected weekly output of cranks for this company?

Accepted Answer

A) 5100 
B) 5700 
C) 4845 
D) 969 
E) 6783 
A) 5100 
B) 5700 
C) 4845 
D) 969 
E) 6783

Question 6

Consider a production line with five stations.Station 1 can produce a unit in 9 minutes.Station 2 can produce a unit in 10 minutes.Station 3 has two identical machines,each of which can process a unit in 12 minutes (each unit only needs to be processed on one of the two machines.Station 4 can produce a unit in 5 minutes.Station 5 can produce a unit in 8 minutes.Which station is the bottleneck station?

Accepted Answer

A) Station 1 
B) Station 2 
C) Station 3 
D) Station 4 
E) Station 5 
A) Station 1 
B) Station 2 
C) Station 3 
D) Station 4 
E) Station 5

Question 7

Multiproduct break-even analysis calculates the ________ of each product,________ it in proportion to each product's share of total sales.

Accepted Answer

contributi

Question 8

A capacity alternative has an initial cost of $50,000 and cash flow of $20,000 for each of the next four years.If the cost of capital is 5 percent,what is the approximate net present value of this investment?

Accepted Answer

A) $20,920 
B) $26,160 
C) $49,840 
D) $70,920 
E) $106,990 
A) $20,920 
B) $26,160 
C) $49,840 
D) $70,920 
E) $106,990

Question 9

Which of the following techniques is NOT a technique for dealing with a bottleneck?

Accepted Answer

A) Schedule throughput to match the capacity of the bottleneck. 
B) Increase the capacity of the constraint. 
C) Have cross-trained employees available to keep the constraint at full operation. 
D) Develop alternate routings. 
E) All are techniques for dealing with bottlenecks. 
A) Schedule throughput to match the capacity of the bottleneck. 
B) Increase the capacity of the constraint. 
C) Have cross-trained employees available to keep the constraint at full operation. 
D) Develop alternate routings. 
E) All are techniques for dealing with bottlenecks.

Question 10

Distinguish between utilization and efficiency.

Accepted Answer

Both are ratios,not item counts.Both use

Question 11

A graphic design studio is considering three new computers.The first model,A,costs $5000.Model B and C cost $3000 and $1000 respectively.If each customer provides $50 of revenue and variable costs are $20/customer,find the number of customers required for each model to break even.

Accepted Answer

A: BEP = 5000/(50-20)= 166.7 c

Question 12

Price changes are useful for matching the level of demand to the capacity of a facility.

Accepted Answer

A) True 
 B)False

Question 13

The efficiency of a factory is 75% and its utilization 50%.If effective capacity is 1000 find design capacity.

Accepted Answer

Output = Efficiency ∗ Effectiv

Question 14

Break-even is the number of units at which:

Accepted Answer

A) total revenue equals price times quantity. 
B) total revenue equals total variable cost. 
C) total revenue equals total fixed cost. 
D) total profit equals total cost. 
E) total revenue equals total cost. 
A) total revenue equals price times quantity. 
B) total revenue equals total variable cost. 
C) total revenue equals total fixed cost. 
D) total profit equals total cost. 
E) total revenue equals total cost.

Question 15

A product is currently made in a process-focused shop,where fixed costs are $8,000 per year and variable cost is $40 per unit.The firm currently sells 200 units of the product at $200 per unit.A manager is considering a repetitive focus to lower costs (and lower prices,thus raising demand).The costs of this proposed shop are fixed costs = $24,000 per year and variable costs = $10 per unit.If a price of $80 will allow 400 units to be sold,what profit (or loss)can this proposed new process expect? Do you anticipate that the manager will want to change the process? Explain.

Accepted Answer

Old: TR = $40,000,TC = $16,000,therefore

Question 16

Design capacity is the theoretical maximum output of a system in a given period under ideal conditions.

Accepted Answer

A) True 
 B)False

An organization whose capacity is on that portion of the average unit cost curve that falls as output rises:

Break-even analysis can be used by a firm that produces more than one product,but:

The bottleneck time is always at least as long as the throughput time.

Multiproduct break-even analysis calculates the of each product, it in proportion to each product's share of total sales.

A capacity alternative has an initial cost of $50,000 and cash flow of $20,000 for each of the next four years.If the cost of capital is 5 percent,what is the approximate net present value of this investment?

Which of the following techniques is NOT a technique for dealing with a bottleneck?

Distinguish between utilization and efficiency.

A graphic design studio is considering three new computers.The first model,A,costs $5000.Model B and C cost $3000 and $1000 respectively.If each customer provides $50 of revenue and variable costs are $20/customer,find the number of customers required for each model to break even.

Price changes are useful for matching the level of demand to the capacity of a facility.

The efficiency of a factory is 75% and its utilization 50%.If effective capacity is 1000 find design capacity.

Break-even is the number of units at which:

Design capacity is the theoretical maximum output of a system in a given period under ideal conditions.

Operations and Productivity

Operations Strategy in a Global Environment

Project Management

Forecasting

Design of Goods and Services

Managing Quality

Process Strategy

Location Strategies

Layout Strategies

Human Resources, job Design, and Work Measurement

Supply Chain Management

Inventory Management

Aggregate Planning and Sop

Material Requirements Planning Mrpand Erp

Short-Term Scheduling

Jit, tps, and Lean Operations

Maintenance and Reliability

Sustainability in the Supply Chain

Statistical Process Control

Supply Chain Management Analytics

Decision-Making Tools

Linear Programming

Transportation Models

Waiting-Line Models

Learning Curves

Simulation

Filters

Exam 8: Capacity and Constraint Management

An organization whose capacity is on that portion of the average unit cost curve that falls as output rises:

Break-even analysis can be used by a firm that produces more than one product,but:

The bottleneck time is always at least as long as the throughput time.

Multiproduct break-even analysis calculates the ________ of each product,________ it in proportion to each product's share of total sales.

A capacity alternative has an initial cost of $50,000 and cash flow of $20,000 for each of the next four years.If the cost of capital is 5 percent,what is the approximate net present value of this investment?

Which of the following techniques is NOT a technique for dealing with a bottleneck?

Distinguish between utilization and efficiency.

A graphic design studio is considering three new computers.The first model,A,costs $5000.Model B and C cost $3000 and $1000 respectively.If each customer provides $50 of revenue and variable costs are $20/customer,find the number of customers required for each model to break even.

Price changes are useful for matching the level of demand to the capacity of a facility.

The efficiency of a factory is 75% and its utilization 50%.If effective capacity is 1000 find design capacity.

Break-even is the number of units at which:

Design capacity is the theoretical maximum output of a system in a given period under ideal conditions.

Operations and Productivity

Operations Strategy in a Global Environment

Project Management

Forecasting

Design of Goods and Services

Managing Quality

Process Strategy

Location Strategies

Layout Strategies

Human Resources, job Design, and Work Measurement

Supply Chain Management

Inventory Management

Aggregate Planning and Sop

Material Requirements Planning Mrpand Erp

Short-Term Scheduling

Jit, tps, and Lean Operations

Maintenance and Reliability

Sustainability in the Supply Chain

Statistical Process Control

Supply Chain Management Analytics

Decision-Making Tools

Linear Programming

Transportation Models

Waiting-Line Models

Learning Curves

Simulation

Filters

Multiproduct break-even analysis calculates the of each product, it in proportion to each product's share of total sales.