Question 1

The ________ concept states that the average unit cost of a service or good can be reduced by increasing its output rate.

Accepted Answer

The answer of The ________ concept states that the average...

Question 2

What is a capacity cushion? Provide examples of capacity cushions in a university setting and an automotive producer.

Accepted Answer

The term capacity cushion refers to the

Question 3

________ occurs when the average cost per unit increases as the facility's size increases.

Accepted Answer

Diseconomi

Question 4

A manufacturing plant is capable of producing 10 tons of product per day when it runs three shifts with no breakdowns and plenty of raw materials.Over the past week,the plant has produced an average of 7.3 tons per day because the third shift has devoted much of their time to preventive maintenance.What is the utilization of the plant?

Accepted Answer

A) 10 tons/day 
B) 7)3 tons/day 
C) 137% 
D) 73% 
A) 10 tons/day 
B) 7)3 tons/day 
C) 137% 
D) 73%

Question 5

The degree to which equipment,space,or labor is being used is commonly referred to as:

Accepted Answer

A) capacity. 
B) output. 
C) utilization. 
D) cushion. 
A) capacity. 
B) output. 
C) utilization. 
D) cushion.

Question 6

Sleep Tight Motel has the opportunity to purchase an adjacent plot of land.Building on this land would increase their capacity from the current sales level of $515,000/year to $600,000/year.Sleep Tight experiences a 20 percent before-tax profit margin.It wishes to estimate the additional before-tax profits that the expansion will produce.Using the following information,how much more before-tax cash flow would be realized just in year 10 alone?

Accepted Answer

A) less than or equal to $20,000 
B) greater than $20,000 but less than or equal to $25,000 
C) greater than $25,000 but less than or equal to $30,000 
D) greater than 30,000 
A) less than or equal to $20,000 
B) greater than $20,000 but less than or equal to $25,000 
C) greater than $25,000 but less than or equal to $30,000 
D) greater than 30,000

Question 7

________ is the amount of reserve capacity that a firm maintains to handle a sudden increase in demand or temporary losses of production capacity.

Accepted Answer

The answer of ________ is the amount of reserve capacity...

Question 8

A planning horizon is defined as the period beyond which the company does not have customer orders.

Accepted Answer

A) True 
 B)False

Question 9

It takes a service rep an average of two minutes to take a customer's information.Over the course of a work week,the rep handles 160 calls a day during her eight hour shift.What is the service rep's capacity cushion?

Accepted Answer

A) 20% 
B) 33% 
C) 50% 
D) 67% 
A) 20% 
B) 33% 
C) 50% 
D) 67%

Question 10

What is a waiting line model,and what information can it provide?

Accepted Answer

Waiting line models use probab

Question 11

A standard work year is 2000 hours at the Luther Mill and it takes about an hour and a half to fill a customer order.The manager at the mill is always concerned about employee idle time,so he aims for a capacity cushion of two percent.Last year saw 15,000 customer orders at the mill and the manager has a new John Deere in mind as a company car,so he hopes that there is an increase of 15% in customer orders for next year.How many workers will the manager need to have at the mill next year?

Accepted Answer

A) 10 
B) 13 
C) 16 
D) 19 
A) 10 
B) 13 
C) 16 
D) 19

Question 12

Give four principal reasons economies of scale can occur when output increases.Provide examples of each for a service firm.

Accepted Answer

The four reasons are spreading fixed cos

Question 13

________ is the degree to which equipment,space,or labor is currently being used.

Accepted Answer

The answer of ________ is the degree to which equipment,space,or...

Question 14

Use the information in Scenario 4.5.What is the pre-tax cash flow (net present value)for alternative #1 compared to the base case of doing nothing for the next five years?

Accepted Answer

A) negative pre-tax cash flow 
B) more than $0 but less than $40,000 
C) more than $40,000 but less than $80,000 
D) more than $80,000 
A) negative pre-tax cash flow 
B) more than $0 but less than $40,000 
C) more than $40,000 but less than $80,000 
D) more than $80,000

Question 15

Output measures are used for estimating capacity requirements when product variety and process divergence are high.

Accepted Answer

A) True 
 B)False

Question 16

A printing company works on three types of printing jobs,each of which could be produced on the same model printing machine.The predicted annual demands and typical order sizes are shown in the table.The company has 2000 production hours available each year and requires a 10% capacity cushion to allow for preventive maintenance,breakdowns,and other unforeseen circumstances.They have floor space for five printing machines.If the time needed to set up a printing machine to switch from one job to the next is identical for all three job types,what must their setup time be to achieve their required output?

Accepted Answer

It can't be done;the production time req

Question 17

A standard work year is 2000 hours at the Luther Mill and it takes about an hour and a half to fill a customer order.Last year saw 15,000 customer orders at the mill and the manager has a new John Deere in mind as a company car,so he hopes that there is an increase of 15% in customer orders for next year.If the manager hires fourteen workers,what is the capacity cushion?

Accepted Answer

A) 7)6% 
B) 8)2% 
C) 6)9% 
D) 8)8% 
A) 7)6% 
B) 8)2% 
C) 6)9% 
D) 8)8%

Question 18

Waiting line models are often used for capacity planning.

Accepted Answer

A) True 
 B)False

Question 19

Capacity planning requires a demand forecast for an extended period of time into the future.What concerns would you have regarding an extended forecast as a capacity planner?

Accepted Answer

Unfortunately,forecast accuracy declines

Question 20

A capacity cushion is the amount of inventory that a firm maintains to handle sudden increases in demand or temporary loss of production capacity.

Accepted Answer

A) True 
 B)False

Exam 4: Capacity Planning

The ________ concept states that the average unit cost of a service or good can be reduced by increasing its output rate.

What is a capacity cushion? Provide examples of capacity cushions in a university setting and an automotive producer.

________ occurs when the average cost per unit increases as the facility's size increases.

The degree to which equipment,space,or labor is being used is commonly referred to as:

________ is the amount of reserve capacity that a firm maintains to handle a sudden increase in demand or temporary losses of production capacity.

A planning horizon is defined as the period beyond which the company does not have customer orders.

It takes a service rep an average of two minutes to take a customer's information.Over the course of a work week,the rep handles 160 calls a day during her eight hour shift.What is the service rep's capacity cushion?

What is a waiting line model,and what information can it provide?

Give four principal reasons economies of scale can occur when output increases.Provide examples of each for a service firm.

________ is the degree to which equipment,space,or labor is currently being used.

Use the information in Scenario 4.5.What is the pre-tax cash flow (net present value)for alternative #1 compared to the base case of doing nothing for the next five years?

Output measures are used for estimating capacity requirements when product variety and process divergence are high.

Waiting line models are often used for capacity planning.

Capacity planning requires a demand forecast for an extended period of time into the future.What concerns would you have regarding an extended forecast as a capacity planner?

A capacity cushion is the amount of inventory that a firm maintains to handle sudden increases in demand or temporary loss of production capacity.

Using Operations to Create Value

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Quality and Performance

Constraint Management

Lean Systems

Project Management

Forecasting

Inventory Management

Operations Planning and Scheduling

Resource Planning

Supply Chain Design

Supply Chain Logistic Networks

Supply Chain Integration

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Decision Making

Waiting Lines

Special Inventory Models

Linear Programming

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Financial Analysis

Acceptance Sampling Plans

Measuring Output Rates

Learning Curve Analysis

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