Question 1

Regarding the measurement of capacity,when a firm provides a relatively small number of standardized products and services:

Accepted Answer

A) capacity cannot be determined reliably. 
B) input measures are typically used. 
C) output measures are typically used. 
D) utilization becomes equal to capacity. 
A) capacity cannot be determined reliably. 
B) input measures are typically used. 
C) output measures are typically used. 
D) utilization becomes equal to capacity.

Question 2

The Union Manufacturing Company is producing two types of products: A and B.The demand forecasts,batch size,and time standards for the Mark I operation follow:
   The company works 250 days per year and operates 2 shifts,each covering 8 hours.If a 20 percent capacity cushion is maintained,how many new Mark I machines are required if Union does not resort to any short-term capacity options?

Accepted Answer

M = @#IMG-DLM& where M = number of machines requir

Question 3

An expansionist capacity strategy:

Accepted Answer

A) lags behind demand. 
B) reduces the risk of overexpansion based on overly optimistic demand forecasts. 
C) can preempt expansion by competitors by announcing a large capacity expansion. 
D) meets capacity shortfalls with overtime,temporary workers,subcontracting,and stockouts. 
A) lags behind demand. 
B) reduces the risk of overexpansion based on overly optimistic demand forecasts. 
C) can preempt expansion by competitors by announcing a large capacity expansion. 
D) meets capacity shortfalls with overtime,temporary workers,subcontracting,and stockouts.

Question 4

One of the many steps in the production of toothpaste is to screw the caps on the tubes,which is still a manual process,performed by one man,Mr.Bucket.Which statement about this situation is BEST?

Accepted Answer

A) This is most appropriate for an output measure of capacity. 
B) This is most appropriate for an input measure of capacity. 
C) Utilization of the worker at this process step cannot be measures as it is a manual process. 
D) In this case,the capacity of this step is not the maximum rate of output. 
A) This is most appropriate for an output measure of capacity. 
B) This is most appropriate for an input measure of capacity. 
C) Utilization of the worker at this process step cannot be measures as it is a manual process. 
D) In this case,the capacity of this step is not the maximum rate of output.

Question 5

Large,infrequent jumps in capacity are characteristic of companies that:

Accepted Answer

A) have an expansionist strategy. 
B) have a wait-and-see strategy. 
C) have low utilization. 
D) have high utilization. 
A) have an expansionist strategy. 
B) have a wait-and-see strategy. 
C) have low utilization. 
D) have high utilization.

Question 6

The ________ is the act of doing nothing and losing orders from any demand that exceeds capacity,or incurs costs because capacity is too large.

Accepted Answer

The answer of The ________ is the act of doing...

Question 7

What factors should be considered when selecting the appropriate capacity cushion? How does the choice of capacity cushion relate to other decisions in operations management? To other functional areas?

Accepted Answer

The appropriate size of the capacity cus

Question 8

The Northern Manufacturing Company is producing products A and B,using the same machine called MASAC27A.Demand forecasts for next year and other production-related information are provided in the following table.   The company works 250 days per year and operates 2 shifts each day,each shift covering 8 hours.If 25 percent of capacity cushion is maintained throughout the year,how many machines (MASAC27A)does the company need next year to meet the demand? (Round your answer up to the next whole machine. )

Accepted Answer

A) fewer than 11 machines 
B) 11 machines 
C) 12 machines 
D) more than 12 machines 
A) fewer than 11 machines 
B) 11 machines 
C) 12 machines 
D) more than 12 machines

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

A larger capacity cushion can help firms uncover process inefficiencies,so they can find ways to correct them.

Accepted Answer

A) True 
 B)False

Question 11

A capacity decision in a call center,such as the number of customer service representatives to answer the phone during a peak period,can be addressed using a(n)________.

Accepted Answer

waiting-li

Question 12

A well-educated operations manager used the capacity requirements equation to determine the number of crackerbox welders to purchase for the shop,given the standard time per unit,hours available per machine,among other relevant parameters.He studied the answer,12.6,and concluded that:

Accepted Answer

A) he had made a mistake,since it isn't possible to purchase a fractional welder. 
B) he needed to decrease his desired capacity cushion to bring him up to an even thirteen welders. 
C) he should buy twelve welders and spend 50% more time per part to reach the 12.6 figure. 
D) he should buy twelve welders and use all of them at 5% overtime to achieve the necessary output. 
A) he had made a mistake,since it isn't possible to purchase a fractional welder. 
B) he needed to decrease his desired capacity cushion to bring him up to an even thirteen welders. 
C) he should buy twelve welders and spend 50% more time per part to reach the 12.6 figure. 
D) he should buy twelve welders and use all of them at 5% overtime to achieve the necessary output.

Question 13

Innovative Inc.is experiencing a boom for the products it has introduced recently.The estimated annual sales projected for the next five years are given in the following table.The current capacity is equivalent to only $100 million sales.The company is considering the alternative of expanding capacity to an equivalent of $250 million sales.Assume a 25 percent pretax profit margin.What is the increase in total pretax cash flow (summed over all years)that would be enjoyed because of the expansion?

Accepted Answer

A) less than or equal to $40 million 
B) more than $40 million but less than or equal to $70 million 
C) more than $70 million but less than or equal to $100 million 
D) more than $100 million 
A) less than or equal to $40 million 
B) more than $40 million but less than or equal to $70 million 
C) more than $70 million but less than or equal to $100 million 
D) more than $100 million

Question 14

Extremely complex service capacity problems for which there are no optimizing equations should be analyzed using ________.

Accepted Answer

The answer of Extremely complex service capacity problems for which...

Question 15

Table 4.1
The Union Manufacturing Company is producing two types of products: A and B.The demand forecasts,batch size,and time standards follow:
   Both products are produced on the same machine,called Mark I.
-Use the information in Table 4.1.The company works 250 days per year and operates two shifts,each covering 8 hours.If a 15 percent capacity cushion is maintained,how many hours of capacity can the company expect from each of its Mark I machines?

Accepted Answer

A) fewer than 3000 
B) between 3000 and 3500 
C) between 3501 and 4000 
D) more than 4000 
A) fewer than 3000 
B) between 3000 and 3500 
C) between 3501 and 4000 
D) more than 4000

Question 16

Which one of the following statements concerning capacity cushions is BEST?

Accepted Answer

A) Large capacity cushions are used more often when future demand is level and known. 
B) Small capacity cushions are used extensively in capital intensive firms. 
C) Capacity cushions are used primarily in manufacturing organizations,not in service organizations. 
D) Small cushions are used in organizations where the products and services produced often change. 
A) Large capacity cushions are used more often when future demand is level and known. 
B) Small capacity cushions are used extensively in capital intensive firms. 
C) Capacity cushions are used primarily in manufacturing organizations,not in service organizations. 
D) Small cushions are used in organizations where the products and services produced often change.

Question 17

A process's capacity requirement states the future process capacity needed to meet projected customer demands,and includes an allowance for the desired capacity cushion.

Accepted Answer

A) True 
 B)False

Question 18

The test bank author abandoned his teaching duties when he was in the zone working on a test bank.Normally scheduled to teach a nine hour load during the semester,he generally made his way to one three hour class a week,one where his students could propose devious problems that were sure to confound generations of test takers.What is the test bank author's utilization for his teaching duties?

Accepted Answer

A) three hours 
B) nine hours 
C) 33% 
D) 300% 
A) three hours 
B) nine hours 
C) 33% 
D) 300%

Question 19

The transition from economies of scale to diseconomies of scale:

Accepted Answer

A) is more likely to occur in a service operation. 
B) is more likely to occur in a manufacturing operation. 
C) is more likely to occur when utilization is low. 
D) contains the point at which average unit costs are at their lowest. 
A) is more likely to occur in a service operation. 
B) is more likely to occur in a manufacturing operation. 
C) is more likely to occur when utilization is low. 
D) contains the point at which average unit costs are at their lowest.

Question 20

________ are more appropriate measures of capacity in situations where a task that is initially difficult and time-consuming to perform becomes second-nature and short in duration.

Accepted Answer

The answer of ________ are more appropriate measures of capacity...

Exam 4: Capacity Planning

Regarding the measurement of capacity,when a firm provides a relatively small number of standardized products and services:

An expansionist capacity strategy:

One of the many steps in the production of toothpaste is to screw the caps on the tubes,which is still a manual process,performed by one man,Mr.Bucket.Which statement about this situation is BEST?

Large,infrequent jumps in capacity are characteristic of companies that:

The ________ is the act of doing nothing and losing orders from any demand that exceeds capacity,or incurs costs because capacity is too large.

What factors should be considered when selecting the appropriate capacity cushion? How does the choice of capacity cushion relate to other decisions in operations management? To other functional areas?

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

A larger capacity cushion can help firms uncover process inefficiencies,so they can find ways to correct them.

A capacity decision in a call center,such as the number of customer service representatives to answer the phone during a peak period,can be addressed using a(n)________.

A well-educated operations manager used the capacity requirements equation to determine the number of crackerbox welders to purchase for the shop,given the standard time per unit,hours available per machine,among other relevant parameters.He studied the answer,12.6,and concluded that:

Extremely complex service capacity problems for which there are no optimizing equations should be analyzed using ________.

Which one of the following statements concerning capacity cushions is BEST?

A process's capacity requirement states the future process capacity needed to meet projected customer demands,and includes an allowance for the desired capacity cushion.

The transition from economies of scale to diseconomies of scale:

________ are more appropriate measures of capacity in situations where a task that is initially difficult and time-consuming to perform becomes second-nature and short in duration.

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