Question 1

__________ is actual output as a percent of design capacity.

Accepted Answer

The answer of __________ is actual output as a percent...

Question 2

The capacity planning strategy that delays adding capacity until capacity is below demand, then adds a capacity increment so that capacity is above demand, is said to__________ demand.

Accepted Answer

The answer of The capacity planning strategy that delays adding...

Question 3

A product sells for $5, and has unit variable costs of $3. This product accounts for $20,000 in annual sales, out of the firm's total of $60,000. When performing multiproduct break-even analysis, the weighted contribution of this product is approximately

Accepted Answer

A)  0.133 
B)  0.200 
C)  0.40 
D)  0.667 
E)  $1.667 
A)  0.133 
B)  0.200 
C)  0.40 
D)  0.667 
E)  $1.667

Question 4

Fixed costs are those costs that continue even if no units are produced.

Accepted Answer

A) True 
 B)False

Question 5

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 three 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 6

Why is the capacity decision important?

Accepted Answer

The capacity decision is important for s

Question 7

A shop wants to increase capacity by adding a new machine. The firm is considering proposals from vendor A and vendor B. The fixed costs for machine A are $90,000 and for machine B, $75,000. The variable cost for A is $15.00 per unit and for B, $18.00. The revenue generated by the units processed on these machines is $22 per unit. If the estimated output is 9,000 units, which machine should be purchased?

Accepted Answer

A)  machine A 
B)  machine B 
C)  either machine A or machine B 
D)  no purchase because neither machine yields a profit at that volume 
E)  purchase both machines since they are both profitable 
A)  machine A 
B)  machine B 
C)  either machine A or machine B 
D)  no purchase because neither machine yields a profit at that volume 
E)  purchase both machines since they are both profitable

Question 8

One limitation of the net present value approach to investments is that investments with identical net present values may have very different cash flows.

Accepted Answer

A) True 
 B)False

Question 9

What is sometimes referred to as rated capacity?

Accepted Answer

A)  efficiency 
B)  utilization 
C)  effective capacity 
D)  expected output 
E)  design capacity 
A)  efficiency 
B)  utilization 
C)  effective capacity 
D)  expected output 
E)  design capacity

Question 10

The process time of a system is equivalent to the

Accepted Answer

A)  process time of the bottleneck 
B)  sum of all workstation times 
C)  shortest workstation time 
D)  mean workstation time 
E)  median workstation time 
A)  process time of the bottleneck 
B)  sum of all workstation times 
C)  shortest workstation time 
D)  mean workstation time 
E)  median workstation time

Question 11

__________ is a means of determining the discounted value of a series of future cash receipts.

Accepted Answer

Net presen

Question 12

Explain the importance of a bottleneck operation in a production sequence.

Accepted Answer

A bottleneck operation is one

Question 13

Identify, in proper sequence, the steps in the process of recognizing and managing constraints.

Accepted Answer

The five-step process of the theory of c

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Distinguish between utilization and efficiency.

Accepted Answer

Both are ratios, not item counts. Both u

Question 16

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, therefo

Question 17

__________ cost is the cost that continues even if no units are produced.

Accepted Answer

The answer of __________ cost is the cost that continues...

Question 18

A high value for which of the following signals that an operations manager is excelling?

Accepted Answer

A)  efficiency 
B)  utilization 
C)  effective capacity 
D)  net present value 
E)  none of the above 
A)  efficiency 
B)  utilization 
C)  effective capacity 
D)  net present value 
E)  none of the above

Question 19

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 20

The three main strategies for increasing capacity are

Accepted Answer

A)  leading, lag, straddle 
B)  fast, normal, slow 
C)  before, during, after 
D)  leading, behind, mixed 
E)  none of the above 
A)  leading, lag, straddle 
B)  fast, normal, slow 
C)  before, during, after 
D)  leading, behind, mixed 
E)  none of the above

Exam 24: Process Strategy

__________ is actual output as a percent of design capacity.

The capacity planning strategy that delays adding capacity until capacity is below demand, then adds a capacity increment so that capacity is above demand, is said to__________ demand.

A product sells for $5, and has unit variable costs of $3. This product accounts for $20,000 in annual sales, out of the firm's total of $60,000. When performing multiproduct break-even analysis, the weighted contribution of this product is approximately

Fixed costs are those costs that continue even if no units are produced.

Why is the capacity decision important?

One limitation of the net present value approach to investments is that investments with identical net present values may have very different cash flows.

What is sometimes referred to as rated capacity?

The process time of a system is equivalent to the

__________ is a means of determining the discounted value of a series of future cash receipts.

Explain the importance of a bottleneck operation in a production sequence.

Identify, in proper sequence, the steps in the process of recognizing and managing constraints.

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

Distinguish between utilization and efficiency.

__________ cost is the cost that continues even if no units are produced.

A high value for which of the following signals that an operations manager is excelling?

Break-even is the number of units at which

The three main strategies for increasing capacity are

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

Material Requirements Planning Mrp and Erp

Short-Term Scheduling

Just-In-Time and Lean Options

Maintenance and Reliability

Statistical Tools for Managers

Acceptance Sampling

The Simplex Method of Linear Programming

The Modi and Vam Methods of Solving Transportation Problems

Vehicle Routing and Scheduling

Managing Quality

Supply-Chain Management

Vehicle Routing and Scheduling

Filters