Question 1

__________ is the amount a facility can hold, store, receive, or produce in a period of time.

Accepted Answer

Throughput

Question 2

Which of the following costs would be incurred even if no units were produced?

Accepted Answer

A)  raw material costs 
B)  direct labor costs 
C)  transportation costs 
D)  building rental costs 
E)  purchasing costs 
A)  raw material costs 
B)  direct labor costs 
C)  transportation costs 
D)  building rental costs 
E)  purchasing costs

Question 3

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

Accepted Answer

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

Question 4

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 build a smaller facility 
C)  is suffering from diseconomies of scale 
D)  has utilization higher than efficiency 
E)  has efficiency higher than utilization 
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 build a smaller facility 
C)  is suffering from diseconomies of scale 
D)  has utilization higher than efficiency 
E)  has efficiency higher than utilization

Question 5

Suppose that the market has a 70% chance of being favorable and a 30% chance of being unfavorable. A favorable market will yield a profit of $300,000, while an unfavorable market will yield a profit of $20,000. What is the expected monetary value (EMV) in this situation?

Accepted Answer

EMV = (0.7)($300,000

Question 6

How is break-even analysis useful in the study of the capacity decision? What limitations does this analytical tool have in this application?

Accepted Answer

Breakeven is defined as the volume for w

Question 7

TOC strives to reduce the effect of constraints by

Accepted Answer

A)  offloading work from constrained workstations 
B)  increasing constrained workstation capability 
C)  changing workstation order to reduce process cycle time 
D)  A and B 
E)  A, B, and C 
A)  offloading work from constrained workstations 
B)  increasing constrained workstation capability 
C)  changing workstation order to reduce process cycle time 
D)  A and B 
E)  A, B, and C

Question 8

TOC was popularized by

Accepted Answer

A)  Goldratt and Cox 
B)  Ford 
C)  Taguchi 
D)  Deming 
E)  Motorola and GE 
A)  Goldratt and Cox 
B)  Ford 
C)  Taguchi 
D)  Deming 
E)  Motorola and GE

Question 9

A firm is about to undertake the manufacture of a product, and is weighing three capacity alternatives: small job shop, large job shop, and repetitive manufacturing. The small job shop has fixed costs of $3,000 per month, and variable costs of $10 per unit. The larger job shop has fixed costs of $12,000 per month and variable costs of $3 per unit. The repetitive manufacturing plant has fixed costs of $30,000 and variable costs of $1 per unit. Demand for the product is expected to be 1,000 units per month with "moderate" market acceptance, but 2,000 under "strong" market acceptance. The probability of moderate acceptance is estimated to be 60 percent; strong acceptance has a probability of 40 percent. The product will sell for $25 per unit regardless of the capacity decision. Which capacity choice should the firm make?

Accepted Answer

The payoffs are as follows: small job sh

Question 10

Of the three approaches to capacity expansion, the approach that "straddles" demand

Accepted Answer

A)  uses incremental expansion 
B)  uses one-step expansion 
C)  at some times leads demand, and at other times lags 
D)  works best when demand is not growing but is stable 
E)  Choices A and C are both correct. 
A)  uses incremental expansion 
B)  uses one-step expansion 
C)  at some times leads demand, and at other times lags 
D)  works best when demand is not growing but is stable 
E)  Choices A and C are both correct.

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)= 166.6 cus

Question 12

Which of the following represents an aggressive approach to demand management in the service sector when demand and capacity are not particularly well matched?

Accepted Answer

A)  inexpensive rates for weekend phone calls 
B)  appointments 
C)  reservations 
D)  first-come, first-served 
E)  none of the above 
A)  inexpensive rates for weekend phone calls 
B)  appointments 
C)  reservations 
D)  first-come, first-served 
E)  none of the above

Question 13

The theory of constraints has its origins in

Accepted Answer

A)  linear programming theory 
B)  the theory of economies of scale 
C)  material requirements planning 
D)  the theory of finite capacity planning 
E)  Goldratt and Cox's book, The Goal: A Process of Ongoing Improvement 
A)  linear programming theory 
B)  the theory of economies of scale 
C)  material requirements planning 
D)  the theory of finite capacity planning 
E)  Goldratt and Cox's book, The Goal: A Process of Ongoing Improvement

Question 14

Describe how EMV might be used to analyze a capacity decision.

Accepted Answer

The EMV for each capacity decision (perh

Question 15

Net present value

Accepted Answer

A)  is gross domestic product less depreciation 
B)  is sales volume less sales and excise taxes 
C)  is profit after taxes 
D)  ignores the time value of money 
E)  is the discounted value of a series of future cash receipts 
A)  is gross domestic product less depreciation 
B)  is sales volume less sales and excise taxes 
C)  is profit after taxes 
D)  ignores the time value of money 
E)  is the discounted value of a series of future cash receipts

Question 16

__________ analysis finds the point at which costs equals revenues.

Accepted Answer

The answer of __________ analysis finds the point at which...

Question 17

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, the net present value of this investment is approximately

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 18

Expected output is sometimes referred to as rated capacity.
True

Accepted Answer

A) True 
 B)False

Question 19

The theory of constraints is a body of knowledge that deals with anything that limits an organization's ability to achieve its goals.

Accepted Answer

A) True 
 B)False

Question 20

Define fixed costs.

Accepted Answer

Fixed costs are thos

Exam 24: Process Strategy

__________ is the amount a facility can hold, store, receive, or produce in a period of time.

Which of the following costs would be incurred even if no units were produced?

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

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

Suppose that the market has a 70% chance of being favorable and a 30% chance of being unfavorable. A favorable market will yield a profit of $300,000, while an unfavorable market will yield a profit of $20,000. What is the expected monetary value (EMV) in this situation?

How is break-even analysis useful in the study of the capacity decision? What limitations does this analytical tool have in this application?

TOC strives to reduce the effect of constraints by

TOC was popularized by

Of the three approaches to capacity expansion, the approach that "straddles" demand

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.

Which of the following represents an aggressive approach to demand management in the service sector when demand and capacity are not particularly well matched?

The theory of constraints has its origins in

Describe how EMV might be used to analyze a capacity decision.

Net present value

__________ analysis finds the point at which costs equals revenues.

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, the net present value of this investment is approximately

Expected output is sometimes referred to as rated capacity. True

The theory of constraints is a body of knowledge that deals with anything that limits an organization's ability to achieve its goals.

Define fixed costs.

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

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