Question 1

________ is actual output as a percent of design capacity.

Accepted Answer

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

Question 2

What are the four limitations of the net present value technique?

Accepted Answer

(1)Investments with the same net present

Question 3

A useful tactic for increasing capacity is to redesign a product in order to facilitate more throughput.

Accepted Answer

A) True 
 B)False

Question 4

Break-even analysis is a powerful analytical tool,but is useful only when the organization produces a single product.

Accepted Answer

A) True 
 B)False

Question 5

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 6

Changes in capacity may lead,lag,or straddle the demand.

Accepted Answer

A) True 
 B)False

Question 7

The staff training center at a large regional hospital provides training sessions in CPR to all employees.Assume that the capacity of this training system was designed to be 1800 employees per year.Since the training center was first put in use,the program has become more complex,so that 1400 now represents the most employees that can be trained per year.In the past year,1350 employees were trained.Calculate the efficiency and the utilization of this system.

Accepted Answer

Efficiency = 1350 /

Question 8

Describe the theory of constraints in a sentence.

Accepted Answer

The theory of constraints is t

Question 9

Net present value will be greater:

Accepted Answer

A) as a fixed set of cash receipts occurs later rather than earlier. 
B) if the future value of a cash flow is smaller. 
C) for one end-of-year receipt of $1200 than for twelve monthly receipts of $100 each. 
D) for a 4% discount rate than for a 6% discount rate. 
E) All of the above are true. 
A) as a fixed set of cash receipts occurs later rather than earlier. 
B) if the future value of a cash flow is smaller. 
C) for one end-of-year receipt of $1200 than for twelve monthly receipts of $100 each. 
D) for a 4% discount rate than for a 6% discount rate. 
E) All of the above are true.

Question 10

Fabricators,Inc.wants to increase capacity by adding a new machine.The fixed costs for machine A are $90,000,and its variable cost is $15 per unit.The revenue is $21 per unit.What is the break-even point for machine A?

Accepted Answer

A) $90,000 dollars 
B) 90,000 units 
C) $15,000 dollars 
D) 15,000 units 
E) 4,286 units 
A) $90,000 dollars 
B) 90,000 units 
C) $15,000 dollars 
D) 15,000 units 
E) 4,286 units

Question 11

The Academic Computing Center has five trainers available in its computer labs to provide training sessions to students.Assume that the design capacity of the system is 1900 students per semester and that effective capacity equals 90% of design capacity.If the number of students who actually got their orientation session is 1500,what is the efficiency of the system?

Accepted Answer

A) 1350 students 
B) 1710 students 
C) 78.9% 
D) 87.7% 
E) 90% 
A) 1350 students 
B) 1710 students 
C) 78.9% 
D) 87.7% 
E) 90%

Question 12

Effective capacity is the:

Accepted Answer

A) maximum output of a system in a given period. 
B) capacity a firm expects to achieve given the current operating constraints. 
C) average output that can be achieved under ideal conditions. 
D) minimum usable capacity of a particular facility. 
E) sum of all of the organization's inputs. 
A) maximum output of a system in a given period. 
B) capacity a firm expects to achieve given the current operating constraints. 
C) average output that can be achieved under ideal conditions. 
D) minimum usable capacity of a particular facility. 
E) sum of all of the organization's inputs.

Question 13

A good capacity decision requires that it be tightly integrated with the organization's strategy and investments.But there are four other special "considerations" to making a good capacity decision.Identify them.

Accepted Answer

(1)Forecast demand accurately.

Question 14

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

Accepted Answer

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

Question 15

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 16

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 17

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 18

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 19

________ is actual output as a percent of effective capacity.

Accepted Answer

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

Question 20

The staff training center at a large regional hospital provides training sessions in CPR to all employees.Assume that the capacity of this training system was designed to be 1200 employees per year.Since the training center was first put into use,the program has become more complex,so that 1050 now represents the most employees that can be trained per year.In the past year,950 employees were trained.The efficiency of this system is approximately ________ and its utilization is approximately ________.

Accepted Answer

A) 79.2 percent;90.5 percent 
B) 90.5 percent;79.2 percent 
C) 87.5 percent;950 employees 
D) 950 employees;1050 employees 
E) 110.5 percent;114.3 percent 
A) 79.2 percent;90.5 percent 
B) 90.5 percent;79.2 percent 
C) 87.5 percent;950 employees 
D) 950 employees;1050 employees 
E) 110.5 percent;114.3 percent

Exam 20: Capacity and Constraint Management

________ is actual output as a percent of design capacity.

What are the four limitations of the net present value technique?

A useful tactic for increasing capacity is to redesign a product in order to facilitate more throughput.

Break-even analysis is a powerful analytical tool,but is useful only when the organization produces a single product.

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

Changes in capacity may lead,lag,or straddle the demand.

Describe the theory of constraints in a sentence.

Net present value will be greater:

Fabricators,Inc.wants to increase capacity by adding a new machine.The fixed costs for machine A are $90,000,and its variable cost is $15 per unit.The revenue is $21 per unit.What is the break-even point for machine A?

Effective capacity is the:

A good capacity decision requires that it be tightly integrated with the organization's strategy and investments.But there are four other special "considerations" to making a good capacity decision.Identify them.

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

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.

What is sometimes referred to as rated 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.

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

________ is actual output as a percent of effective capacity.

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