Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is not one of the four principles of bottleneck management?

Accepted Answer

A)  Release work orders to the system at the bottleneck's capacity pace. 
B)  Lost time at the bottleneck is lost system capacity. 
C)  Increasing capacity at non-bottleneck stations is a mirage. 
D)  Increased bottleneck capacity is increased system capacity. 
E)  Bottlenecks should be moved to the end of the system process. 
A)  Release work orders to the system at the bottleneck's capacity pace. 
B)  Lost time at the bottleneck is lost system capacity. 
C)  Increasing capacity at non-bottleneck stations is a mirage. 
D)  Increased bottleneck capacity is increased system capacity. 
E)  Bottlenecks should be moved to the end of the system process.

Question 3

If capacity exceeds demand at a new facility, an organization can use which of the following to move demand?

Accepted Answer

A)  aggressive marketing 
B)  lower prices at all facilities 
C)  build a facility of the correct size 
D)  add a complementary product 
E)  reduce lead times 
A)  aggressive marketing 
B)  lower prices at all facilities 
C)  build a facility of the correct size 
D)  add a complementary product 
E)  reduce lead times

Question 4

The local convenience store makes personal pan pizzas. Currently, their oven can produce 50 pizzas per hour. It has a fixed cost of $2,000, and a variable cost of $0.25 per pizza. The owner is considering a bigger oven that can make 75 pizzas per hour. It has a fixed cost of $3,000, but a variable cost of $0.20 per pizza.
a. At what quantity do the two ovens have equal costs?
b. If the owner expects to sell 9,000 pizzas, should he get the new oven?

Accepted Answer

(a) The crossover is where $2,

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

Some organizations use number of beds, number of rooms, or room size to measure capacity. There's no time period in this capacity, and no "throughput." Why are these firms using such a different concept of capacity?

Accepted Answer

Student answers will vary, since the ans

Question 7

Define variable costs. What special assumption is made about variable costs in the textbook?

Accepted Answer

Variable costs are those that

Question 8

Define fixed costs.

Accepted Answer

Fixed costs are thos

Question 9

________ is actual output as a percent of effective capacity.

Accepted Answer

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

Question 10

In "drum, buffer, rope," what provides the schedule, i.e. the pace of production?

Accepted Answer

A)  drum 
B)  buffer 
C)  rope 
D)  drum, buffer, and rope combined 
E)  both buffer and rope 
A)  drum 
B)  buffer 
C)  rope 
D)  drum, buffer, and rope combined 
E)  both buffer and rope

Question 11

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 12

A common method(s) used to increase capacity with a lag strategy is/are

Accepted Answer

A)  overtime and subcontractors. 
B)  subcontractors and new facilities. 
C)  new facilities and new machinery. 
D)  new machinery and overtime. 
E)  turning away customers. 
A)  overtime and subcontractors. 
B)  subcontractors and new facilities. 
C)  new facilities and new machinery. 
D)  new machinery and overtime. 
E)  turning away customers.

Question 13

In the service sector, scheduling customers is ________, and scheduling the workforce is ________.

Accepted Answer

demand man

Question 14

The staff training centre 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 centre 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 15

Identify the tactics for matching capacity to demand.

Accepted Answer

1. Making staffing changes (increasing o

Question 16

A fabrication company 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 $21 per unit. If the estimated output is 5000 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 17

A sugar mill receives sugar cane from farmers, extracts the juice, boils it into syrup, and then crystallizes the syrup into raw sugar. There has been an ongoing consolidation of sugar mills, and an increase in the capacity of those that remain. The number of mills in Louisiana was 48 in the 1960s, was 18 in 1999 and is currently 13. In 1999 the break-even point for a typical mill was 600,000 tonnes. But as the surviving mills have added capacity, the break-even point is now 1,000,000 tonnes. In 1999, the state's farmers produced 16,000,000 tonnes of cane, but by 2004, the crop was down to 13,000,000 tonnes. Analyse this situation with what you have learned about the capacity decision. Is the industry better off with fewer but larger mills, or not?

Accepted Answer

There are several possible paths student

Question 18

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 19

A fleet repair facility has the capacity to repair 800 trucks per month. However, due to scheduled maintenance of their equipment, management feels that they can repair no more than 600 trucks per month. Last month, two of the employees were absent several days each, and only 400 trucks were repaired. What are the utilization and efficiency of the repair shop?

Accepted Answer

Design Capacity = 800 trucks
E

Question 20

Lag and straddle strategies for increasing capacity have what main advantage over a leading strategy?

Accepted Answer

A)  They are cheaper. 
B)  They are more accurate. 
C)  They delay capital expenditure. 
D)  They increase demand. 
E)  They increase the need for capital expenditure. 
A)  They are cheaper. 
B)  They are more accurate. 
C)  They delay capital expenditure. 
D)  They increase demand. 
E)  They increase the need for capital expenditure.

Exam 27: Capacity and Constraint Management

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

Which of the following is not one of the four principles of bottleneck management?

If capacity exceeds demand at a new facility, an organization can use which of the following to move demand?

Some organizations use number of beds, number of rooms, or room size to measure capacity. There's no time period in this capacity, and no "throughput." Why are these firms using such a different concept of capacity?

Define variable costs. What special assumption is made about variable costs in the textbook?

Define fixed costs.

________ is actual output as a percent of effective capacity.

In "drum, buffer, rope," what provides the schedule, i.e. the pace of production?

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?

A common method(s) used to increase capacity with a lag strategy is/are

In the service sector, scheduling customers is ________, and scheduling the workforce is ________.

Identify the tactics for matching capacity to demand.

The theory of constraints has its origins in

Lag and straddle strategies for increasing capacity have what main advantage over a leading strategy?

Operations and Productivity

Operations Strategy in a Global Environment

Project Management

Forecasting

Design of Goods and Services

Managing Quality

Process Strategy and Sustainability

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

Lean Operations

Maintenance and Reliability

Decision-Making Tools

Linear Programming

Transportation Models

Waiting-Line Models

Learning Curves

Simulation

Supply Chain Management Analytics

Sustainability in the Supply Chain

Statistical Process Control

Filters

In the service sector, scheduling customers is , and scheduling the workforce is .