Exam 8: Location Strategies

In the service sector, scheduling customers is a type of ________ management, while scheduling the workforce is a type of ________ management.

Christopher's Cranks uses a machine that can produce 100 cranks per hour. The firm operates 12 hours per day, five days per week. Due to regularly scheduled preventive maintenance, the firm expects the machine to be running during approximately 95% of the available time. Based on experience with other products, the firm expects to achieve an efficiency level for the cranks of 75%. What is the expected weekly output of cranks for this company?

In "drum, buffer, rope," what provides the synchronization or communication, i.e., signals between workstations?

Among the following choices, an operations manager might best evaluate political risk of a country by looking at which type of country ranking?

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 3 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 11 minutes. Station 5 can produce a unit in 8 minutes. Which station is the bottleneck station?

What are the advantages and disadvantages of the use of the factor-rating method?

A telecommunications firm is planning to lay fiber optic cable from several community college distance learning sites to a central studio, in such a way that the miles of cable are minimized. Some locations require more than one set of cables (these are the loads). Where should the studio be located to accomplish the objective?

Which of the following is FALSE regarding capacity expansion?

Which of the following statements regarding the center-of-gravity method is FALSE?

A manufacturing firm is considering three potential locations for a new parts manufacturing facility. A consulting firm has assessed three sites based on the four factors supplied by management as critical to the location's success. Given the management-supplied factor weights and the consultant team scores, which location should be selected? Scores are based on 50 = best.

Identify the six tactics for matching capacity to demand.

A firm is about to undertake the manufacture of a product, and it 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?

A product is currently made in a process-focused shop, where fixed costs are $9,000 per year and variable cost is $50 per unit. The firm sells the product for $150 per unit. What is the break-even point for this operation? What is the profit (or loss) on a demand of 200 units per year?

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 are the four limitations of the net present value technique?

A manager has received an analysis of several cities being considered for a new order fulfillment center (warehouse) for the Shop at Home Network. The scores (scale is 10 points = best) are contained in the table below. (a) If the manager weights the factors equally, how would the locations be ranked? (b) If transportation costs and real estate costs are given weights that are triple the weights of the others, should the locations be ranked differently?

Consider the simple 3-station assembly line illustrated below, where the 2 machines at Station 1 are parallel, i.e., the product only needs to go through one of the 2 machines before proceeding to Station 2. What is the bottleneck time of this process?

Location decisions are based on many things, including costs, revenues, incentives, attitudes, intangibles, and ethical considerations.

A new machine tool is expected to generate receipts as follows: $5,000 in year one; $3,000 in year two, nothing in the next year, and $2,000 in the fourth year. At an interest rate of 6%, what is the net present value of these receipts? Is this a better net present value than $2,500 each year over four years? Explain.

Which of the following is one of the four principles of bottleneck management?