Question 1

Possible decision alternatives found in capacity EMV problems are future demands or market favorability.

Accepted Answer

A) True 
 B)False

Question 2

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 85%. What is the expected weekly output of cranks for this company?

Accepted Answer

A)  5100 
B)  5700 
C)  4845 
D)  969 
E)  6783 
A)  5100 
B)  5700 
C)  4845 
D)  969 
E)  6783

Question 3

Which of the following represents a common way to manage capacity in the service sector?

Accepted Answer

A)  appointments 
B)  reservations 
C)  changes in staffing levels 
D)  first-come, first served service rule 
E)  "early bird" specials in restaurants 
A)  appointments 
B)  reservations 
C)  changes in staffing levels 
D)  first-come, first served service rule 
E)  "early bird" specials in restaurants

Question 4

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 5

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 6

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 7

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 8

Health Care Systems of the South is about to buy an expensive piece of diagnostic equipment. The company estimates that it will generate uniform revenues of $500,000 for each of the next eight years. What is the present value of this stream of earnings, at an interest rate of 6%?
 What is the present value if the machine lasts only six years, not eight?
 If the equipment cost $2,750,000, should the company purchase it?

Accepted Answer

S = R * X = 500,000 * 6.210 = $3,105,000

Question 9

A work system has five stations that have process times of 5, 9, 4, 9, and 8. What is the process time of the system?

Accepted Answer

A)  4 
B)  9 
C)  18 
D)  35 
E)  none of the above 
A)  4 
B)  9 
C)  18 
D)  35 
E)  none of the above

Question 10

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 11

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

Accepted Answer

Throughput

Question 12

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 $200 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?

Accepted Answer

BEP = 60 units; TR =

Question 13

Utilization will always be lower than efficiency because

Accepted Answer

A)  Effective capacity is less than design capacity. 
B)  Effective capacity is greater than design capacity. 
C)  Effective capacity equals design capacity. 
D)  False, Utilization and efficiency are equal in value. 
E)  False, Utilization is normally greater than efficiency. 
A)  Effective capacity is less than design capacity. 
B)  Effective capacity is greater than design capacity. 
C)  Effective capacity equals design capacity. 
D)  False, Utilization and efficiency are equal in value. 
E)  False, Utilization is normally greater than efficiency.

Question 14

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 15

A common method used to increase capacity with a lag strategy is

Accepted Answer

A)  overtime 
B)  subcontractors 
C)  new facilities 
D)  new machinery 
E)  A and B 
A)  overtime 
B)  subcontractors 
C)  new facilities 
D)  new machinery 
E)  A and B

Question 16

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 in 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

Question 17

An assembly line has 10 stations with process times of 1, 2, 3, 4, …, 10 respectively. The process time of the system is

Accepted Answer

A)  18.18% of the process cycle time 
B)  100% of the process cycle time 
C)  550% of the process cycle time 
D)  50% of the process cycle time 
E)  none of the above 
A)  18.18% of the process cycle time 
B)  100% of the process cycle time 
C)  550% of the process cycle time 
D)  50% of the process cycle time 
E)  none of the above

Question 18

Multiproduct break-even analysis calculates the __________ of each product, __________ it in proportion to each product's share of total sales.

Accepted Answer

contributi

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

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

Possible decision alternatives found in capacity EMV problems are future demands or market favorability.

Which of the following represents a common way to manage capacity in the service sector?

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.

Break-even is the number of units at which

A work system has five stations that have process times of 5, 9, 4, 9, and 8. What is the process time of the system?

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

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

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 $200 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?

Utilization will always be lower than efficiency because

Net present value

A common method used to increase capacity with a lag strategy is

An assembly line has 10 stations with process times of 1, 2, 3, 4, …, 10 respectively. The process time of the system is

Multiproduct break-even analysis calculates the of each product, it in proportion to each product's share of total sales.

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

Operations and Productivity

Operations Strategy in a Global Environment

Project Management

Forecasting

Design of Goods and Services

Managing Quality

Statistical Process Control

Process Strategy

Location Strategies

Layout Strategies

Human Resources, Job Design, and Work Measurement

Supply-Chain Management

Outsourcing as a Supply-Chain Strategy

Inventory Management

Aggregate Planning

Material Requirements Planning MRP and ERP

Short-Term Scheduling

Just-In-Time and Lean Options

Maintenance and Reliability

Decision-Making Tools

Linear Programming

Transportation Models

Waiting-Line Models

Learning Curves

Simulation

Filters

Exam9: Capacity and Constraint Management

Possible decision alternatives found in capacity EMV problems are future demands or market favorability.

Which of the following represents a common way to manage capacity in the service sector?

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.

Break-even is the number of units at which

A work system has five stations that have process times of 5, 9, 4, 9, and 8. What is the process time of the system?

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

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

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 $200 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?

Utilization will always be lower than efficiency because

Net present value

A common method used to increase capacity with a lag strategy is

An assembly line has 10 stations with process times of 1, 2, 3, 4, …, 10 respectively. The process time of the system is

Multiproduct break-even analysis calculates the __________ of each product, __________ it in proportion to each product's share of total sales.

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

Operations and Productivity

Operations Strategy in a Global Environment

Project Management

Forecasting

Design of Goods and Services

Managing Quality

Statistical Process Control

Process Strategy

Location Strategies

Layout Strategies

Human Resources, Job Design, and Work Measurement

Supply-Chain Management

Outsourcing as a Supply-Chain Strategy

Inventory Management

Aggregate Planning

Material Requirements Planning MRP and ERP

Short-Term Scheduling

Just-In-Time and Lean Options

Maintenance and Reliability

Decision-Making Tools

Linear Programming

Transportation Models

Waiting-Line Models

Learning Curves

Simulation

Filters

Multiproduct break-even analysis calculates the of each product, it in proportion to each product's share of total sales.