Question 1

Describe the types of short-range,the medium-range,and the long-range capacity decisions.

Accepted Answer

Short-range: Decisions are constrained by aggregate planning and facility decisions.Allocate the available capacity by assigning it to specific activities. Medium-range: Determine the workforce level and production output level within the facility capacity available. Long-range: Obtain physical capacity that must be planned,developed,and constructed before its intended use.

Question 2

The most popular type of facility used by Fortune 500 companies is:

Accepted Answer

A) Product-focused 
B) Process-focused 
C) Market-focused 
D) General-purpose 
A) Product-focused 
B) Process-focused 
C) Market-focused 
D) General-purpose A

Question 3

A wait-and-see facility approach uses a positive capacity cushion.

Accepted Answer

A) True 
 B)False  False

Question 4

It is possible in the short term for a firm to operate above 100% utilization.

Accepted Answer

A) True 
 B)False

Question 5

Aggregate planning costs do NOT include:

Accepted Answer

A) Hiring and layoff costs 
B) Part-time labor costs 
C) Subcontracting costs 
D) Inventory ordering costs 
A) Hiring and layoff costs 
B) Part-time labor costs 
C) Subcontracting costs 
D) Inventory ordering costs

Question 6

Which of the following statements regarding capacity is NOT true?

Accepted Answer

A) Capacity can be measured in several units such as hours of output,number of units produced,number of customers served,etc. 
B) Effective capacity is generally less than the theoretical capacity. 
C) Capacity is the maximum output that could be produced over a period of time. 
D) The 'maximum output' of a process is not a meaningful measure. 
A) Capacity can be measured in several units such as hours of output,number of units produced,number of customers served,etc. 
B) Effective capacity is generally less than the theoretical capacity. 
C) Capacity is the maximum output that could be produced over a period of time. 
D) The 'maximum output' of a process is not a meaningful measure.

Question 7

A firm produces 12 different services and has capacity to service 360,000 customers per year.A total of 24 service workers are employed.If 270,000 customers receive service during a particular year,what is the capacity cushion during that year?

Accepted Answer

A) 25% 
B) 50% 
C) 75% 
D) There is not enough information to determine the answer 
A) 25% 
B) 50% 
C) 75% 
D) There is not enough information to determine the answer

Question 8

Which of the following statement(s)correctly describes aggregate planning?

Accepted Answer

A) Aggregate planning is concerned with matching supply and demand of output. 
B) Aggregate planning determines not only the output levels planned but also the appropriate resource mix to be used. 
C) The aim of aggregate planning is to set overall output levels for the medium-range future. 
D) All of the above 
A) Aggregate planning is concerned with matching supply and demand of output. 
B) Aggregate planning determines not only the output levels planned but also the appropriate resource mix to be used. 
C) The aim of aggregate planning is to set overall output levels for the medium-range future. 
D) All of the above

Question 9

Facilities decisions:

Accepted Answer

A) Are medium-range capacity decisions 
B) Should consider one of the five crucial questions of how much,how large,when,where,and what type 
C) Constrain all other capacity decisions 
D) Require planning for one year only 
A) Are medium-range capacity decisions 
B) Should consider one of the five crucial questions of how much,how large,when,where,and what type 
C) Constrain all other capacity decisions 
D) Require planning for one year only

Question 10

Why is it dangerous to justify capacity expansion using economies of scale?

Accepted Answer

A) It is far too specific to use as a basis for capacity decisions 
B) Because volume,capacity,and process considerations are looked at individually 
C) Because the common notion that unit costs decline for larger facilities due to size is not always accurate 
D) It requires consideration of quality,dependability,and flexibility 
A) It is far too specific to use as a basis for capacity decisions 
B) Because volume,capacity,and process considerations are looked at individually 
C) Because the common notion that unit costs decline for larger facilities due to size is not always accurate 
D) It requires consideration of quality,dependability,and flexibility

Question 11

Aggregate planning differs from scheduling in that:

Accepted Answer

A) The former refers to the long-range and the latter refers to the short-range. 
B) The former is concerned with allocating available resources and the latter with the acquisition of resources. 
C) The former refers to the long-range and the latter refers to the medium-range. 
D) The former is concerned with the acquisition of resources and the latter with allocating available resources. 
A) The former refers to the long-range and the latter refers to the short-range. 
B) The former is concerned with allocating available resources and the latter with the acquisition of resources. 
C) The former refers to the long-range and the latter refers to the medium-range. 
D) The former is concerned with the acquisition of resources and the latter with allocating available resources.

Question 12

Facilities Planning,Aggregate Planning,and Scheduling form a hierarchy of decisions extending from long-range to medium-range to short-range,respectively,concerning the capacity of operations.

Accepted Answer

A) True 
 B)False

Question 13

Under a level strategy,variations in demand are managed by:

Accepted Answer

A) Varying the number of workers 
B) Using advertising and price changes 
C) Varying inventory levels 
D) All of the above 
A) Varying the number of workers 
B) Using advertising and price changes 
C) Varying inventory levels 
D) All of the above

Question 14

The type of strategy used with respect to the amount of capacity cushion when "the cost or consequence of running out is approximately in balance with the cost of excess capacity" is called:

Accepted Answer

A) Small cushion 
B) Large cushion 
C) Moderate cushion 
D) None of the above 
A) Small cushion 
B) Large cushion 
C) Moderate cushion 
D) None of the above

Question 15

A large capacity cushion is appropriate when:

Accepted Answer

A) A make-to-stock process is used 
B) A firm is attempting to capture market share in a growing industry 
C) The market for its products or services is shrinking 
D) A firm wants its capacity to match average demand 
A) A make-to-stock process is used 
B) A firm is attempting to capture market share in a growing industry 
C) The market for its products or services is shrinking 
D) A firm wants its capacity to match average demand

Question 16

Which of the following statements is true about facilities decisions?

Accepted Answer

A) They are generally short-range in nature. 
B) They are not critical as they only determine future availability of output. 
C) They involve all organizational units and are often made at the highest corporate level. 
D) They are simple and easy to analyze. 
A) They are generally short-range in nature. 
B) They are not critical as they only determine future availability of output. 
C) They involve all organizational units and are often made at the highest corporate level. 
D) They are simple and easy to analyze.

Question 17

The aggregate planning problem:

Accepted Answer

A) Should only consider supply management options 
B) Only affects marketing and production,but human resources is not involved in decisions 
C) Should only consider demand management options 
D) Needs to consider multiple tradeoffs such as customer service level,inventory levels,labor force stability,and costs 
A) Should only consider supply management options 
B) Only affects marketing and production,but human resources is not involved in decisions 
C) Should only consider demand management options 
D) Needs to consider multiple tradeoffs such as customer service level,inventory levels,labor force stability,and costs

Question 18

One option for altering the pattern of demand through aggregate planning is:

Accepted Answer

A) Using overtime 
B) Carrying inventory 
C) Subcontracting 
D) Pricing 
A) Using overtime 
B) Carrying inventory 
C) Subcontracting 
D) Pricing

Question 19

The ABC Cement Corporation produces a high quality cement that is supplied to construction companies.The potential demand and the probability of each potential demand quantity are given for the upcoming year. $$\begin{array} { | c | c | } 
\hline \text { Dernand in tons } & \text { Probability } \
\hline 500,000 & 0.3 \
\hline 250,000 & 0.4 \
\hline 300,000 & 0.3 \
\hline
\end{array}$$ Assuming manufacturing capacity of 700,000 tons,the estimated capacity cushion is:

Accepted Answer

A) 340,000 tons 
B) 360,000 tons 
C) >1,000,000 tons 
D) It cannot be computed from this information 
A) 340,000 tons 
B) 360,000 tons 
C) >1,000,000 tons 
D) It cannot be computed from this information

Question 20

One way of leveling a seasonal demand pattern is by developing complementary products or services.

Accepted Answer

A) True 
 B)False

Describe the types of short-range,the medium-range,and the long-range capacity decisions.

The most popular type of facility used by Fortune 500 companies is:

A wait-and-see facility approach uses a positive capacity cushion.

It is possible in the short term for a firm to operate above 100% utilization.

Aggregate planning costs do NOT include:

Which of the following statements regarding capacity is NOT true?

A firm produces 12 different services and has capacity to service 360,000 customers per year.A total of 24 service workers are employed.If 270,000 customers receive service during a particular year,what is the capacity cushion during that year?

Which of the following statement(s)correctly describes aggregate planning?

Facilities decisions:

Why is it dangerous to justify capacity expansion using economies of scale?

Aggregate planning differs from scheduling in that:

Facilities Planning,Aggregate Planning,and Scheduling form a hierarchy of decisions extending from long-range to medium-range to short-range,respectively,concerning the capacity of operations.

Under a level strategy,variations in demand are managed by:

The type of strategy used with respect to the amount of capacity cushion when "the cost or consequence of running out is approximately in balance with the cost of excess capacity" is called:

A large capacity cushion is appropriate when:

Which of the following statements is true about facilities decisions?

The aggregate planning problem:

One option for altering the pattern of demand through aggregate planning is:

One way of leveling a seasonal demand pattern is by developing complementary products or services.

The Operations Function

Operations and Supply Chain Strategy

Product Design

Process Selection

Service Delivery System Design

Process-Flow Analysis

Lean Thinking and Lean Systems

Managing Quality

Quality Control and Improvement

Supply Chain Management

Forecasting

Scheduling Operations

Project Planning and Scheduling

Independent Demand Inventory

Materials Requirements Planning and ERP

Filters

Exam 12: Capacity Planning

Describe the types of short-range,the medium-range,and the long-range capacity decisions.

The most popular type of facility used by Fortune 500 companies is:

A wait-and-see facility approach uses a positive capacity cushion.

It is possible in the short term for a firm to operate above 100% utilization.

Aggregate planning costs do NOT include:

Which of the following statements regarding capacity is NOT true?

A firm produces 12 different services and has capacity to service 360,000 customers per year.A total of 24 service workers are employed.If 270,000 customers receive service during a particular year,what is the capacity cushion during that year?

Which of the following statement(s)correctly describes aggregate planning?

Facilities decisions:

Why is it dangerous to justify capacity expansion using economies of scale?

Aggregate planning differs from scheduling in that:

Facilities Planning,Aggregate Planning,and Scheduling form a hierarchy of decisions extending from long-range to medium-range to short-range,respectively,concerning the capacity of operations.

Under a level strategy,variations in demand are managed by:

The type of strategy used with respect to the amount of capacity cushion when "the cost or consequence of running out is approximately in balance with the cost of excess capacity" is called:

A large capacity cushion is appropriate when:

Which of the following statements is true about facilities decisions?

The aggregate planning problem:

One option for altering the pattern of demand through aggregate planning is:

One way of leveling a seasonal demand pattern is by developing complementary products or services.

The Operations Function

Operations and Supply Chain Strategy

Product Design

Process Selection

Service Delivery System Design

Process-Flow Analysis

Lean Thinking and Lean Systems

Managing Quality

Quality Control and Improvement

Supply Chain Management

Forecasting

Scheduling Operations

Project Planning and Scheduling

Independent Demand Inventory

Materials Requirements Planning and ERP

Filters