Question 1

The total time that a typical item spends in any process,termed the throughput time,decreases as the average level of work-in-process inventory in the process increases.

Accepted Answer

A) True 
 B)False  False

Question 2

Musk L.Flexor owns a hot tub store that is experiencing significant growth.Flexor is trying to decide whether to expand its capacity,which currently is at $750,000 in sales per quarter.He is thinking about expanding to the $850,000 level.The before-tax profit from additional sales is 20 percent.Sales are seasonal,with peaks in the spring and summer quarters.Forecasts of capacity requirements,expressed in sales per quarter,for next year (year 2)are:   Demand in year 3 and beyond is expected to exceed $850,000 per quarter.Flexor is considering expansion at the end of the fourth quarter of this year (year 1).How much would before-tax profits in year 2 increase because of this expansion?

Accepted Answer

A) less than $28,000 
B) more than $28,000 but less than $32,000 
C) more than $32,000 but less than $36,000 
D) more than $36,000 
A) less than $28,000 
B) more than $28,000 but less than $32,000 
C) more than $32,000 but less than $36,000 
D) more than $36,000 B

Question 3

Generally,work-in-process inventory will be greater in project and job processes than in continuous processes.

Accepted Answer

A) True 
 B)False  True

Question 4

Which one of the following statements about measuring capacity is best?

Accepted Answer

A) The utilization rate is expressed as the ratio of average output rate to either peak capacity or effective capacity. 
B) Output measures are the usual choice for flexible flow processes. 
C) Input measures are the usual choice of firms like Nissan Motor Company at its Tennessee plant. 
D) The maximum output rate for a restaurant would be the number of seats. 
A) The utilization rate is expressed as the ratio of average output rate to either peak capacity or effective capacity. 
B) Output measures are the usual choice for flexible flow processes. 
C) Input measures are the usual choice of firms like Nissan Motor Company at its Tennessee plant. 
D) The maximum output rate for a restaurant would be the number of seats.

Question 5

Increasing the overall process capacity can only occur when the capacity of the bottleneck of the process can be increased.

Accepted Answer

A) True 
 B)False

Question 6

Decision trees can be useful for evaluation capacity expansion alternatives.

Accepted Answer

A) True 
 B)False

Question 7

Utilization is calculated as the ratio of Capacity / Actual output.

Accepted Answer

A) True 
 B)False

Question 8

Which one of the following statements about capacity expansion is best?

Accepted Answer

A) The wait-and-see strategy involves small jumps in capacity compared to the expansionist strategy. 
B) The expansionist strategy involves frequent jumps in capacity compared to the wait-and-see strategy. 
C) The expansionist strategy minimizes risk. 
D) The follow-the-leader strategy can help a firm gain a competitive advantage. 
A) The wait-and-see strategy involves small jumps in capacity compared to the expansionist strategy. 
B) The expansionist strategy involves frequent jumps in capacity compared to the wait-and-see strategy. 
C) The expansionist strategy minimizes risk. 
D) The follow-the-leader strategy can help a firm gain a competitive advantage.

Question 9

The expansionist strategy refers to a condition which involves large,frequent jumps in capacity.

Accepted Answer

A) True 
 B)False

Question 10

Which one of the following statements about measuring capacity is best?

Accepted Answer

A) The utilization rate is expressed as the ratio of maximum output rate to capacity. 
B) The minimum output rate for a restaurant would be the number of seats. 
C) Peak capacity is the output that a facility can sustain under normal conditions. 
D) A line flow process usually measures its capacity in terms of output rates. 
A) The utilization rate is expressed as the ratio of maximum output rate to capacity. 
B) The minimum output rate for a restaurant would be the number of seats. 
C) Peak capacity is the output that a facility can sustain under normal conditions. 
D) A line flow process usually measures its capacity in terms of output rates.

Question 11

Setup time is the time required to change a machine from making one product or service to making another.

Accepted Answer

A) True 
 B)False

Question 12

Capacity decisions are usually linked with other decision areas.If a system is well balanced,which one of the following changes requires a larger-capacity cushion?

Accepted Answer

A) Yield losses in the production process are reduced. 
B) Schedules for production are more stable. 
C) The capital intensity of the process is increased. 
D) The company promises faster delivery times to customers. 
A) Yield losses in the production process are reduced. 
B) Schedules for production are more stable. 
C) The capital intensity of the process is increased. 
D) The company promises faster delivery times to customers.

Question 13

Table 4.3
The North Bend Manufacturing Company is producing two types of products,A and B.Demand forecasts for next year and other production-related information are provided in the following table:   Both products A and B are produced at the same operation called MASAC27A.
-Use the information in Table 4.3 to help answer this question.Additionally,the company works 250 days every year and operates 2 shifts,each of which covers 8 hours.If a 25 percent capacity cushion is maintained,how many machines does the company need next year to fully cover the demand?

Accepted Answer

A) less than 13 machines 
B) 13 machines 
C) 14 machines 
D) more than 14 machines 
A) less than 13 machines 
B) 13 machines 
C) 14 machines 
D) more than 14 machines

Question 14

If a system is well balanced,which one of the following changes usually calls for a smaller-capacity cushion?

Accepted Answer

A) higher customization 
B) more of a flexible flow strategy 
C) higher yield losses 
D) higher capital intensity 
A) higher customization 
B) more of a flexible flow strategy 
C) higher yield losses 
D) higher capital intensity

Question 15

An expansionist strategy in regard to capacity is best characterized by

Accepted Answer

A) reducing the risks of overly optimistic demand forecasts. 
B) expanding only when others do. 
C) emphasizing flexibility and quality while foregoing the larger market share of the lowest-cost producers. 
D) using capacity to increase a firm's market share or to act as a form of preemptive market. 
A) reducing the risks of overly optimistic demand forecasts. 
B) expanding only when others do. 
C) emphasizing flexibility and quality while foregoing the larger market share of the lowest-cost producers. 
D) using capacity to increase a firm's market share or to act as a form of preemptive market.

Question 16

Capacity gap is an addition to projected demand and current capacity.

Accepted Answer

A) True 
 B)False

Question 17

Table 4.1
The Union Manufacturing Company is producing two types of products: A and B.
The demand forecasts,batch size,and time standards follow:   Both products are produced at the same operation called Mark I.
-Use the information in Table 4.1.The company works 250 days per year and operates two shifts,each covering 8 hours.If a 15 percent capacity cushion is maintained,how many hours of capacity can the company expect from each of its Mark I machines?

Accepted Answer

A) less than 3000 
B) between 3000 and 3500 
C) between 3501 and 4000 
D) more than 4000 
A) less than 3000 
B) between 3000 and 3500 
C) between 3501 and 4000 
D) more than 4000

Question 18

The base case concept is to do nothing and simply lose orders from any demand that exceeds current capacity.

Accepted Answer

A) True 
 B)False

Question 19

In an automobile service business (e.g.a muffler shop),measuring capacity based on the number of hours that the service bays will be required to satisfy expected demand is an example of an input measure of capacity.

Accepted Answer

A) True 
 B)False

Question 20

Table 4.2
High Tech,Inc.is producing two types of products: A and B.Both are produced at the same sawing operation.Because of demand uncertainties,the operations manager obtained three demand forecasts (pessimistic,expected,and optimistic).The demand forecasts,batch sizes (units/batch),processing times (hr/unit),and setup times (hr/batch)follow.   The sawing machines operate on two 8-hour shifts,5 days per week,and 50 weeks per year.The manager wants to maintain a 10 percent capacity cushion.
-Using the information from Table 4.2,if the operation currently has 18 machines and the manager is willing to expand capacity by 20 percent through short-term options,what is the capacity gap (in terms of number of machines)if you assume the optimistic demand forecasts?

Accepted Answer

A) less than or equal to 10 
B) more than 10 but less than or equal to 12 
C) more than 12 but less than or equal to 14 
D) more than 14 
A) less than or equal to 10 
B) more than 10 but less than or equal to 12 
C) more than 12 but less than or equal to 14 
D) more than 14

The total time that a typical item spends in any process,termed the throughput time,decreases as the average level of work-in-process inventory in the process increases.

Generally,work-in-process inventory will be greater in project and job processes than in continuous processes.

Which one of the following statements about measuring capacity is best?

Increasing the overall process capacity can only occur when the capacity of the bottleneck of the process can be increased.

Decision trees can be useful for evaluation capacity expansion alternatives.

Utilization is calculated as the ratio of Capacity / Actual output.

Which one of the following statements about capacity expansion is best?

The expansionist strategy refers to a condition which involves large,frequent jumps in capacity.

Which one of the following statements about measuring capacity is best?

Setup time is the time required to change a machine from making one product or service to making another.

Capacity decisions are usually linked with other decision areas.If a system is well balanced,which one of the following changes requires a larger-capacity cushion?

If a system is well balanced,which one of the following changes usually calls for a smaller-capacity cushion?

An expansionist strategy in regard to capacity is best characterized by

Capacity gap is an addition to projected demand and current capacity.

The base case concept is to do nothing and simply lose orders from any demand that exceeds current capacity.

In an automobile service business (e.g.a muffler shop),measuring capacity based on the number of hours that the service bays will be required to satisfy expected demand is an example of an input measure of capacity.

Creating Customer Value Through Operations

Supply Chain Management

Process Configuration

Inventory Management

Quality and Process Improvement

Lean Systems

Managing Projects

Location and Layout

Managing Demand and Forecasting

Operations Planning and Scheduling

Resource Planning

Waiting Lines

Decision Making

Financial Analysis

Work Measurement

Learning Curve Analysis

Computer-Integrated Manufacturing

Acceptance Sampling Plans

Simulation

Special Inventory Models

Linear Programming

Filters

Exam 4: Capacity

The total time that a typical item spends in any process,termed the throughput time,decreases as the average level of work-in-process inventory in the process increases.

Generally,work-in-process inventory will be greater in project and job processes than in continuous processes.

Which one of the following statements about measuring capacity is best?

Increasing the overall process capacity can only occur when the capacity of the bottleneck of the process can be increased.

Decision trees can be useful for evaluation capacity expansion alternatives.

Utilization is calculated as the ratio of Capacity / Actual output.

Which one of the following statements about capacity expansion is best?

The expansionist strategy refers to a condition which involves large,frequent jumps in capacity.

Which one of the following statements about measuring capacity is best?

Setup time is the time required to change a machine from making one product or service to making another.

Capacity decisions are usually linked with other decision areas.If a system is well balanced,which one of the following changes requires a larger-capacity cushion?

If a system is well balanced,which one of the following changes usually calls for a smaller-capacity cushion?

An expansionist strategy in regard to capacity is best characterized by

Capacity gap is an addition to projected demand and current capacity.

The base case concept is to do nothing and simply lose orders from any demand that exceeds current capacity.

In an automobile service business (e.g.a muffler shop),measuring capacity based on the number of hours that the service bays will be required to satisfy expected demand is an example of an input measure of capacity.

Creating Customer Value Through Operations

Supply Chain Management

Process Configuration

Inventory Management

Quality and Process Improvement

Lean Systems

Managing Projects

Location and Layout

Managing Demand and Forecasting

Operations Planning and Scheduling

Resource Planning

Waiting Lines

Decision Making

Financial Analysis

Work Measurement

Learning Curve Analysis

Computer-Integrated Manufacturing

Acceptance Sampling Plans

Simulation

Special Inventory Models

Linear Programming

Filters