Question 1

Define fixed costs.

Accepted Answer

Fixed costs are thos

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

A good capacity decision requires that it be tightly integrated with the organization's strategy and investments.But there are four other special "considerations" to making a good capacity decision.Identify them.

Accepted Answer

(1)Forecast demand accurately.

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Fabricators,Inc.wants to increase capacity by adding a new machine.The fixed costs for machine A are $90,000,and its variable cost is $15 per unit.The revenue is $21 per unit.What is the break-even point for machine A?

Accepted Answer

A) $90,000 dollars 
B) 90,000 units 
C) $15,000 dollars 
D) 15,000 units 
E) 4,286 units 
A) $90,000 dollars 
B) 90,000 units 
C) $15,000 dollars 
D) 15,000 units 
E) 4,286 units

Question 6

A product sells for $5,and has unit variable costs of $3.This product accounts for $20,000 in annual sales,out of the firm's total of $60,000.When performing multiproduct break-even analysis,what is the weighted contribution of this product?

Accepted Answer

A) 0.133 
B) 0.200 
C) 0.40 
D) 0.667 
E) $1.667 
A) 0.133 
B) 0.200 
C) 0.40 
D) 0.667 
E) $1.667

Question 7

Break-even analysis identifies the volume at which fixed costs and revenue are equal.

Accepted Answer

A) True 
 B)False

Question 8

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 9

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) All of the above are advantages. 
A) They are cheaper. 
B) They are more accurate. 
C) They delay capital expenditure. 
D) They increase demand. 
E) All of the above are advantages.

Question 10

A firm is weighing three capacity alternatives: small,medium,and large job shop.Whatever capacity choice is made,the market for the firm's product can be "moderate" or "strong." The probability of moderate acceptance is estimated to be 40 percent; strong acceptance has a probability of 60 percent.The payoffs are as follows.Small job shop,moderate market = $24,000; Small job shop,strong market = $54,000.Medium job shop,moderate market = $20,000; medium job shop,strong market = $64,000.Large job shop,moderate market = -$2,000; large job shop,strong market = $96,000.Which capacity choice should the firm make?

Accepted Answer

The expected values for the th

Question 11

________ is a means of determining the discounted value of a series of future cash receipts.

Accepted Answer

Net presen

Question 12

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 net 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 13

________ is the number of units a facility can hold,store,receive,or produce in a period of time.

Accepted Answer

Throughput

Question 14

A firm produces three products.Product A sells for $60; its variable costs are $20.Product B sells for $200; its variable costs are $120.Product C sells for $25; its variable costs are $10.Last year,the firm sold 1000 units of A,2000 units of B,and 10,000 units of C.The firm has fixed costs of $320,000 per year.Calculate the break-even point of the firm.

Accepted Answer

Calculations for this problem are: @#IMG-DLM& Brea

Question 15

Substantial research has proved that the only successful method of dealing with bottlenecks is to increase the bottleneck's capacity.

Accepted Answer

A) True 
 B)False

Question 16

________ cost is the cost that continues even if no units are produced.

Accepted Answer

The answer of ________ cost is the cost that continues...

Question 17

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 into 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 18

Utilization is the number of units a facility can hold,receive,store,or produce in a period of time.

Accepted Answer

A) True 
 B)False

Question 19

The theory of constraints is a body of knowledge that deals with anything that limits an organization's ability to achieve its goals.

Accepted Answer

A) True 
 B)False

Question 20

Describe the theory of constraints in a sentence.

Accepted Answer

The theory of constraints is t

Exam 8: Capacity and Constraint Management

Define fixed costs.

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

A good capacity decision requires that it be tightly integrated with the organization's strategy and investments.But there are four other special "considerations" to making a good capacity decision.Identify them.

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

Fabricators,Inc.wants to increase capacity by adding a new machine.The fixed costs for machine A are $90,000,and its variable cost is $15 per unit.The revenue is $21 per unit.What is the break-even point for machine A?

A product sells for $5,and has unit variable costs of $3.This product accounts for $20,000 in annual sales,out of the firm's total of $60,000.When performing multiproduct break-even analysis,what is the weighted contribution of this product?

Break-even analysis identifies the volume at which fixed costs and revenue are equal.

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?

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

________ is a means of determining the discounted value of a series of future cash receipts.

________ is the number of units a facility can hold,store,receive,or produce in a period of time.

Substantial research has proved that the only successful method of dealing with bottlenecks is to increase the bottleneck's capacity.

________ cost is the cost that continues even if no units are produced.

Utilization is the number of units a facility can hold,receive,store,or produce in a period of time.

The theory of constraints is a body of knowledge that deals with anything that limits an organization's ability to achieve its goals.

Describe the theory of constraints in a sentence.

Operations and Productivity

Operations Strategy in a Global Environment

Project Management

Forecasting

Design of Goods and Services

Managing Quality

Process Strategy

Location Strategies

Layout Strategies

Human Resources, job Design, and Work Measurement

Supply Chain Management

Inventory Management

Aggregate Planning and Sop

Material Requirements Planning Mrpand Erp

Short-Term Scheduling

Jit, tps, and Lean Operations

Maintenance and Reliability

Sustainability in the Supply Chain

Statistical Process Control

Supply Chain Management Analytics

Decision-Making Tools

Linear Programming

Transportation Models

Waiting-Line Models

Learning Curves

Simulation

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