Question 1

Which of the following statements regarding fixed costs is TRUE?

Accepted Answer

A) Fixed costs rise by a constant amount for every added unit of volume. 
B) While fixed costs are ordinarily constant with respect to volume,they can "step" upward if volume increases result in additional fixed costs. 
C) Fixed costs are those costs associated with direct labor and materials. 
D) Fixed costs equal variable costs at the break-even point. 
E) Fixed cost is the difference between selling price and variable cost. 
A) Fixed costs rise by a constant amount for every added unit of volume. 
B) While fixed costs are ordinarily constant with respect to volume,they can "step" upward if volume increases result in additional fixed costs. 
C) Fixed costs are those costs associated with direct labor and materials. 
D) Fixed costs equal variable costs at the break-even point. 
E) Fixed cost is the difference between selling price and variable cost.

Question 2

________ is actual output as a percent of effective capacity.

Accepted Answer

The answer of ________ is actual output as a percent...

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

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 5

A firm produces three products in a repetitive process facility.Product A sells for $60; its variable costs are $20.Product B sells for $200; its variable costs are $80.Product C sells for $25; its variable costs are $15.The firm has annual fixed costs of $320,000.Last year,the firm sold 1000 units of A,2000 units of B,and 10,000 units of C.Calculate the break-even point of the firm.The firm has some idle capacity at these volumes,and chooses to cut the selling price of A from $60 to $45,believing that its sales volume will rise from 1000 units to 2500 units.What is the revised break-even point?

Accepted Answer

Calculations for the original version of

Question 6

What is a common method used to increase capacity with a lag strategy?

Accepted Answer

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

Question 7

TOC was popularized by:

Accepted Answer

A) Goldratt and Cox. 
B) Ford. 
C) Taguchi. 
D) Deming. 
E) Motorola and GE. 
A) Goldratt and Cox. 
B) Ford. 
C) Taguchi. 
D) Deming. 
E) Motorola and GE.

Question 8

Which of the following costs would be incurred even if no units were produced?

Accepted Answer

A) raw material costs 
B) direct labor costs 
C) transportation costs 
D) building rental costs 
E) purchasing costs 
A) raw material costs 
B) direct labor costs 
C) transportation costs 
D) building rental costs 
E) purchasing costs

Question 9

Explain the importance of a bottleneck operation in a production sequence.

Accepted Answer

A bottleneck operation is the

Question 10

A firm sells two products.Product R sells for $20; its variable cost is $6.Product S sells for $50; its variable cost is $30.Product R accounts for 60 percent of the firm's sales,while S accounts for 40 percent.The firm's fixed costs are $4 million annually.Calculate the firm's break-even point in dollars.

Accepted Answer

The contribution for product R is 70 per

Question 11

Which of the following represents an aggressive approach to demand management in the service sector when demand and capacity are not particularly well matched?

Accepted Answer

A) lower resort hotel room prices on Wednesdays 
B) appointments 
C) reservations 
D) first-come,first-served rule 
E) none of the above 
A) lower resort hotel room prices on Wednesdays 
B) appointments 
C) reservations 
D) first-come,first-served rule 
E) none of the above

Question 12

Describe how EMV might be used to analyze a capacity decision.

Accepted Answer

The EMV for each capacity decision (perh

Question 13

A useful tactic for increasing capacity is to redesign a product in order to facilitate more throughput.

Accepted Answer

A) True 
 B)False

Question 14

In "drum,buffer,rope," what provides the schedule,i.e.the pace of production?

Accepted Answer

A) drum 
B) buffer 
C) rope 
D) all three of the above in combination 
E) none of the above 
A) drum 
B) buffer 
C) rope 
D) all three of the above in combination 
E) none of the above

Question 15

What is sometimes referred to as rated capacity?

Accepted Answer

A) efficiency 
B) utilization 
C) effective capacity 
D) expected output 
E) design capacity 
A) efficiency 
B) utilization 
C) effective capacity 
D) expected output 
E) design capacity

Question 16

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

Accepted Answer

A) 4 
B) 9 
C) 18 
D) 35 
E) 7 
A) 4 
B) 9 
C) 18 
D) 35 
E) 7

Question 17

Adding a complementary product to what is currently being produced is a demand management strategy used when:

Accepted Answer

A) demand exceeds capacity. 
B) capacity exceeds demand for a product that has stable demand. 
C) the existing product has seasonal or cyclical demand. 
D) price increases have failed to bring about demand management. 
E) efficiency exceeds 100 percent. 
A) demand exceeds capacity. 
B) capacity exceeds demand for a product that has stable demand. 
C) the existing product has seasonal or cyclical demand. 
D) price increases have failed to bring about demand management. 
E) efficiency exceeds 100 percent.

Question 18

A tortilla chip workstation produces 1,000 chips in 20 seconds.What is its bottleneck time?

Accepted Answer

A) .02 seconds per chip 
B) 50 chips per second 
C) 20 seconds 
D) 6000 chips per minute 
E) 20,000 seconds 
A) .02 seconds per chip 
B) 50 chips per second 
C) 20 seconds 
D) 6000 chips per minute 
E) 20,000 seconds

Question 19

TOC strives to reduce the effect of constraints by:

Accepted Answer

A) offloading work from constrained workstations. 
B) increasing constrained workstation capability. 
C) changing workstation order to reduce throughput time. 
D) A and B 
E) A,B,and C 
A) offloading work from constrained workstations. 
B) increasing constrained workstation capability. 
C) changing workstation order to reduce throughput time. 
D) A and B 
E) A,B,and C

Question 20

Why is the capacity decision important?

Accepted Answer

The capacity decision is important for s

Exam 8: Capacity and Constraint Management

Which of the following statements regarding fixed costs is TRUE?

________ is actual output as a percent of effective capacity.

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

What is a common method used to increase capacity with a lag strategy?

TOC was popularized by:

Which of the following costs would be incurred even if no units were produced?

Explain the importance of a bottleneck operation in a production sequence.

Which of the following represents an aggressive approach to demand management in the service sector when demand and capacity are not particularly well matched?

Describe how EMV might be used to analyze a capacity decision.

A useful tactic for increasing capacity is to redesign a product in order to facilitate more throughput.

In "drum,buffer,rope," what provides the schedule,i.e.the pace of production?

What is sometimes referred to as rated capacity?

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

Adding a complementary product to what is currently being produced is a demand management strategy used when:

A tortilla chip workstation produces 1,000 chips in 20 seconds.What is its bottleneck time?

TOC strives to reduce the effect of constraints by:

Why is the capacity decision important?

Operations and Productivity

Operations Strategy in a Global Environment

Project Management

Forecasting

Design of Goods and Services

Managing Quality

Process Strategy

Location Strategies

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Human Resources, job Design, and Work Measurement

Supply Chain Management

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Aggregate Planning and Sop

Material Requirements Planning Mrpand Erp

Short-Term Scheduling

Jit, tps, and Lean Operations

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Sustainability in the Supply Chain

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