Exam 19: Capacity and Constraint Management

The Academic Computing Centre 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?

Changes in capacity may lead,lag,or straddle the demand.

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.

Which of the following approach to capacity expansion "straddles" demand?

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

The theory of constraints has its origins in

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

Capacity decisions are based on technological concerns,not demand forecasts.

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

A tortilla chip workstation produces 1,000 chips in 20 seconds.Its process time is

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

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?

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

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?

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?

TOC was popularized by

A sugar mill receives sugar cane from farmers,extracts the juice,boils it into syrup,and then crystallizes the syrup into raw sugar.There has been an ongoing consolidation of sugar mills,and an increase in the capacity of those that remain.The number of mills in Louisiana was 48 in the 1960s,was 18 in 1999 and is currently 13.In 1999 the break-even point for a typical mill was 600,000 tonnes.But as the surviving mills have added capacity,the break-even point is now 1,000,000 tonnes.In 1999,the state's farmers produced 16,000,000 tonnes of cane,but by 2004,the crop was down to 13,000,000 tonnes.Analyse this situation with what you have learned about the capacity decision.Is the industry better off with fewer but larger mills,or not?

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

Net present value

Net present value will be greater