Question 1

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

Accepted Answer

The EMV for each capacity decision (perh

Question 2

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 which 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%. 
A) demand exceeds capacity. 
B) capacity exceeds demand for a product which 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%.

Question 3

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

Question 4

Break-even is the number of units at which

Accepted Answer

A) total revenue equals price times quantity. 
B) total revenue equals total variable cost. 
C) total revenue equals total fixed cost. 
D) total profit equals total cost. 
E) total revenue equals total cost. 
A) total revenue equals price times quantity. 
B) total revenue equals total variable cost. 
C) total revenue equals total fixed cost. 
D) total profit equals total cost. 
E) total revenue equals total cost.

Question 5

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) inexpensive rates for weekend phone calls 
B) appointments 
C) reservations 
D) first-come,first-served 
E) self-serve 
A) inexpensive rates for weekend phone calls 
B) appointments 
C) reservations 
D) first-come,first-served 
E) self-serve

Question 6

To find the process cycle time with simultaneous processes,compute the time over all paths and choose the shortest path through the system.

Accepted Answer

A) True 
 B)False

Question 7

What is the fundamental distinction between design capacity and effective capacity? Provide a brief example.

Accepted Answer

Design capacity is the theoretical maxim

Question 8

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

Accepted Answer

A bottleneck operation is one

Question 9

Basic break-even analysis typically assumes that

Accepted Answer

A) revenues increase in direct proportion to the volume of production,while costs increase at a decreasing rate as production volume increases. 
B) variable costs and revenues increase in direct proportion to the volume of production. 
C) both costs and revenues are made up of fixed and variable portions. 
D) costs increase in direct proportion to the volume of production,while revenues increase at a decreasing rate as production volume increases because of the need to give quantity discounts. 
E) All of the above are assumptions in the basic break-even model. 
A) revenues increase in direct proportion to the volume of production,while costs increase at a decreasing rate as production volume increases. 
B) variable costs and revenues increase in direct proportion to the volume of production. 
C) both costs and revenues are made up of fixed and variable portions. 
D) costs increase in direct proportion to the volume of production,while revenues increase at a decreasing rate as production volume increases because of the need to give quantity discounts. 
E) All of the above are assumptions in the basic break-even model.

Question 10

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,the weighted contribution of this product is approximately

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 11

________ analysis finds the point at which costs equals revenues.

Accepted Answer

The answer of ________ analysis finds the point at which...

Question 12

The three main strategies for increasing capacity are

Accepted Answer

A) leading,lag,straddle. 
B) fast,normal,slow. 
C) before,during,after. 
D) leading,behind,mixed. 
E) over,under,even. 
A) leading,lag,straddle. 
B) fast,normal,slow. 
C) before,during,after. 
D) leading,behind,mixed. 
E) over,under,even.

Question 13

A graphic design studio is considering three new computers.The first model,A,costs $5000.Model B and C cost $3000 and $1000 respectively.If each customer provides $50 of revenue and variable costs are $20/customer,find the number of customers required for each model to break even.

Accepted Answer

A: BEP = 5000/(50 - 20)= 166.6

Question 14

In "drum,buffer,rope," the ________ acts like kanban signals.

Accepted Answer

The answer of In "drum,buffer,rope," the ________ acts like kanban...

Question 15

A factory outputs 1000 units a month.If design capacity is 3000 and efficiency is 50% find utilization and effective capacity.

Accepted Answer

Output = Utilization ∗ Design Capacity g

Question 16

An organization whose capacity is on that portion of the average unit cost curve that falls as output rises

Accepted Answer

A) has a facility that is below optimum operating level and should build a larger facility. 
B) has a facility that is above optimum operating level and should build a smaller facility. 
C) is suffering from diseconomies of scale. 
D) has utilization higher than efficiency. 
E) has efficiency higher than utilization. 
A) has a facility that is below optimum operating level and should build a larger facility. 
B) has a facility that is above optimum operating level and should build a smaller facility. 
C) is suffering from diseconomies of scale. 
D) has utilization higher than efficiency. 
E) has efficiency higher than utilization.

Question 17

Advantage Milling Devices is preparing to buy a new machine for precision milling of special metal alloys.This device can earn $300 per hour,and can run 3,000 hours per year.The machine is expected to be this productive for four years.If the interest rate is 6%,what is the present value? What is the present value if the interest rate is not 6%,but 9%? Why does present value fall when interest rates rise?

Accepted Answer

S = R ∗ X = 300 ∗ 3,000 ∗ 3.46

Question 18

Consider a production line with five stations.Station 1 can produce a unit in 9 minutes.Station 2 can produce a unit in 10 minutes.Station three has two identical machines,each of which can process a unit in 12 minutes (each unit only needs to be processed on one of the two machines).Station 4 can produce a unit in 5 minutes.Station 5 can produce a unit in 8 minutes.Which station is the bottleneck station?

Accepted Answer

A) station 1 
B) station 2 
C) station 3 
D) station 4 
E) station 5 
A) station 1 
B) station 2 
C) station 3 
D) station 4 
E) station 5

Question 19

The basic break-even model can be modified to handle more than one product.This extension of the basic model requires

Accepted Answer

A) price and sales volume for each product. 
B) price and variable cost for each product,and the percent of sales that each product represents. 
C) that the firm have very low fixed costs. 
D) that the ratio of variable cost to price be the same for all products. 
E) sales volume for each product. 
A) price and sales volume for each product. 
B) price and variable cost for each product,and the percent of sales that each product represents. 
C) that the firm have very low fixed costs. 
D) that the ratio of variable cost to price be the same for all products. 
E) sales volume for each product.

Question 20

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) They increase the need for capital expenditure. 
A) They are cheaper. 
B) They are more accurate. 
C) They delay capital expenditure. 
D) They increase demand. 
E) They increase the need for capital expenditure.

Exam 19: Capacity and Constraint Management

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

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

TOC strives to reduce the effect of constraints by

Break-even is the number of units at which

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

To find the process cycle time with simultaneous processes,compute the time over all paths and choose the shortest path through the system.

What is the fundamental distinction between design capacity and effective capacity? Provide a brief example.

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

Basic break-even analysis typically assumes that

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,the weighted contribution of this product is approximately

________ analysis finds the point at which costs equals revenues.

The three main strategies for increasing capacity are

A graphic design studio is considering three new computers.The first model,A,costs $5000.Model B and C cost $3000 and $1000 respectively.If each customer provides $50 of revenue and variable costs are $20/customer,find the number of customers required for each model to break even.

In "drum,buffer,rope," the ________ acts like kanban signals.

A factory outputs 1000 units a month.If design capacity is 3000 and efficiency is 50% find utilization and effective capacity.

An organization whose capacity is on that portion of the average unit cost curve that falls as output rises

The basic break-even model can be modified to handle more than one product.This extension of the basic model requires

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

Operations and Productivity

Operations Strategy in a Global Environment

Project Management

Forecasting

Design of Goods and Services

Managing Quality

Statistical Process Control

Process Strategy and Sustainability

Location Strategies

Layout Strategies

Human Resources,job Design,and Work Measurement

Supply-Chain Management

Outsourcing As a Supply-Chain Strategy

Inventory Management

Aggregate Planning

Material Requirements Planning Mrpand Erp

Short-Term Scheduling

Jit and Lean Operations

Maintenance and Reliability

Decision-Making Tools

Linear Programming

Transportation Models

Waiting-Line Models

Learning Curves

Simulation

Filters