Question 1

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. C

Question 2

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 1800 employees per year.Since the training center was first put in use,the program has become more complex,so that 1400 now represents the most employees that can be trained per year.In the past year,1350 employees were trained.Calculate the efficiency and the utilization of this system.

Accepted Answer

Efficiency = 1350 / 1400 = .964 or 96.4 percent;utilization = 1350 / 1800 = .75 or 75 percent

Question 3

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 three decision alternatives (capacities)are: small job shop = $42,000;medium job shop = $46,400;and large job shop = $56,800.The firm should choose the large job shop.

Question 4

A product is currently made in a process-focused shop,where fixed costs are $8,000 per year and variable cost is $40 per unit.The firm currently sells 200 units of the product at $200 per unit.A manager is considering a repetitive focus to lower costs (and lower prices,thus raising demand).The costs of this proposed shop are fixed costs = $24,000 per year and variable costs = $10 per unit.If a price of $80 will allow 400 units to be sold,what profit (or loss)can this proposed new process expect? Do you anticipate that the manager will want to change the process? Explain.

Accepted Answer

Old: TR = $40,000,TC = $16,000,therefore

Question 5

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.

Accepted Answer

The answer of The capacity planning strategy that delays adding...

Question 6

Effective capacity is the:

Accepted Answer

A) maximum output of a system in a given period. 
B) capacity a firm expects to achieve given the current operating constraints. 
C) average output that can be achieved under ideal conditions. 
D) minimum usable capacity of a particular facility. 
E) sum of all of the organization's inputs. 
A) maximum output of a system in a given period. 
B) capacity a firm expects to achieve given the current operating constraints. 
C) average output that can be achieved under ideal conditions. 
D) minimum usable capacity of a particular facility. 
E) sum of all of the organization's inputs.

Question 7

Define variable costs.What special assumption is made about variable costs in the textbook?

Accepted Answer

Variable costs are those that

Question 8

The bottleneck time is always at least as long as the throughput time.

Accepted Answer

A) True 
 B)False

Question 9

Identify the six tactics for matching capacity to demand.

Accepted Answer

1.Making staffing changes (increasing or

Question 10

Describe the theory of constraints in a sentence.

Accepted Answer

The theory of constraints is t

Question 11

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 12

Design capacity is the theoretical maximum output of a system in a given period under ideal conditions.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

Design capacity is the theoretical maxim

Question 14

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 15

Which of the following is FALSE regarding capacity expansion?

Accepted Answer

A) "Average" capacity sometimes leads demand,sometimes lags it. 
B) If "lagging" capacity is chosen,excess demand can be met with overtime or subcontracting. 
C) Total cost comparisons are a rather direct method of comparing capacity alternatives. 
D) Capacity may only be added in large chunks. 
E) In manufacturing,excess capacity can be used to do more setups,shorten production runs,and drive down inventory costs. 
A) "Average" capacity sometimes leads demand,sometimes lags it. 
B) If "lagging" capacity is chosen,excess demand can be met with overtime or subcontracting. 
C) Total cost comparisons are a rather direct method of comparing capacity alternatives. 
D) Capacity may only be added in large chunks. 
E) In manufacturing,excess capacity can be used to do more setups,shorten production runs,and drive down inventory costs.

Question 16

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 17

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 18

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

Accepted Answer

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

Question 19

A local business owner is considering adding another employee to his staff in an effort to increase the number of hours that the store is open per day.If the employee will cost the owner $4,000 per month and the store takes in $50/hour in revenue with variable costs of $15/hour,how many hours must the new employee work for the owner to break even?

Accepted Answer

BEP = 4000

Question 20

A firm is considering adding a second secretary to answer phone calls and make appointments.The cost of the secretary will be $10/hour and she will work 200 hours each month.If each new client adds $400 of profit to the firm,how many clients must the secretary arrange for the firm to break even?

Accepted Answer

BEP= 10(20

Exam 20: Capacity and Constraint Management

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

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.

Effective capacity is the:

Define variable costs.What special assumption is made about variable costs in the textbook?

The bottleneck time is always at least as long as the throughput time.

Identify the six tactics for matching capacity to demand.

Describe the theory of constraints in a sentence.

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

Design capacity is the theoretical maximum output of a system in a given period under ideal conditions.

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

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?

Which of the following is FALSE regarding capacity expansion?

Basic break-even analysis typically assumes that:

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

A firm is considering adding a second secretary to answer phone calls and make appointments.The cost of the secretary will be $10/hour and she will work 200 hours each month.If each new client adds $400 of profit to the firm,how many clients must the secretary arrange for the firm to break even?

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

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

Filters