Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Of the four approaches to capacity expansion,the approach that "straddles" demand:

Accepted Answer

A) uses incremental expansion. 
B) uses one-step expansion. 
C) at some times leads demand,and at other times lags. 
D) works best when demand is not growing but is stable. 
E) Choices A and C are both correct. 
A) uses incremental expansion. 
B) uses one-step expansion. 
C) at some times leads demand,and at other times lags. 
D) works best when demand is not growing but is stable. 
E) Choices A and C are both correct.

Question 3

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 4

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 3 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 5

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

Accepted Answer

Net presen

Question 6

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 7

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 8

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 9

Break-even analysis is a powerful analytical tool,but is useful only when the organization produces a single product.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A bottleneck operation is the

Question 11

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 net present value of the annual cash flows? What is the net 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 12

Consider the simple 3-station assembly line illustrated below,where the 2 machines at Station 1 are parallel,i.e. ,the product only needs to go through one of the 2 machines before proceeding to Station 2.   What is the throughput time of this process?

Accepted Answer

A) 12 min. 
B) 20 min. 
C) 38 min. 
D) 18 min. 
E) 58 min. 
A) 12 min. 
B) 20 min. 
C) 38 min. 
D) 18 min. 
E) 58 min.

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

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 15

What are the four limitations of the net present value technique?

Accepted Answer

(1)Investments with the same net present

Question 16

The Theory of Constraints (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 17

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 18

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

Accepted Answer

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

Question 19

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& Bre

Question 20

An executive conference center has the physical ability to handle 1,100 participants.However,conference management personnel believe that only 1,000 participants can be handled effectively for most events.The last event,although forecasted to have 1,000 participants,resulted in the attendance of only 950 participants.What are the utilization and efficiency of the conference facility?

Accepted Answer

Design Capacity = 1,100 partic

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

Of the four approaches to capacity expansion,the approach that "straddles" demand:

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

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

Break-even analysis is a powerful analytical tool,but is useful only when the organization produces a single product.

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

Consider the simple 3-station assembly line illustrated below,where the 2 machines at Station 1 are parallel,i.e. ,the product only needs to go through one of the 2 machines before proceeding to Station 2. What is the throughput time of this process?

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

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

What are the four limitations of the net present value technique?

The Theory of Constraints (TOC)strives to reduce the effect of constraints by:

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.

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

Exam 20: Capacity and Constraint Management

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

Of the four approaches to capacity expansion,the approach that "straddles" demand:

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

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

Break-even analysis is a powerful analytical tool,but is useful only when the organization produces a single product.

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

Consider the simple 3-station assembly line illustrated below,where the 2 machines at Station 1 are parallel,i.e. ,the product only needs to go through one of the 2 machines before proceeding to Station 2. What is the throughput time of this process?

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

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

What are the four limitations of the net present value technique?

The Theory of Constraints (TOC)strives to reduce the effect of constraints by:

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.

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