Question 1

A smaller capacity cushion may be required if a process is highly capital intensive.

Accepted Answer

A) True 
 B)False  True

Question 2

A wait-and-see capacity strategy does all of the following EXCEPT:

Accepted Answer

A) lag behind demand. 
B) minimize the chance of lost sales due to insufficient capacity. 
C) meet capacity shortfalls with overtime,temporary workers,subcontracting,and stockouts. 
D) reduce the risk of overexpansion based on overly optimistic demand forecasts. 
A) lag behind demand. 
B) minimize the chance of lost sales due to insufficient capacity. 
C) meet capacity shortfalls with overtime,temporary workers,subcontracting,and stockouts. 
D) reduce the risk of overexpansion based on overly optimistic demand forecasts. B

Question 3

A manufacturing plant is capable of producing 10 tons of product per day when it runs three shifts with no breakdowns and plenty of raw materials.Over the past week,the plant has produced an average of 7.3 tons per day because the third shift has devoted much of their time to preventive maintenance.What is the utilization of the plant?

Accepted Answer

A) 10 tons/day 
B) 7.3 tons/day 
C) 137% 
D) 73% 
A) 10 tons/day 
B) 7.3 tons/day 
C) 137% 
D) 73% D

Question 4

When future demand is uncertain and sequential decisions are involved in capacity planning,a manager should use a:

Accepted Answer

A) waiting line model. 
B) cash flow analysis. 
C) decision tree. 
D) gap analysis. 
A) waiting line model. 
B) cash flow analysis. 
C) decision tree. 
D) gap analysis.

Question 5

The transition from economies of scale to diseconomies of scale:

Accepted Answer

A) is more likely to occur in a service operation. 
B) is more likely to occur in a manufacturing operation. 
C) is more likely to occur when utilization is low. 
D) contains the point at which average unit costs are at their lowest. 
A) is more likely to occur in a service operation. 
B) is more likely to occur in a manufacturing operation. 
C) is more likely to occur when utilization is low. 
D) contains the point at which average unit costs are at their lowest.

Question 6

________ are more appropriate measures of capacity in situations where a task that is initially difficult and time-consuming to perform becomes second-nature and short in duration.

Accepted Answer

The answer of ________ are more appropriate measures of capacity...

Question 7

Give four principal reasons economies of scale can occur when output increases.Provide examples of each for a service firm.

Accepted Answer

The four reasons are spreading fixed cos

Question 8

Table 6.3
The North Bend Manufacturing Company is producing two types of products,A and B.Demand forecasts for next year and other production-related information are provided in the following table:
   Both products A and B are produced at the same operation called MASAC27A.
-Use the information in Table 6.3 to help answer this question.Additionally,the company works 250 days every year and operates 2 shifts,each of which covers 8 hours.If a 25 percent capacity cushion is maintained,how many machines does the company need next year to fully cover the demand?

Accepted Answer

A) fewer than 13 machines 
B) 13 machines 
C) 14 machines 
D) more than 14 machines 
A) fewer than 13 machines 
B) 13 machines 
C) 14 machines 
D) more than 14 machines

Question 9

Diseconomies of scale is a concept that states that the average unit cost of a service or good can be reduced by increasing its output rate.

Accepted Answer

A) True 
 B)False

Question 10

Capacity can be expressed by output or input measures.

Accepted Answer

A) True 
 B)False

Question 11

Table 6.4
Mr.Lee is considering a capacity expansion for his supermarket.The annual sales projected for the next five years follow.The current capacity is equivalent to $300,000 sales.Assume a 20 percent pretax profit margin.
  
-Using the information in Table 6.4,if Lee expands the capacity to an equivalent of $360,000 sales now (year 0),and then expands the capacity to an equivalent of $400,000 sales at the beginning of year 4,how much would pretax cash flow increase in total for all years (years 1 through 5)?

Accepted Answer

A) less than $30,000 
B) more than $30,000 but less than $40,000 
C) more than $40,000 but less than $50,000 
D) more than $50,000 
A) less than $30,000 
B) more than $30,000 but less than $40,000 
C) more than $40,000 but less than $50,000 
D) more than $50,000

Question 12

Table 6.1
The Union Manufacturing Company is producing two types of products: A and B.The demand forecasts,batch size,and time standards follow:
   Both products are produced on the same machine,called Mark I.
-Using Table 6.1,what is the total number of hours required of Mark I equipment for the next year?

Accepted Answer

A) fewer than 29,000 hours 
B) between 29,000 and 30,000 hours 
C) between 30,000 and 31,000 hours 
D) more than 31,000 hours 
A) fewer than 29,000 hours 
B) between 29,000 and 30,000 hours 
C) between 30,000 and 31,000 hours 
D) more than 31,000 hours

Question 13

Regarding the measurement of capacity,when a firm provides a relatively small number of standardized products and services:

Accepted Answer

A) capacity cannot be determined reliably. 
B) input measures are typically used. 
C) output measures are typically used. 
D) utilization becomes equal to capacity. 
A) capacity cannot be determined reliably. 
B) input measures are typically used. 
C) output measures are typically used. 
D) utilization becomes equal to capacity.

Question 14

Extremely complex service capacity problems for which there are no optimizing equations should be analyzed using ________.

Accepted Answer

The answer of Extremely complex service capacity problems for which...

Question 15

A lumber mill is capable of producing 10,000 board feet of lumber per day when it runs ten hours per day with minimal breaks.Over the past year,forestry legislation has reduced the availability of raw materials,so the mill has produced an average of 4,575 board feet per day.What is the utilization of the plant?

Accepted Answer

A) 4,575 board feet/day 
B) 10,000 board feet/day 
C) 219% 
D) 45.75% 
A) 4,575 board feet/day 
B) 10,000 board feet/day 
C) 219% 
D) 45.75%

Question 16

Capacity cushions may be lowered if companies smooth the output rate by raising prices when inventory is low and decreasing prices when it is high.

Accepted Answer

A) True 
 B)False

Question 17

Table 6.5
The T.H.King Company has introduced a new product line that requires two work centers,A and B for manufacture.Work Center A has a current capacity of 10,000 units per year,and Work Center B is capable of 12,500 units per year.This year (year 0),sales of the new product line are expected to reach 10,000 units.Growth is projected at an additional 1,000 units each year through year 5.Pre-tax profits are expected to be $30 per unit throughout the 5-year planning period.Two alternatives are being considered:
-Expand both Work Centers A and B at the end of year 0 to a capacity of 15,000 units per year,at a total cost for both Work Centers of $200,000;

Accepted Answer

To provide a full answer to the question

Question 18

The Union Manufacturing Company is producing two types of products: A and B.The demand forecasts,batch size,and time standards for the Mark I operation follow:
   The company works 250 days per year and operates 2 shifts,each covering 8 hours.If a 20 percent capacity cushion is maintained,how many new Mark I machines are required if Union does not resort to any short-term capacity options?

Accepted Answer

M = @#IMG-DLM& where M = number of machines requir

Question 19

Which one of the following statements about capacity cushions is best?

Accepted Answer

A) Companies with flexible flow processes tend to have small capacity cushions. 
B) Companies with high capital costs tend to have large capacity cushions. 
C) Companies that have considerable customization tend to have larger capacity cushions. 
D) Constant demand rates require larger-capacity cushions. 
A) Companies with flexible flow processes tend to have small capacity cushions. 
B) Companies with high capital costs tend to have large capacity cushions. 
C) Companies that have considerable customization tend to have larger capacity cushions. 
D) Constant demand rates require larger-capacity cushions.

Question 20

Depict the expansionist strategy graphically as a plot of capacity against time and discuss the benefits of adopting this strategy.

Accepted Answer

@#IMG-DLM& The expansionist means large,infrequent

A smaller capacity cushion may be required if a process is highly capital intensive.

A wait-and-see capacity strategy does all of the following EXCEPT:

When future demand is uncertain and sequential decisions are involved in capacity planning,a manager should use a:

The transition from economies of scale to diseconomies of scale:

________ are more appropriate measures of capacity in situations where a task that is initially difficult and time-consuming to perform becomes second-nature and short in duration.

Give four principal reasons economies of scale can occur when output increases.Provide examples of each for a service firm.

Diseconomies of scale is a concept that states that the average unit cost of a service or good can be reduced by increasing its output rate.

Capacity can be expressed by output or input measures.

Regarding the measurement of capacity,when a firm provides a relatively small number of standardized products and services:

Extremely complex service capacity problems for which there are no optimizing equations should be analyzed using ________.

Capacity cushions may be lowered if companies smooth the output rate by raising prices when inventory is low and decreasing prices when it is high.

Which one of the following statements about capacity cushions is best?

Depict the expansionist strategy graphically as a plot of capacity against time and discuss the benefits of adopting this strategy.

Using Operations to Compete

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Supply Chain Design

Supply Chain Location Decisions

Supply Chain Integration

Supply Chain Sustainability and Humanitarian Logistics

Forecasting

Operations Planning and Scheduling

Resource Planning

Decision Making

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Special Inventory Models

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Exam 6: Capacity Planning

A smaller capacity cushion may be required if a process is highly capital intensive.

A wait-and-see capacity strategy does all of the following EXCEPT:

When future demand is uncertain and sequential decisions are involved in capacity planning,a manager should use a:

The transition from economies of scale to diseconomies of scale:

________ are more appropriate measures of capacity in situations where a task that is initially difficult and time-consuming to perform becomes second-nature and short in duration.

Give four principal reasons economies of scale can occur when output increases.Provide examples of each for a service firm.

Diseconomies of scale is a concept that states that the average unit cost of a service or good can be reduced by increasing its output rate.

Capacity can be expressed by output or input measures.

Regarding the measurement of capacity,when a firm provides a relatively small number of standardized products and services:

Extremely complex service capacity problems for which there are no optimizing equations should be analyzed using ________.

Capacity cushions may be lowered if companies smooth the output rate by raising prices when inventory is low and decreasing prices when it is high.

Which one of the following statements about capacity cushions is best?

Depict the expansionist strategy graphically as a plot of capacity against time and discuss the benefits of adopting this strategy.

Using Operations to Compete

Project Management

Process Strategy

Process Analysis

Quality and Performance

Constraint Management

Lean Systems

Supply Chain Inventory Management

Supply Chain Design

Supply Chain Location Decisions

Supply Chain Integration

Supply Chain Sustainability and Humanitarian Logistics

Forecasting

Operations Planning and Scheduling

Resource Planning

Decision Making

Waiting Line

Special Inventory Models

Linear Programming

Simulation

Financial Analysis

Acceptance Sampling Plans

Measuring Output Rates

Learning Curve Analysis

Operations Scheduling

Filters