Question 1

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

Accepted Answer

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

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

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?

Accepted Answer

S = R ∗ X = 500,000 ∗ 6.210 = $3,105,000

Question 4

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 5

Fabricators,Inc.wants to increase capacity by adding a new machine.The fixed costs for machine A are $90,000,and its variable cost is $15 per unit.The revenue is $21 per unit.The break-even point for machine A is

Accepted Answer

A) $90,000 dollars. 
B) 90,000 units. 
C) $15,000 dollars. 
D) 15,000 units. 
E) cannot be calculated from the information provided. 
A) $90,000 dollars. 
B) 90,000 units. 
C) $15,000 dollars. 
D) 15,000 units. 
E) cannot be calculated from the information provided.

Question 6

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 7

Utilization will always be lower than efficiency because

Accepted Answer

A) effective capacity is less than design capacity. 
B) effective capacity is greater than design capacity. 
C) effective capacity equals design capacity. 
D) utilization and efficiency are equal in value. 
E) utilization is normally greater than efficiency. 
A) effective capacity is less than design capacity. 
B) effective capacity is greater than design capacity. 
C) effective capacity equals design capacity. 
D) utilization and efficiency are equal in value. 
E) utilization is normally greater than efficiency.

Question 8

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 9

________ is actual output as a percent of effective capacity.

Accepted Answer

The answer of ________ is actual output as a percent...

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

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

Accepted Answer

A) 4 
B) 9 
C) 18 
D) 35 
E) 48 
A) 4 
B) 9 
C) 18 
D) 35 
E) 48

Question 12

A local business owner is considering adding another employee to his staff in an effort to increase the number of hours the store is open per day.
a.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?
b.The employee again costs $4000 and has agreed to work 120 hours.If variable costs remain at $15/hour and revenue is uncertain with a 40% chance of being $40/hour,35% chance of being $20/hour,and 25% chance of being $35/hour should the owner hire the employee?

Accepted Answer

A - BEP = 4000/(50 - 15)= 114.

Question 13

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 14

What is sometimes referred to as rated capacity?

Accepted Answer

A) efficiency 
B) utilization 
C) effective capacity 
D) expected output 
E) design capacity 
A) efficiency 
B) utilization 
C) effective capacity 
D) expected output 
E) design capacity

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

A common method(s)used to increase capacity with a lag strategy is/are

Accepted Answer

A) overtime and subcontractors. 
B) subcontractors and new facilities. 
C) new facilities and new machinery. 
D) new machinery and overtime. 
E) turning away customers. 
A) overtime and subcontractors. 
B) subcontractors and new facilities. 
C) new facilities and new machinery. 
D) new machinery and overtime. 
E) turning away customers.

Question 17

A high value for which of the following signals that an operations manager is excelling?

Accepted Answer

A) efficiency 
B) utilization 
C) effective capacity 
D) net present value 
E) design capacity 
A) efficiency 
B) utilization 
C) effective capacity 
D) net present value 
E) design capacity

Question 18

A capacity alternative has an initial cost of $50,000 and cash flow of $20,000 for each of the next four years.If the cost of capital is 5%,the net present value of this investment is approximately

Accepted Answer

A) $20,920. 
B) $26,160. 
C) $49,840. 
D) $70,920. 
E) $106,990. 
A) $20,920. 
B) $26,160. 
C) $49,840. 
D) $70,920. 
E) $106,990.

Question 19

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 20

A capacity alternative has an initial cost of $50,000 and cash flow of $20,000 for each of the next four years.If the cost of capital is 5%,the net present value of this investment is

Accepted Answer

A) greater than $80,000. 
B) greater than $130,000. 
C) less than $30,000. 
D) impossible to calculate,because no interest rate is given. 
E) impossible to calculate,because variable costs are not known. 
A) greater than $80,000. 
B) greater than $130,000. 
C) less than $30,000. 
D) impossible to calculate,because no interest rate is given. 
E) impossible to calculate,because variable costs are not known.

Exam 19: Capacity and Constraint Management

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

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

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

Fabricators,Inc.wants to increase capacity by adding a new machine.The fixed costs for machine A are $90,000,and its variable cost is $15 per unit.The revenue is $21 per unit.The break-even point for machine A is

Utilization will always be lower than efficiency because

Effective capacity is the

________ is actual output as a percent of effective capacity.

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

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

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 sometimes referred to as rated capacity?

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

A common method(s)used to increase capacity with a lag strategy is/are

A high value for which of the following signals that an operations manager is excelling?

A capacity alternative has an initial cost of $50,000 and cash flow of $20,000 for each of the next four years.If the cost of capital is 5%,the net present value of this investment is approximately

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

A capacity alternative has an initial cost of $50,000 and cash flow of $20,000 for each of the next four years.If the cost of capital is 5%,the net present value of this investment is

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