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) 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.

Question 2

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

Accepted Answer

A bottleneck operation is one

Question 3

________ is actual output as a percent of design capacity.

Accepted Answer

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

Question 4

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 5

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 6

The staff training centre 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 centre 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 /

Question 7

How is break-even analysis useful in the study of the capacity decision? What limitations does this analytical tool have in this application?

Accepted Answer

Breakeven is defined as the volume for w

Question 8

Break-even analysis can be used by a firm that produces more than one product,but

Accepted Answer

A) the results are estimates,not exact values. 
B) the firm must allocate some fixed cost to each of the products. 
C) each product has its own break-even point. 
D) the break-even point depends upon the proportion of sales generated by each of the products. 
E) the results are never accurate. 
A) the results are estimates,not exact values. 
B) the firm must allocate some fixed cost to each of the products. 
C) each product has its own break-even point. 
D) the break-even point depends upon the proportion of sales generated by each of the products. 
E) the results are never accurate.

Question 9

________ analysis finds the point at which costs equals revenues.

Accepted Answer

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

Question 10

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 11

Which of the following techniques is not a technique for dealing with a bottleneck?

Accepted Answer

A) Schedule throughput to match capacity of the bottleneck. 
B) Increase capacity of the constraint. 
C) Have cross-trained employees available to keep the constraint at full operation. 
D) Develop alternate routings. 
E) All are tools for dealing with bottlenecks. 
A) Schedule throughput to match capacity of the bottleneck. 
B) Increase capacity of the constraint. 
C) Have cross-trained employees available to keep the constraint at full operation. 
D) Develop alternate routings. 
E) All are tools for dealing with bottlenecks.

Question 12

An assembly line has 10 stations with process times of 1,2,3,4,…,10 respectively.The process time of the system is

Accepted Answer

A) 18.18% of the process cycle time. 
B) 100% of the process cycle time. 
C) 550% of the process cycle time. 
D) 50% of the process cycle time. 
E) 2% of the process cycle time. 
A) 18.18% of the process cycle time. 
B) 100% of the process cycle time. 
C) 550% of the process cycle time. 
D) 50% of the process cycle time. 
E) 2% of the process cycle time.

Question 13

The theory of constraints is a body of knowledge that deals with anything that limits an organization's ability to achieve its goals.

Accepted Answer

A) True 
 B)False

Question 14

A product is currently made in a process-focused shop,where fixed costs are $9,000 per year and variable cost is $50 per unit.The firm sells the product for $200 per unit.What is the break-even point for this operation? What is the profit (or loss)on a demand of 200 units per year?

Accepted Answer

BEP = 60 units;TR =

Question 15

Which of the following represents a common way to manage capacity in the service sector?

Accepted Answer

A) appointments 
B) reservations 
C) changes in staffing levels 
D) first-come,first served service rule 
E) "early bird" specials in restaurants 
A) appointments 
B) reservations 
C) changes in staffing levels 
D) first-come,first served service rule 
E) "early bird" specials in restaurants

Question 16

Utilization is the number of units a facility can hold,receive,store,or produce in a period of time.

Accepted Answer

A) True 
 B)False

Question 17

What are the assumptions of the net present value technique?

Accepted Answer

The assumptions of the net present value

Question 18

Christopher's Cranks uses a machine that can produce 100 cranks per hour.The firm operates 12 hours per day,five days per week.Due to regularly scheduled preventive maintenance,the firm expects the machine to be running during approximately 95% of the available time.Based on experience with other products,the firm expects to achieve an efficiency level for the cranks of 85%.What is the expected weekly output of cranks for this company?

Accepted Answer

A) 5100 
B) 5700 
C) 4845 
D) 969 
E) 6783 
A) 5100 
B) 5700 
C) 4845 
D) 969 
E) 6783

Question 19

A shop wants to increase capacity by adding a new machine.The firm is considering proposals from vendor A and vendor B.The fixed costs for machine A are $90,000 and for machine B,$75,000.The variable cost for A is $15.00 per unit and for B,$18.00.The revenue generated by the units processed on these machines is $22 per unit.If the estimated output is 9,000 units,which machine should be purchased?

Accepted Answer

A) machine A 
B) machine B 
C) either machine A or machine B 
D) no purchase because neither machine yields a profit at that volume 
E) purchase both machines since they are both profitable 
A) machine A 
B) machine B 
C) either machine A or machine B 
D) no purchase because neither machine yields a profit at that volume 
E) purchase both machines since they are both profitable

Question 20

Some organizations use number of beds,number of rooms,or room size to measure capacity.There's no time period in this capacity,and no "throughput." Why are these firms using such a different concept of capacity?

Accepted Answer

Student answers will vary,since the answ

Exam 19: Capacity and Constraint Management

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

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

________ is actual output as a percent of design capacity.

TOC strives to reduce the effect of constraints by

Basic break-even analysis typically assumes that

How is break-even analysis useful in the study of the capacity decision? What limitations does this analytical tool have in this application?

Break-even analysis can be used by a firm that produces more than one product,but

________ analysis finds the point at which costs equals revenues.

Which of the following techniques is not a technique for dealing with a bottleneck?

An assembly line has 10 stations with process times of 1,2,3,4,…,10 respectively.The process time of the system is

The theory of constraints is a body of knowledge that deals with anything that limits an organization's ability to achieve its goals.

A product is currently made in a process-focused shop,where fixed costs are $9,000 per year and variable cost is $50 per unit.The firm sells the product for $200 per unit.What is the break-even point for this operation? What is the profit (or loss)on a demand of 200 units per year?

Which of the following represents a common way to manage capacity in the service sector?

Utilization is the number of units a facility can hold,receive,store,or produce in a period of time.

What are the assumptions of the net present value technique?

Some organizations use number of beds,number of rooms,or room size to measure capacity.There's no time period in this capacity,and no "throughput." Why are these firms using such a different concept of capacity?

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