Deck 4: Process Design and Capacity Management

Question 1

Classroom effective capacity = 120 students
Actual classroom enrollment (fall semester) = 98 students
Actual classroom enrollment (spring semester) = 109 students

-Find the capacity utilization in the fall semester from the information provided above.

A)90.8%
B)81.7%
C)122.5%
D)110.1%
E)Do not have enough information to compute

Answer 1

81.7%

Question 2

Classroom effective capacity = 120 students
Actual classroom enrollment (fall semester) = 98 students
Actual classroom enrollment (spring semester) = 109 students

-Find the capacity utilization in the spring semester from the information provided above.

A)90.8%
B)81.7%
C)122.5%
D)110.1%
E)Do not have enough information to compute

Answer 2

90.8%

Question 3

Classroom effective capacity = 120 students
Actual classroom enrollment (fall semester) = 98 students
Actual classroom enrollment (spring semester) = 109 students

-Find the utilization growth from fall to spring semester from the information provided above.

A)10.02% decrease
B)11.14% decrease
C)11.14% increase
D)10.02% increase
E)Do not have enough information to compute

Answer 3

11.14% increase

Question 4

Cherry Street Creamery served an average of 67 ice cream customers per day during June. Its maximum throughput was 90 per day. In July, they sent advertisements out to nearby neighborhoods, and for that month, Cherry's served an average of 84 per day.

-Find the capacity utilization during the month of June from the information provided above.

A)93.3%
B)134.3%
C)107.1%
D)74.4%
E)Do not have enough information to compute

Question 5

Cherry Street Creamery served an average of 67 ice cream customers per day during June. Its maximum throughput was 90 per day. In July, they sent advertisements out to nearby neighborhoods, and for that month, Cherry's served an average of 84 per day.

-Find the capacity utilization during the month of July from the information provided above.

A)93.3%
B)134.3%
C)107.1%
D)74.4%
E)Do not have enough information to compute

Question 6

Cherry Street Creamery served an average of 67 ice cream customers per day during June. Its maximum throughput was 90 per day. In July, they sent advertisements out to nearby neighborhoods, and for that month, Cherry's served an average of 84 per day.

-Find the utilization growth from the month of June to July from the information provided above.

A)20.26% decrease
B)25.40% increase
C)25.40% decrease
D)20.26% increase
E)Do not have enough information to compute

Question 7

Bob Thornton and his staff can normally accommodate 360 clients per day. In 2014, Bob Thornton and his staff served 217 clients. During 2014, Bob provided rigorous customer orientation training for all his staff. In 2015, Bob's firm served 295 clients.

-Find the capacity utilization during 2014 at Bob's firm from the information provided above.

A)165.9%
B)60.3%
C)81.9%
D)122.0%
E)Do not have enough information to compute

Question 8

Bob Thornton and his staff can normally accommodate 360 clients per day. In 2014, Bob Thornton and his staff served 217 clients. During 2014, Bob provided rigorous customer orientation training for all his staff. In 2015, Bob's firm served 295 clients.

-Find the capacity utilization during 2015 at Bob's firm from the information provided above.

A)165.9%
B)60.3%
C)81.9%
D)122.0%
E)Do not have enough information to compute

Question 9

Bob Thornton and his staff can normally accommodate 360 clients per day. In 2014, Bob Thornton and his staff served 217 clients. During 2014, Bob provided rigorous customer orientation training for all his staff. In 2015, Bob's firm served 295 clients.

-Find the utilization growth at Bob's firm from 2014 to 2015 from the information provided above.

A)35.82% decrease
B)26.37% increase
C)26.37% decrease
D)35.82% increase
E)Do not have enough information to compute

Question 10

Fabricating Solutions in Minnesota manufactures widgets, and the company's effective capacity is 2 units in 5 minutes. The company is usually open 12 hours per day (2 shifts per day and each shift is 6 hours each day) and 20 days for each month. The actual output for February was 4,750 units, and the actual output for March was 5,200 units.

-Fabricating Solutions is open each month for how many minutes based on the above information?

A)3,600 minutes
B)7,200 minutes
C)14,400 minutes
D)28,800 minutes
E)Do not have enough information to compute

Question 11

Fabricating Solutions in Minnesota manufactures widgets, and the company's effective capacity is 2 units in 5 minutes. The company is usually open 12 hours per day (2 shifts per day and each shift is 6 hours each day) and 20 days for each month. The actual output for February was 4,750 units, and the actual output for March was 5,200 units.

-What is Fabricating Solutions' effective capacity for a month based on the above information?

A)2,880 units
B)5,760 units
C)8,640 units
D)11,520 units
E)Do not have enough information to compute

Question 12

Fabricating Solutions in Minnesota manufactures widgets, and the company's effective capacity is 2 units in 5 minutes. The company is usually open 12 hours per day (2 shifts per day and each shift is 6 hours each day) and 20 days for each month. The actual output for February was 4,750 units, and the actual output for March was 5,200 units.

-Find the capacity utilization in February at Fabricating Solutions from the information provided above.

A)82.5%
B)90.3%
C)41.2%
D)45.2%
E)Do not have enough information to compute

Question 13

Fabricating Solutions in Minnesota manufactures widgets, and the company's effective capacity is 2 units in 5 minutes. The company is usually open 12 hours per day (2 shifts per day and each shift is 6 hours each day) and 20 days for each month. The actual output for February was 4,750 units, and the actual output for March was 5,200 units.

-Find the capacity utilization in March at Fabricating Solutions from the information provided above.

A)82.5%
B)90.3%
C)41.2%
D)45.2%
E)Do not have enough information to compute

Question 14

Fabricating Solutions in Minnesota manufactures widgets, and the company's effective capacity is 2 units in 5 minutes. The company is usually open 12 hours per day (2 shifts per day and each shift is 6 hours each day) and 20 days for each month. The actual output for February was 4,750 units, and the actual output for March was 5,200 units.

-Find the utilization growth from February to March at Fabrications Solutions from the information provided above.

A)8.64% decrease
B)8.64% increase
C)9.45% decrease
D)9.45% increase
E)Do not have enough information to compute

Question 15

Fabricating Solutions in Minnesota manufactures widgets, and the company's effective capacity is 2 units in 5 minutes. The company is usually open 12 hours per day (2 shifts per day and each shift is 6 hours each day) and 20 days for each month. The actual output for February was 4,750 units, and the actual output for March was 5,200 units.

-A call center company's effective capacity is 1,600 calls each day. If they normally attend 1,200 calls per day, what is the company's capacity utilization?

A)118.8%
B)133.3%
C)75.0%
D)84.4%
E)Do not have enough information to compute

Question 16

Fabricating Solutions in Minnesota manufactures widgets, and the company's effective capacity is 2 units in 5 minutes. The company is usually open 12 hours per day (2 shifts per day and each shift is 6 hours each day) and 20 days for each month. The actual output for February was 4,750 units, and the actual output for March was 5,200 units.

-A call center company's effective capacity is 1,600 calls each day. If the company wants to attend 1,350 calls per day, what will be the capacity utilization?

A)118.8%
B)133.3%
C)75.0%
D)84.4%
E)Do not have enough information to compute

Question 17

Fabricating Solutions in Minnesota manufactures widgets, and the company's effective capacity is 2 units in 5 minutes. The company is usually open 12 hours per day (2 shifts per day and each shift is 6 hours each day) and 20 days for each month. The actual output for February was 4,750 units, and the actual output for March was 5,200 units.

-A call center company's effective capacity is 1,600 calls each day. If the company wants to attend 1,350 calls per day from the 1,200 calls they normally can attend, what will be the company's utilization growth?

A)11.14% decrease
B)12.53% increase
C)12.53% decrease
D)11.14% increase
E)Do not have enough information to compute

Question 18

A bottling machine produces an average of 11,500 units per week during the winter months, when its maximum sustainable throughput is 15,000 units per week. During the summer months, the machine produced 16,000 units per week when its maximum sustainable throughput was raised to 20,000 per week.

-Calculate the capacity utilization of the machine during the winter based on the above information.

A)76.7%
B)106.7%
C)57.5%
D)80.0%
E)Do not have enough information to compute

Question 19

A bottling machine produces an average of 11,500 units per week during the winter months, when its maximum sustainable throughput is 15,000 units per week. During the summer months, the machine produced 16,000 units per week when its maximum sustainable throughput was raised to 20,000 per week.

-Calculate the capacity utilization of the machine during the winter based on the above information.

A)76.7%
B)106.7%
C)57.5%
D)80.0%
E)Do not have enough information to compute

Question 20

A bottling machine produces an average of 11,500 units per week during the winter months, when its maximum sustainable throughput is 15,000 units per week. During the summer months, the machine produced 16,000 units per week when its maximum sustainable throughput was raised to 20,000 per week.

-Find the percentage change in utilization from winter to summer at the bottling company based on the information provided above.

A)39.13% increase
B)4.30% increase
C)4.13% increase
D)28.13% increase
E)Do not have enough information to compute

Question 21

A bottling machine produces an average of 11,500 units per week during the winter months, when its maximum sustainable throughput is 15,000 units per week. During the summer months, the machine produced 16,000 units per week when its maximum sustainable throughput was raised to 20,000 per week.

-The Heritage Center can normally accommodate 400 visitors per day. For the past 50 weeks, the center had 79,350 visitors. If the center is open 5 days per week, what is the capacity utilization over the 50-week period?

A)56.7%
B)76.3%
C)79.4%
D)54.5%
E)Do not have enough information to compute

Question 22

A bottling machine produces an average of 11,500 units per week during the winter months, when its maximum sustainable throughput is 15,000 units per week. During the summer months, the machine produced 16,000 units per week when its maximum sustainable throughput was raised to 20,000 per week.

-An emergency department of a city hospital can serve 110 patients per day. If they normally attend 80 patients, what is the department's capacity utilization?

A)72.7%
B)110%
C)137.5%
D)90.9%
E)Do not have enough information to compute

Question 23

A bottling machine produces an average of 11,500 units per week during the winter months, when its maximum sustainable throughput is 15,000 units per week. During the summer months, the machine produced 16,000 units per week when its maximum sustainable throughput was raised to 20,000 per week.

-An emergency department of a city hospital can serve 110 patients per day. If the department wants to serve 100 patients per day, what will be the capacity utilization?

A)72.7%
B)110%
C)137.5%
D)90.9%
E)Do not have enough information to compute

Question 24

A bottling machine produces an average of 11,500 units per week during the winter months, when its maximum sustainable throughput is 15,000 units per week. During the summer months, the machine produced 16,000 units per week when its maximum sustainable throughput was raised to 20,000 per week.

-An emergency department of a city hospital can serve 110 patients per day. If the department wants to serve 100 patients per day instead of the 80 patients per day they normally serve, what will be the department's percentage change in utilization?

A)25.03% decrease
B)25.03% increase
C)20.02% decrease
D)20.02% increase
E)Do not have enough information to compute

Question 25

A bottling machine produces an average of 11,500 units per week during the winter months, when its maximum sustainable throughput is 15,000 units per week. During the summer months, the machine produced 16,000 units per week when its maximum sustainable throughput was raised to 20,000 per week.

-A new product has the following information: fixed costs = $650,000, variable costs = $17 per unit, and the projected sales price = $30 per unit. Calculate the break-even quantity.

A)25,490 units
B)100,000 units
C)50,000 units
D)12,745 units
E)Do not have enough information to compute

Question 26

A bottling machine produces an average of 11,500 units per week during the winter months, when its maximum sustainable throughput is 15,000 units per week. During the summer months, the machine produced 16,000 units per week when its maximum sustainable throughput was raised to 20,000 per week.

-A new product has the following information: fixed costs = $650,000, variable costs = $17 per unit, and the projected sales price = $30 per unit. Calculate the break-even revenue.

A)$1,600,000
B)$407,843
C)$950,000
D)$242,157
E)Do not have enough information to compute

Question 27

A bottling machine produces an average of 11,500 units per week during the winter months, when its maximum sustainable throughput is 15,000 units per week. During the summer months, the machine produced 16,000 units per week when its maximum sustainable throughput was raised to 20,000 per week.

-Rey evaluates levels of demand ranging from 100 to 2,500 students per year. Which site has the lowest cost for the greatest range of students throughout this continuum?

A)Site A
B)Site B
C)Site C
D)Site D
E)Do not have enough information to compute

Question 28

A bottling machine produces an average of 11,500 units per week during the winter months, when its maximum sustainable throughput is 15,000 units per week. During the summer months, the machine produced 16,000 units per week when its maximum sustainable throughput was raised to 20,000 per week.

-What is the break-even point for Site D if Rey decides to charge $21 per student?

A)4,000 students
B)4,250 students
C)4,500 students
D)5,000 students
E)Do not have enough information to compute

Question 29

Sunderland Furniture is determining the make or buy for a new type of futon. Make-or-buy analysis indicates whether it would be preferable to make the new futon in house (option A) as compared to buying from the low-cost furniture maker (option B). Here are the two options the company has:
Option A: Make at Sunderland, fixed costs = $7,000, variable costs = $39 per unit
Option B: Purchase the futon from a Mexico-based furniture maker for $46 per unit

-How many futons does Sunderland have to make in house to break even with buying them?

A)1,500 units
B)1,000 units
C)500 units
D)250 units
E)Do not have enough information to compute

Question 30

Sunderland Furniture is determining the make or buy for a new type of futon. Make-or-buy analysis indicates whether it would be preferable to make the new futon in house (option A) as compared to buying from the low-cost furniture maker (option B). Here are the two options the company has:
Option A: Make at Sunderland, fixed costs = $7,000, variable costs = $39 per unit
Option B: Purchase the futon from a Mexico-based furniture maker for $46 per unit

-Based on the answer to Question 31, what would be Sunderland's break-even cost?

A)$23,000
B)$11,500
C)$69,000
D)$46,000
E)Do not have enough information to compute

Question 31

Sunderland Furniture is determining the make or buy for a new type of futon. Make-or-buy analysis indicates whether it would be preferable to make the new futon in house (option A) as compared to buying from the low-cost furniture maker (option B). Here are the two options the company has:
Option A: Make at Sunderland, fixed costs = $7,000, variable costs = $39 per unit
Option B: Purchase the futon from a Mexico-based furniture maker for $46 per unit

-If Sunderland decides to sell the futon made in house for $53 per unit, calculate the break-even quantity.

A)1,500 units
B)1,000 units
C)500 units
D)250 units
E)Do not have enough information to compute

Question 32

Sunderland Furniture is determining the make or buy for a new type of futon. Make-or-buy analysis indicates whether it would be preferable to make the new futon in house (option A) as compared to buying from the low-cost furniture maker (option B). Here are the two options the company has:
Option A: Make at Sunderland, fixed costs = $7,000, variable costs = $39 per unit
Option B: Purchase the futon from a Mexico-based furniture maker for $46 per unit

-If Sunderland decides to sell the futon made in house for $53 per unit, find the break-even revenues.

A)$79,500
B)$26,500
C)$19,500
D)$53,000
E)Do not have enough information to compute

Question 33

Sunderland Furniture is determining the make or buy for a new type of futon. Make-or-buy analysis indicates whether it would be preferable to make the new futon in house (option A) as compared to buying from the low-cost furniture maker (option B). Here are the two options the company has:
Option A: Make at Sunderland, fixed costs = $7,000, variable costs = $39 per unit
Option B: Purchase the futon from a Mexico-based furniture maker for $46 per unit

-A company with fixed costs of $20,000 per month has a target price of $180 for their sole product, a heat shield for masonry fireplaces. What level of output represents their break-even point if their variable cost for producing is $40 per unit?

A)Between 100 and 110 units
B)Between 110 and 120 units
C)Between 120 and 130 units
D)Between 130 and 140 units
E)Between 140 and 150 units

Question 34

A major packaging company is interested in establishing a centralized distribution warehouse to manage logistics activities for its East Coast operations. The company conducts exhaustive research on land and construction costs, utilities, and wages at three sites: Cleveland, Albany, and Charlotte. The following table displays the different costs:


-What level of output represents their break-even point between Cleveland and Albany?

A)Between 15,000 and 20,000 units
B)Between 20,000 and 25,000 units
C)Between 25,000 and 30,000 units
D)Between 30,000 and 40,000 units
E)Between 40,000 and 45,000 units

Question 35

A major packaging company is interested in establishing a centralized distribution warehouse to manage logistics activities for its East Coast operations. The company conducts exhaustive research on land and construction costs, utilities, and wages at three sites: Cleveland, Albany, and Charlotte. The following table displays the different costs:


-What level of output represents their break-even point between Cleveland and Charlotte?

A)Between 15,000 and 20,000 units
B)Between 20,000 and 25,000 units
C)Between 25,000 and 30,000 units
D)Between 30,000 and 40,000 units
E)Between 40,000 and 45,000 units

Question 36

A major packaging company is interested in establishing a centralized distribution warehouse to manage logistics activities for its East Coast operations. The company conducts exhaustive research on land and construction costs, utilities, and wages at three sites: Cleveland, Albany, and Charlotte. The following table displays the different costs:


-Over what output range would Albany as a site be preferred?

A)Between 0 and 16,666 units
B)Between 16,667 and 33,333 units
C)Between 33,334 and more units
D)The three sites have exactly the same total costs.
E)Do not have enough information to compute

Question 37

A major packaging company is interested in establishing a centralized distribution warehouse to manage logistics activities for its East Coast operations. The company conducts exhaustive research on land and construction costs, utilities, and wages at three sites: Cleveland, Albany, and Charlotte. The following table displays the different costs:


-Over what output range would Cleveland as a site be preferred?

A)Between 0 and 16,666 units
B)Between 16,667 and 33,333 units
C)Between 33,334 and more units
D)The three sites have exactly the same total costs.
E)Do not have enough information to compute

Question 38

A major packaging company is interested in establishing a centralized distribution warehouse to manage logistics activities for its East Coast operations. The company conducts exhaustive research on land and construction costs, utilities, and wages at three sites: Cleveland, Albany, and Charlotte. The following table displays the different costs:


-Over what output range would Charlotte as a site be preferred?

A)Between 0 and 16,666 units
B)Between 16,667 and 33,333 units
C)Between 33,334 and more units
D)The three sites have exactly the same total costs.
E)Do not have enough information to compute

Question 39

Three processes have the following costs: Process A has a fixed cost of $2,000 and variable cost of $3.00/unit. Process B's fixed cost is $4,000 and variable cost is $2.60/unit. Process C's fixed cost is $8,000 and variable cost is $2.40/unit.

-What level of output represents the break-even point between Process A and Process B?

A)Between 3,000 and 6,000 units
B)Between 6,000 and 12,000 units
C)Between 12,000 and 18,000 units
D)Between 18,000 and 24,000 units
E)Between 24,000 and 30,000 units

Question 40

Three processes have the following costs: Process A has a fixed cost of $2,000 and variable cost of $3.00/unit. Process B's fixed cost is $4,000 and variable cost is $2.60/unit. Process C's fixed cost is $8,000 and variable cost is $2.40/unit.

-What level of output represents the break-even point between Process B and Process C?

A)Between 3,000 and 6,000 units
B)Between 6,000 and 12,000 units
C)Between 12,000 and 18,000 units
D)Between 18,000 and 24,000 units
E)Between 24,000 and 30,000 units

Question 41

Three processes have the following costs: Process A has a fixed cost of $2,000 and variable cost of $3.00/unit. Process B's fixed cost is $4,000 and variable cost is $2.60/unit. Process C's fixed cost is $8,000 and variable cost is $2.40/unit.

-Over what output range would Process A be preferred?

A)Between 0 and 4,999 units
B)Between 5,100 and 19,999 units
C)Between 20,001 and more units
D)The three processes have exactly the same total costs for any chosen unit.
E)Do not have enough information to compute

Question 42

Three processes have the following costs: Process A has a fixed cost of $2,000 and variable cost of $3.00/unit. Process B's fixed cost is $4,000 and variable cost is $2.60/unit. Process C's fixed cost is $8,000 and variable cost is $2.40/unit.

-Over what output range would Process B be preferred?

A)Between 0 and 4,999 units
B)Between 5,100 and 19,999 units
C)Between 20,001 and more units
D)The three processes have exactly the same total costs for any chosen unit.
E)Do not have enough information to compute

Question 43

Three processes have the following costs: Process A has a fixed cost of $2,000 and variable cost of $3.00/unit. Process B's fixed cost is $4,000 and variable cost is $2.60/unit. Process C's fixed cost is $8,000 and variable cost is $2.40/unit.

-Over what output range would Process C be preferred?

A)Between 0 and 4,999 units
B)Between 5,100 and 19,999 units
C)Between 20,001 and more units
D)The three processes have exactly the same total costs for any chosen unit.
E)Do not have enough information to compute

Question 44

Three processes have the following costs: Process A has a fixed cost of $2,000 and variable cost of $3.00/unit. Process B's fixed cost is $4,000 and variable cost is $2.60/unit. Process C's fixed cost is $8,000 and variable cost is $2.40/unit.

-If the projected total demand is for 6,000 units, which process should be used?

A)Process A
B)Process B
C)Process C
D)Any of the three processes can be chosen, as the processes have the same total cost for 6,000 units.
E)Do not have enough information to compute

Question 45

Three processes have the following costs: Process A has a fixed cost of $2,000 and variable cost of $3.00/unit. Process B's fixed cost is $4,000 and variable cost is $2.60/unit. Process C's fixed cost is $8,000 and variable cost is $2.40/unit.

-A firm can procure gummy bags for $1.25 and sell them for $1.99. If the firm purchases 750 units, how many units does it have to sell to break even?

A)Approximately 420 units
B)Approximately 435 units
C)Approximately 450 units
D)Approximately 460 units
E)Approximately 470 units

Question 46

Three processes have the following costs: Process A has a fixed cost of $2,000 and variable cost of $3.00/unit. Process B's fixed cost is $4,000 and variable cost is $2.60/unit. Process C's fixed cost is $8,000 and variable cost is $2.40/unit.

-A firm can procure gummy bags for $1.25 and sell them for $1.99. Instead of purchasing from outside, the firm could buy a gummy bag machine for $2,500 and make gummy bags for $1.00 per unit. At what point is buying the units the same as making them?

A)5,000 units
B)10,000 units
C)15,000 units
D)20,000 units
E)25,000 units

Question 47

Three processes have the following costs: Process A has a fixed cost of $2,000 and variable cost of $3.00/unit. Process B's fixed cost is $4,000 and variable cost is $2.60/unit. Process C's fixed cost is $8,000 and variable cost is $2.40/unit.

-April Ross, a procurement specialist with Quicken Tools, is determining the make-or-buy quantity for a new product. She can have them made for $65 each, with an equipment investment of $25,000, or Quicken could buy them for $90. Determine the break-even quantity.

A)500 units
B)1,000 units
C)1,500 units
D)2,000 units
E)2,500 units

Question 48

Three processes have the following costs: Process A has a fixed cost of $2,000 and variable cost of $3.00/unit. Process B's fixed cost is $4,000 and variable cost is $2.60/unit. Process C's fixed cost is $8,000 and variable cost is $2.40/unit.

-April Ross, a procurement specialist with Quicken Tools, is determining the make-or-buy quantity for a new product. She can have them made for $65 each, with an equipment investment of $25,000, or Quicken could buy them for $90. Based on the break-even quantity computed in Question 50, find the break-even cost.

A)$187,500
B)$155,000
C)$122,500
D)$90,000
E)$57,500