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Exam 5: Strategic Capacity Management

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Question 21

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If the best operating level of a piece of equipment is at a rate of 400 units per hour and the actual output during an hour is 300 units,which of the following is the capacity cushion?

A) 33 percent
B) 75 percent
C) 90 percent
D) 100 percent
E) 133 percent

F) A) and B)
G) B) and E)

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Question 22

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If the actual output of a piece of equipment during an hour is 500 units and it's best operating level is at a rate of 400 units per hour,which of the following is the capacity utilization rate?

A) 0.75
B) 1.00
C) 1.25
D) 1.33
E) 100

F) B) and E)
G) A) and C)

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Question 23

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Capacity planning involving consideration of production scheduling and inventory position is characterized by which one of the following time durations?

The smaller the capacity cushion the better.

Which of the following models uses a schematic model of the sequence of steps in a problem and the conditions and consequences of each step?

A chance node on a decision tree has four possible outcomes each worth $100,000.The probabilities of the outcomes occurring are assessed as 10%,27%,43% and 20%.What is the expected value of this chance node?

Describe the relationship between capacity utilization and quality in a service operation?

At a decision point in a decision tree,which machine would you select when trying to maximize payoff when the anticipated benefit of selecting machine A is $45,000 with a probability of 90%;the expected benefit of selecting machine B is $80,000 with a probability of 50% and the expected benefit of selecting machine C is $60,000 with a probability of 75%?

If the best operating level of a piece of equipment is at a rate of 400 units per hour and the actual output during an hour is 300 units,which of the following is the capacity utilization rate?

Economies of scale and the experience curve have opposite effects on capacity.

In solving a decision tree problem,calculations start at the ends of the "branches" of the tree and work backwards to the base "trunk" of the tree.

If the best operating level of a piece of equipment is at a rate of 400 units per hour and the actual output during an hour is 300 units,what is the capacity cushion?

Capacity can be defined as the amount of available resource inputs relative to requirements for output over a particular period of time.

Capacity can be defined as the ability to hold,receive,store or accommodate.

Compared with a service operation,which of these statements is true for a manufacturing operation's capacity?

Factors to be taken into account in selecting capacity additions for both manufacturing and services include which four things discussed in this chapter?

The capacity focus concept can be put into practice through a mechanism called which of the following?

If the best operating level of a piece of equipment is at a rate of 400 units per hour and the actual output during an hour is 300 units,what is the capacity utilization rate?

The capacity utilization rate is found by dividing best operating level by capacity used.

When deciding to add capacity to a factory which of the following need not be considered?