Question 1

Increasing productivity and also quality will result in increased capacity.

Accepted Answer

A) True 
 B)False

Question 2

What is the break-even quantity for the following situation? FC = $1,200 per week
VC = $2 per unit
Rev = $6 per unit

Accepted Answer

A)  100
B)  200
C)  600
D)  1,200
E)  300F) None of the above
G) A) and D)

Question 3

For what range of output would you prefer to make?

Accepted Answer

The answer of For what range of output would you...

Question 4

Which of the following is not a criterion for developing capacity alternatives?

Accepted Answer

A)  design structured, rigid systems
B)  take a big-picture approach to capacity changes
C)  prepare to deal with capacity in "chunks"
D)  attempt to smooth out capacity requirements
E)  identify the optimal operating levelF) A) and E)
G) A) and C)

Question 5

An example of an external factor that influences effective capacity is government safety regulations.

Accepted Answer

A) True 
 B)False

Question 6

Efficiency is defined as the ratio of:

Accepted Answer

A)  actual output to effective capacity
B)  actual output to design capacity
C)  design capacity to effective capacity
D)  effective capacity to actual output
E)  design capacity to actual outputF) None of the above
G) B) and C)

Question 7

Which of the following is the case where capacity is measured in terms of inputs?

Accepted Answer

A)  hospital
B)  theater
C)  restaurant
D)  all of the above
E)  none of the aboveF) C) and E)
G) A) and D)

Question 8

If her available land has design and effective capacities of 3,000 and 2,000 rosebushes per year respectively, and she plans to grow 1,200 rosebushes each year on this land, what will be the utilization of this land?

Accepted Answer

A)  0%
B)  40%
C)  60%
D)  67%
E)  100%F) C) and D)
G) B) and C)

Question 9

What would the profit be if she were to produce and sell 5,000 rosebushes?

Accepted Answer

A)  $0
B)  $9,000
C)  $15,000
D)  $10,000
E)  $30,000F) B) and E)
G) None of the above

Question 10

If this new blood analysis machine has design and effective capacities of 6,000 and 5,000 blood analyses per year, respectively, and Dr.J.expects to be 80% efficient in his use of this machine, how many HIV blood analyses does he plan to perform each year?

Accepted Answer

A)  3,200
B)  4,800
C)  4,000
D)  1,000
E)  5,000F) A) and D)
G) B) and D)

Question 11

If the unit cost to buy something is less than the variable cost to make it, the decision to make or buy is based solely on the fixed costs.

Accepted Answer

A) True 
 B)False

Question 12

Maximum capacity refers to the upper limit of:

Accepted Answer

A)  inventories
B)  demand
C)  supplies
D)  rate of output
E)  financesF) None of the above
G) A) and D)

Question 13

For fixed costs of $2,000, revenue per unit of $2, and variable cost per unit of $1.60, the break-even quantity is:

Accepted Answer

A)  1,000
B)  1,250
C)  2,250
D)  5,000
E)  none of theseF) A) and B)
G) A) and C)

Question 14

Waiting line analysis can be useful for capacity design, especially for service systems.

Accepted Answer

A) True 
 B)False

Question 15

The efficiency of a productive unit is 60%.The unit produces an average of 20 forklift trucks per day.Determine the effective capacity of the unit.

Accepted Answer

The answer of The efficiency of a productive unit is...

Question 16

Which of the following makes using present value approaches in capacity decisions difficult?

Accepted Answer

A)  The discount rate must be adjusted to account for inflation.
B)  Some cash flows are positive and other cash flows are negative.
C)  The payback period might not be long enough to justify a capacity decision.
D)  Capacity decisions are made amidst much uncertainty, so cash flows cannot be estimated with great accuracy.
E)  None of the above.F) A) and E)
G) A) and D)

Question 17

Stating capacity in dollar amounts generally results in a consistent measure of capacity regardless of the actual units of measure.

Accepted Answer

A) True 
 B)False

Question 18

When the output is less than the optimal rate of output, the average unit cost will be:

Accepted Answer

A)  lower
B)  the same
C)  higher
D)  could be either higher or lower
E)  could be either higher, lower or the sameF) C) and D)
G) B) and D)

Question 19

Which alternative would you select for a quantity of 24,000 units per year?

Accepted Answer

The answer of Which alternative would you select for a...

Question 20

The term capacity refers to the maximum quantity an operating unit can process over a given period of time.

Accepted Answer

A) True 
 B)False

Exam 5: Strategic Capacity Planning for Products and Services

If her available land has design and effective capacities of 3,000 and 2,000 rosebushes per year respectively, and she plans to grow 1,200 rosebushes each year on this land, what will be the utilization of this land?

Correct AnswerverifiedShow Answer

If this new blood analysis machine has design and effective capacities of 6,000 and 5,000 blood analyses per year, respectively, and Dr.J.expects to be 80% efficient in his use of this machine, how many HIV blood analyses does he plan to perform each year?

Correct AnswerverifiedShow Answer

What is the break-even quantity for the following situation? FC = $1,200 per week VC = $2 per unit Rev = $6 per unit

Correct AnswerverifiedShow Answer

For what range of output would you prefer to make?

Correct AnswerverifiedShow Answer

The term capacity refers to the maximum quantity an operating unit can process over a given period of time.

Correct AnswerverifiedShow Answer

Which of the following makes using present value approaches in capacity decisions difficult?

Correct AnswerverifiedShow Answer

Which alternative would you select for a quantity of 24,000 units per year?

Correct AnswerverifiedShow Answer

Efficiency is defined as the ratio of:

Correct AnswerverifiedShow Answer

Which of the following is the case where capacity is measured in terms of inputs?

Correct AnswerverifiedShow Answer

Which of the following is not a criterion for developing capacity alternatives?

Correct AnswerverifiedShow Answer

For fixed costs of $2,000, revenue per unit of $2, and variable cost per unit of $1.60, the break-even quantity is:

Correct AnswerverifiedShow Answer

The efficiency of a productive unit is 60%.The unit produces an average of 20 forklift trucks per day.Determine the effective capacity of the unit.

Correct AnswerverifiedShow Answer

If the unit cost to buy something is less than the variable cost to make it, the decision to make or buy is based solely on the fixed costs.

Correct AnswerverifiedShow Answer

Maximum capacity refers to the upper limit of:

Correct AnswerverifiedShow Answer

When the output is less than the optimal rate of output, the average unit cost will be:

Correct AnswerverifiedShow Answer

Increasing productivity and also quality will result in increased capacity.

Correct AnswerverifiedShow Answer

What would the profit be if she were to produce and sell 5,000 rosebushes?

Correct AnswerverifiedShow Answer

Waiting line analysis can be useful for capacity design, especially for service systems.

Correct AnswerverifiedShow Answer

Stating capacity in dollar amounts generally results in a consistent measure of capacity regardless of the actual units of measure.

Correct AnswerverifiedShow Answer

An example of an external factor that influences effective capacity is government safety regulations.

Correct AnswerverifiedShow Answer

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