Accounting
Anthropology
Archaeology
Art History
Banking
Biology & Life Science
Business
Business Communication
Business Development
Business Ethics
Business Law
Chemistry
Communication
Computer Science
Counseling
Criminal Law
Curriculum & Instruction
Design
Earth Science
Economic
Education
Engineering
Finance
History & Theory
Humanities
Human Resource
International Business
Investments & Securities
Journalism
Law
Management
Marketing
Medicine
Medicine & Health Science
Nursing
Philosophy
Physic
Psychology
Real Estate
Science
Social Science
Sociology
Special Education
Speech
Visual Arts
Business Development
Q:
A standard work year is 2,000 hours at the Luther Mill and it takes about an hour and a half to fill a customer order. The manager at the mill is always concerned about employee idle time, so he aims for a capacity cushion of two percent. Last year saw 15,000 customer orders at the mill and the manager has a new John Deere in mind as a company car, so he hopes that there is an increase of 15% in customer orders for next year. How many workers will the manager need to have at the mill next year?
A) 10
B) 13
C) 16
D) 19
Q:
A standard work year is 2,080 hours at the Luther Mill and it takes about 2 hours to fill a customer order. The manager at the mill is always concerned about employee idle time, so he aims for a capacity cushion of two percent. Last year saw 15,000 customer orders at the mill and the manager has a new Mercedes in mind as a company car, so he hopes that there is an increase of 10% in customer orders for next year. How many workers will the manager need to have at the mill next year?
A) 10
B) 13
C) 16
D) 19
Q:
Table 4.1 The Union Manufacturing Company is producing two types of products: A and B. The demand forecasts, batch size, and time standards follow: Product A Product B Demand forecast (units/yr) 1,000 4,000 Batch size (units/batch) 20 10 Processing time (hr/unit) 3.2 4.5 Setup time (hr/batch) 10 20 Both products are produced on the same machine, called Mark I. Use the information in Table 4.1. How many Mark I machines are required to produce Union Manufacturing's yearly production? A) fewer than 4 machines B) more than 4 but fewer than or equal to 6 machines C) more than 6 but fewer than or equal to 8 machines D) more than 8 machines
Q:
The single milling machine at Stout Manufacturing was severely overloaded last year. The plant operates eight hours per day, five days per week, and 50 weeks per year. Management prefers a capacity cushion of 15 percent. Two major types of products are routed through the milling machine. The annual demand for product A is 3,000 units and 2,000 units for product B. The batch size for A is 20 units and 40 units for B. The standard processing time for A is 0.5 hours/unit and 0.8 hours/unit for B. The standard setup time for product A is 2 hours and 8 hours for product B. How many new milling machines are required if Stout does not resort to any short-term capacity options?
A) no new machines
B) 1 or 2 new machines
C) 3 or 4 new machines
D) more than 4 new machines
Q:
A well-educated operations manager used the capacity requirements equation to determine the number of crackerbox welders to purchase for the shop, given the standard time per unit, hours available per machine, among other relevant parameters. He studied the answer, 2.2, and concluded that:
A) he had made a mistake, since it isn't possible to purchase a fractional welder.
B) he needed to decrease his desired capacity cushion to bring him up to exactly three welders.
C) he should buy two welders and authorize 10% overtime to reach the 2.2 figure.
D) he should buy two welders and reduce the time per part by 10% to reduce the capacity need to two welders.
Q:
A well-educated operations manager used the capacity requirements equation to determine the number of crackerbox welders to purchase for the shop, given the standard time per unit, hours available per machine, among other relevant parameters. He studied the answer, 12.6, and concluded that:
A) he had made a mistake, since it isn't possible to purchase a fractional welder.
B) he needed to decrease his desired capacity cushion to bring him up to an even thirteen welders.
C) he should buy twelve welders and spend 50% more time per part to reach the 12.6 figure.
D) he should buy twelve welders and use all of them at 5% overtime to achieve the necessary output.
Q:
The time required to change a machine from making one product or service to the next is called:
A) cycle time.
B) setup time.
C) queue time.
D) hold time.
Q:
When a firm makes a long-term capacity decision, selecting the base case alternative means doing nothing and losing orders from any demand that exceeds current capacity, or incurring costs due to excess capacity.
Q:
Cash flow is the difference between the flows of funds into and out of an organization over a period of time.
Q:
The capacity requirement for a year's output is inversely proportional to the total number of hours available from a single capacity unit per year.
Q:
As the desired capacity cushion increases, the processing hours required for a year's demand decrease.
Q:
Kristen made a batch of chocolate chip cookie dough and then had to clean the utensils and mixing bowl before she made a batch of oatmeal raisin cookie dough. The time spent cleaning the bowl and utensils is an example of setup time.
Q:
Output measures are used for estimating capacity requirements when product variety and process divergence are high.
Q:
A planning horizon is defined as the set of consecutive time periods considered for planning purposes.
Q:
A process's capacity requirement states the future process capacity needed to meet projected customer demands, and includes an allowance for the desired capacity cushion.
Q:
What is a capacity cushion? Provide examples of capacity cushions in a university setting and an automotive producer.
Q:
Define each of the following capacity strategies: expansionist, wait-and-see, and follow-the-leader.
Q:
What factors should be considered when selecting the appropriate capacity cushion? How does the choice of capacity cushion relate to other decisions in operations management? To other functional areas?
Q:
If demand is increasing, and you also prefer to increase the time between capacity increments, then the size of increments should ________.
Q:
________ is the amount of reserve capacity that a firm maintains to handle a sudden increase in demand or temporary losses of production capacity.
Q:
A wait-and-see capacity strategy:
A) involves small, frequent jumps in capacity.
B) minimizes the chance of lost sales due to insufficient capacity.
C) can result in economies of scale and a fast rate of learning, yielding reduced manufacturing costs.
D) stays ahead of demand.
Q:
An expansionist capacity strategy:
A) lags behind demand.
B) reduces the risk of overexpansion based on overly optimistic demand forecasts.
C) can preempt expansion by competitors by announcing a large capacity expansion.
D) meets capacity shortfalls with overtime, temporary workers, subcontracting, and stockouts.
Q:
It takes a service rep an average of two and a half minutes to take a customer's information. Over the course of a work week, the rep handles 160 calls a day during her eight hour shift. What is the service rep's capacity cushion?
A) 16%
B) 33%
C) 50%
D) 66%
Q:
It takes a service rep an average of two minutes to take a customer's information. Over the course of a work week, the rep handles 160 calls a day during her eight hour shift. What is the service rep's capacity cushion?
A) 20%
B) 33%
C) 50%
D) 67%
Q:
If a system is well balanced, which one of the following changes usually calls for a larger capacity cushion?
A) higher capital intensity
B) higher worker flexibility
C) requests for fast delivery times
D) higher inventories
Q:
Which one of the following statements concerning capacity cushions is best?
A) Large capacity cushions are used more often when future demand is level and known.
B) Small capacity cushions are preferred in capital intensive firms.
C) Capacity cushions are used primarily in manufacturing organizations, not in service organizations.
D) Small cushions are used in organizations where the products and services produced often change.
Q:
Which one of the following statements about capacity cushions is best?
A) Companies with flexible flow processes tend to have small capacity cushions.
B) Companies with high capital costs tend to have large capacity cushions.
C) Companies that have considerable customization tend to have larger capacity cushions.
D) Constant demand rates require larger-capacity cushions.
Q:
Which one of the following factors usually calls for a larger capacity cushion?
A) uncertain demand
B) high capital intensity
C) more reliable equipment
D) high worker flexibility
Q:
Which one of the following factors usually motivates a smaller capacity cushion?
A) unevenly distributed demands
B) high capital intensity
C) high penalty costs for overtime usage
D) requests for quick customer services
Q:
Large, infrequent jumps in capacity are characteristic of companies that:
A) have an expansionist strategy.
B) have a wait-and-see strategy.
C) have low utilization.
D) have high utilization.
Q:
An expansionist capacity strategy minimizes the risks of overexpansion due to overly optimistic demand forecasts.
Q:
A firm may preempt the expansion of competitive firms by using an expansionist capacity strategy and announcing a large capacity expansion.
Q:
A wait-and-see capacity strategy minimizes the chances of lost sales due to insufficient capacity.
Q:
An expansionist capacity strategy involves large, infrequent jumps in capacity, where a wait-and-see strategy involves smaller, more frequent jumps.
Q:
Capacity cushions may be lowered if companies smooth the output rate by raising prices when inventory is low and decreasing prices when it is high.
Q:
A larger capacity cushion can help firms uncover process inefficiencies, so they can find ways to correct them.
Q:
A smaller capacity cushion may be preferred if a process is highly capital intensive.
Q:
A larger capacity cushion may be required due to variation in demand, changing product mix, or supply uncertainty.
Q:
A capacity cushion is the amount of inventory that a firm maintains to handle sudden increases in demand or temporary loss of production capacity.
Q:
Give four principal reasons economies of scale can occur when output increases. Provide examples of each for a service firm.
Q:
Discuss the relationship between setup time and utilization.
Q:
Define utilization and give a service process example of it.
Q:
________ occurs when the average cost per unit increases as the facility's size increases.
Q:
The ________ concept states that the average unit cost of a service or good can be reduced by increasing its output rate.
Q:
________ is the degree to which equipment, space, or labor is currently being used.
Q:
Capacity decisions should be linked closely to ________ and ________ throughout the organization.
Q:
________ is the maximum rate of output for a process.
Q:
The transition from economies of scale to diseconomies of scale:
A) is more likely to occur in a service operation.
B) is more likely to occur in a manufacturing operation.
C) is more likely to occur when utilization is low.
D) contains the point at which average unit costs are at their lowest.
Q:
A manufacturing plant is capable of producing 10 tons of product per day when it runs three shifts with no breakdowns and plenty of raw materials. Over the past week, the plant has produced an average of 7.3 tons per day since the third shift has devoted much of their time to preventive maintenance. What is the capacity of the plant?
A) 10 tons/day
B) 7.3 tons/day
C) 73%
D) 137%
Q:
A manufacturing plant is capable of producing 10 tons of product per day when it runs three shifts with no breakdowns and plenty of raw materials. Over the past week, the plant has produced an average of 7.3 tons per day because the third shift has devoted much of their time to preventive maintenance. What is the utilization of the plant?
A) 10 tons/day
B) 7.3 tons/day
C) 137%
D) 73%
Q:
The test bank author abandoned his teaching duties when he was in the zone working on a test bank. Normally scheduled to teach nine hours per week during the semester, he generally made his way to one three hour class a week, one where his students could propose devious problems that were sure to confound generations of test takers. What is the test bank author's utilization for his teaching duties?
A) three hours
B) nine hours
C) 33%
D) 300%
Q:
Although the fire marshal had declared the capacity of the classroom at 55 students, the introduction to operations management class was so popular, the average attendance was 75 students, literally standing room only. Squeals of excitement accompanied the successful solution of problems such as this: What is the utilization of the operations management professor?
A) 100%
B) 136%
C) 75
D) 55
Q:
Although the fire marshal had declared the capacity of the classroom at 45 students, the introduction to operations management class was so popular, the average attendance was 55 students, literally standing room only. Shouts of "You the man!" accompanied the successful solution of problems such as this: What is the utilization of the operations management professor?
A) 122%
B) 100%
C) 55 students
D) 45 students
Q:
The degree to which equipment, space, or labor is being used is commonly referred to as:
A) capacity.
B) output.
C) utilization.
D) cushion.
Q:
Input measures include such metrics as:
A) the number of customers served per hour.
B) the number of trucks produced per day.
C) the number of machine hours available.
D) the number of bills processed in a week.
Q:
One of the many steps in the production of toothpaste is to screw the caps on the tubes, which is still a manual process, performed by one man, Mr. Bucket. Which statement about this situation is best?
A) This is most appropriate for an output measure of capacity.
B) This is most appropriate for an input measure of capacity.
C) Utilization of the worker at this process step cannot be measured as it is a manual process.
D) In this case, the capacity of this step is not the maximum rate of output.
Q:
Regarding the measurement of capacity, when a firm provides a relatively small number of standardized products and services:
A) capacity cannot be determined reliably.
B) input measures are typically used.
C) output measures are typically used.
D) utilization becomes equal to capacity.
Q:
Long-term capacity decisions that confront managers include all of the following except:
A) capital equipment.
B) additional land.
C) buildings.
D) workforce size.
Q:
Long-term capacity plans deal with:
A) investments in new facilities.
B) workforce size.
C) inventories.
D) overtime budgets.
Q:
Diseconomies of scale is a concept that states that the average unit cost of a service or good can be reduced by increasing its output rate.
Q:
One reason economies of scale drive down cost is the spreading of fixed costs.
Q:
Utilization is the degree to which equipment, space, or labor is currently being used.
Q:
Input measures of capacity are inherently more accurate than output measures of capacity.
Q:
Capacity can be expressed by output or input measures.
Q:
Capacity is the maximum rate of output of a process.
Q:
4.1 Planning Long-Term Capacity
Q:
What is a waiting line model, and what information can it provide?
Q:
Capacity planning requires a demand forecast for an extended period of time into the future. What concerns would you have regarding an extended forecast as a capacity planner?
Q:
________ are useful capacity analysis tools when the future is uncertain and capacity decisions can be made in a sequential fashion.
Q:
Extremely complex service capacity problems for which there are no optimizing equations should be analyzed using ________.
Q:
A capacity decision in a call center, such as the number of customer service representatives to answer the phone during a peak period, can be addressed using a(n) ________.
Q:
Figure 4.1 A manager weighs three options for capacity cushion as depicted in Figure 4.1. If the dollar amounts expressed in the figure are costs, what is the optimal decision? A) large cushion B) medium cushion C) small cushion D) Not enough information is given to select an option.
Q:
When future demand is uncertain and sequential decisions are involved in capacity planning, a manager should use a: A) waiting line model. B) cash flow analysis. C) decision tree. D) gap analysis.
Q:
What information would managers use to choose the best cost-effective capacity to balance customer service with the cost of adding capacity?
A) decision trees
B) diseconomies of scale
C) capacity cushion
D) waiting line models
Q:
Which of the following descriptions about waiting line models is best? A) They account for major events such as competitor actions. B) They account for the random, independent behavior of many customers. C) They assume that each branch can give the highest expected payoff. D) They deal with the certainty and stability in demand.
Q:
4.4 Tools for Capacity Planning 1) Waiting line models are often used for capacity planning.
Q:
When considering the plan-do-study-act cycle for problem solving, evaluating how closely a project's results correspond to the initial goals set for the work is part of the ________ step.
A) plan
B) do
C) study
D) act
Q:
Continuous improvement is a philosophy that:
A) uses problem-solving techniques within work teams.
B) ensures there are plenty of quality inspectors to find areas for improvement.
C) waits until a big problem occurs, then systematically solves it.
D) encourages the hiring of statistical process control specialists to reduce the need for current employees to learn statistical methods.
Q:
One of the main challenges in developing the proper culture for TQM is to:
A) define customer for each employee.
B) suspend reward systems based on quantity.
C) institute an equitable employee recognition program.
D) get buy-in from the customer.
Q:
The 15-year-old car didn't dazzle students or members of the opposite sex, but it started every morning and evening and got the professor to his destination on time, thereby scoring high on the:
A) psychological impressions scale of quality.
B) fitness for use scale of quality.
C) support scale of quality.
D) bells and whistles scale of quality.