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Exam 5: Strategic Capacity Planning for Products and Services

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Question 1

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Which of the following is a factor that affects service capacity planning?

A) the need to be near customers
B) the inability to store services
C) the degree of volatility of demand
D) the customer's willingness to wait
E) all of the above

F) None of the above
G) A) and C)

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E

Question 2

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An investment proposal will have annual fixed costs of $60,000, variable costs of $35 per unit of output, and revenue of $55 per unit of output. (A) Determine the break-even quantity. (B) What volume of output will be necessary for an annual profit of $60,000?

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FC = $60,000 per yea...

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Question 3

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What quantity would be required for a profit of $2,000?

Operation X feeds into Operation Y.Operation X has an effective capacity of 55 units per hour.Operation Y has an effective capacity of 50 units per hour.Increasing X's effective capacity to ensure that Y's utilization is maximized would be an example of ________ a constraint.

Increasing capacity just before a bottleneck operation will improve the output of the process.

Design capacity refers to the maximum output that can possibly be attained.

If the output rate is increased but the average unit costs also increase we are experiencing:

An alternative will have fixed costs of $10,000 per month, variable costs of $50 per unit, and revenue of $70 per unit.The break-even point volume is:

Utilization is defined as the ratio of:

What is the anticipated efficiency?

Outsourcing some production is a means of supporting a constraint.

The ratio of actual output to effective capacity is:

Capacity decisions often involve a long-term commitment of resources which, when implemented, are difficult or impossible to modify without major added costs.

When determining the timing and degree of capacity change, one can use the approach of:

What profit (loss) would there be for a quantity of 27,000?

Students at a major university must go through several registration steps.Officials have observed that it is typically the case that the waiting line at the fee-payment station is the longest.This would seem to suggest that the fee-payment station is the ___________ in the student registration process.

The maximum possible output given a product mix, scheduling difficulties, quality factors, and so on, is:

The utilization of a machine is 50%.The machine has a design capacity of 70 units per hour and an effective capacity of 60 units per hour.Find the efficiency of the machine.

Cost and competitive priorities reduce effective capacities.

If her available land has design and effective capacities of 3,000 and 2,000 rosebushes per year, respectively, and she expects to be 80% efficient in her use of this land, how many rosebushes does Rose plan to grow each year on this land?