Operations Management Processes And Supply Chains 12th Edition – Test Bank

Operations Management Processes And Supply Chains 12th Edition – Test Bank

Operations Management: Processes and Supply Chains, 12e (Krajewski)

Chapter 4  Capacity Planning

4.1  Planning Long-Term Capacity

1) Capacity is the maximum rate of output of a process.

Answer:  TRUE

Difficulty:  Easy

Keywords:  capacity, maximum output rate

Learning Outcome:  Explain options for managing bottlenecks and managing capacity in service and manufacturing processes

AACSB:  Application of Knowledge

Learning Obj.:  Define long-term capacity and its relationship with economies and diseconomies of scale.

2) Capacity can be expressed by output or input measures.

Answer:  TRUE

Difficulty:  Easy

Keywords:  capacity, input measures, output measures

Learning Outcome:  Explain options for managing bottlenecks and managing capacity in service and manufacturing processes

AACSB:  Application of Knowledge

Learning Obj.:  Define long-term capacity and its relationship with economies and diseconomies of scale.

3) Input measures of capacity are inherently more accurate than output measures of capacity.

Answer:  FALSE

Difficulty:  Moderate

Keywords:  input measures, output measures, capacity

Learning Outcome:  Explain options for managing bottlenecks and managing capacity in service and manufacturing processes

AACSB:  Application of Knowledge

Learning Obj.:  Define long-term capacity and its relationship with economies and diseconomies of scale.

4) Utilization is the degree to which equipment, space, or labor is currently being used.

Answer:  TRUE

Difficulty:  Easy

Keywords:  utilization, equipment used, space used, labor used

Learning Outcome:  Explain options for managing bottlenecks and managing capacity in service and manufacturing processes

AACSB:  Application of Knowledge

Learning Obj.:  Define long-term capacity and its relationship with economies and diseconomies of scale.

5) One reason economies of scale drive down cost is the spreading of fixed costs.

Answer:  TRUE

Difficulty:  Moderate

Keywords:  economies of scale, fixed cost

Learning Outcome:  Explain options for managing bottlenecks and managing capacity in service and manufacturing processes

AACSB:  Application of Knowledge

Learning Obj.:  Define long-term capacity and its relationship with economies and diseconomies of scale.

6) 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.

Answer:  FALSE

Difficulty:  Easy

Keywords:  diseconomies of scale, average unit cost, output rate

Learning Outcome:  Explain options for managing bottlenecks and managing capacity in service and manufacturing processes

AACSB:  Application of Knowledge

Learning Obj.:  Define long-term capacity and its relationship with economies and diseconomies of scale.

7) Long-term capacity plans deal with:

A) investments in new facilities.

B) workforce size.

C) inventories.

D) overtime budgets.

Answer:  A

Difficulty:  Moderate

Keywords:  long-term capacity, new facilities

Learning Outcome:  Explain options for managing bottlenecks and managing capacity in service and manufacturing processes

AACSB:  Application of Knowledge

Learning Obj.:  Define long-term capacity and its relationship with economies and diseconomies of scale.

8) Long-term capacity decisions that confront managers include all of the following except:

A) capital equipment.

B) additional land.

C) buildings.

D) workforce size.

Answer:  D

Difficulty:  Moderate

Keywords:  long-term capacity

Learning Outcome:  Explain options for managing bottlenecks and managing capacity in service and manufacturing processes

AACSB:  Application of Knowledge

Learning Obj.:  Define long-term capacity and its relationship with economies and diseconomies of scale.

9) 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.

Answer:  C

Difficulty:  Moderate

Keywords:  output measure, capacity

Learning Outcome:  Explain options for managing bottlenecks and managing capacity in service and manufacturing processes

AACSB:  Application of Knowledge

Learning Obj.:  Define long-term capacity and its relationship with economies and diseconomies of scale.

10) 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.

Answer:  A

Difficulty:  Moderate

Keywords:  capacity, maximum output rate

Learning Outcome:  Explain options for managing bottlenecks and managing capacity in service and manufacturing processes

AACSB:  Application of Knowledge

Learning Obj.:  Define long-term capacity and its relationship with economies and diseconomies of scale.

11) 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.

Answer:  C

Difficulty:  Moderate

Keywords:  input measure, capacity

Learning Outcome:  Explain options for managing bottlenecks and managing capacity in service and manufacturing processes

AACSB:  Application of Knowledge

Learning Obj.:  Define long-term capacity and its relationship with economies and diseconomies of scale.

12) The degree to which equipment, space, or labor is being used is commonly referred to as:

A) capacity.

B) output.

C) utilization.

D) cushion.

Answer:  C

Difficulty:  Moderate

Keywords:  utilization, capacity

Learning Outcome:  Explain options for managing bottlenecks and managing capacity in service and manufacturing processes

AACSB:  Application of Knowledge

Learning Obj.:  Define long-term capacity and its relationship with economies and diseconomies of scale.