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Operations Management
Test 3
63
Other
Undergraduate 4
10/30/2013

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Term

True

Definition
(True or False) The term capacity refers to the maximum quantity an operating unit can process over a given period of time.
Term
True
Definition
(True or False) 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.
Term
True
Definition
(True or False) Increasing productivity and also quality will result in increased capacity.
Term
True
Definition
(True or False) An example of an external factor that influences effective capacity is government safety regulations.
Term
True
Definition
(True or False) Capacity increases are usually acquired in fairly large "chunks" rather than in smooth increments.
Term
True
Definition
(True or False) Capacity planning requires an analysis of needs; what kind, how much and when.
Term
True
Definition
(True or False) Capacity decisions often involve a long-term commitment of resources which, when implemented, are difficult or impossible to modify without major added costs.
Term

Overcoming

Definition
Outsourcing some production is a means of _________ a capacity constraint.
Term
  what kind is needed
  how much is needed
  when is it needed
  all of these
  none of these
Definition

A basic question in capacity planning is

  what kind is needed
  how much is needed
  when is it needed
  all of these
  none of these
Term
Personal time
Maintenance
[image] Scrap
Operating hours per day
None of these

Definition

Which of these factors wouldn't be subtracted from design capacity when calculating effective capacity

Personal time
  Maintenance
  Scrap
  Operating hours per day
  None of these
Term
limits the rate of output possible
affects operating costs
is a major determinant of initial costs
[image] is a long-term commitment of resources
all of these

Definition

A reason for the importance of capacity decisions is that capacity

imits the rate of output possible
  affects operating costs
  is a major determinant of initial costs
  is a long-term commitment of resources
  all of these
Term
[image] Hospital
Theater
Restaurant
All of these
None of these

Definition

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

  Hospital
  Theater
  Restaurant
  All of these
  None of these
Term
operational process factor
process limiting factor
[image] supply chain factor
internal factor
human resource factor
Definition

The impact that a significant change in capacity will have on a key vendor is a

  operational process factor
  process limiting factor
  supply chain factor
  internal factor
  human resource factor
Term
The need to be near customers
The inability to store services
[image] The degree of volatility of demand
The customer's willingness to wait
All of these
Definition

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

     The need to be near customers
  The inability to store services
  The degree of volatility of demand
  The customer's willingness to wait
  All of these
Term
60%
40%
50%
80%
[image] 90%
Definition

Given the following information, what would efficiency be? 
Effective capacity = 50 units per day
Design capacity = 100 units per day
Actual output = 30 units per day


60%
  40%
  50%
  80%
  90%
Term
All three statements are correct.
[image] I and III
II and III
I and II
Only one of the three statements is true.

Definition

Capacity planning decisions have both long-term and short-term considerations. Which of the following statements are true? 
(I) Long-term considerations relate to the overall level of capacity.
(II) Short-term considerations relate to the probable variations in capacity requirements.
(III) Short-term considerations determine the "effective capacity."


All three statements are correct.
  I and III
  II and III
  I and II
  Only one of the three statements is true.

Term
margin protect
[image] line balance
capacity cushion
timing bubble
none of these
Definition

Capacity in excess of expected demand that is intended to offset uncertainty is a:


margin protect
  line balance
  capacity cushion
  timing bubble
  none of these
Term
demand trend
seasonal demand variations
new product development plans
[image] cyclical demand variations
mission statements
Definition

Short-term considerations in determining capacity requirements include

demand trend
  seasonal demand variations
  new product development plans
  cyclical demand variations
  mission statements
Term

 

Attempt to smooth out capacity requirements
Prepare to deal with capacity in "chunks"
Identify the optimal operating level
[image] Take a big-picture approach to capacity changes
Design structured, rigid systems
Definition

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



Attempt to smooth out capacity requirements
  Prepare to deal with capacity in "chunks"
  Identify the optimal operating level
  Take a big-picture approach to capacity changes
  Design structured, rigid systems
Term
demand trend
seasonal demand variations
new product development plans
[image] cyclical demand variations
mission statements

Definition

Short-term considerations in determining capacity requirements include:


demand trend
  seasonal demand variations
  new product development plans
  cyclical demand variations
  mission statements
Term

 

larger
predictable
smaller
controllable
[image] less frequent
Definition

Seasonal variations are often easier to deal with in capacity planning than random variations because seasonal variations tend to be:

  larger
  predictable
  smaller
  controllable
  less frequent
Term

 

[image] marginal costs are minimum
rate of output is maximum
total costs are minimum
average unit costs are minimum
total revenue is maximum

Definition

Production units have an optimal rate of output where:

  marginal costs are minimum
  rate of output is maximum
  total costs are minimum
  average unit costs are minimum
  total revenue is maximum

Term

 

variable cost equals total revenue
variable cost equals fixed cost
total cost equals profit
[image] total cost equals total revenue
output equals capacity

Definition

At the break-even point:

  variable cost equals total revenue
  variable cost equals fixed cost
  total cost equals profit
  total cost equals total revenue
  output equals capacity

Term
step-function scale up.
market share erosion.
[image] diseconomies of scale.
economies of scale.
value added accounting.

Definition

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

  step-function scale up.
  market share erosion.
  diseconomies of scale.
  economies of scale.
  value added accounting.
Term

 

backordering
expand early strategy
wait-and-see strategy
[image] lead time flexibility strategy
delayed differentiation

Definition

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

  backordering
  expand early strategy
  wait-and-see strategy
  lead time flexibility strategy
  delayed differentiation

Term

 

0%
[image] 60%
100%
67%
40%
Definition

The owner of a greenhouse and nursery is considering whether to spend $6,000 to acquire the licensing rights to grow a new variety of rosebush, which she could then sell for $6 each. Per-unit variable cost would be $3.


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?
  0%
  60%
  100%
  67%
  40%
Term
a. Maximin.
  Reassign [image]

    

b. Maximax.
  New Staff [image]

    

c. Minimax regret.
  New Staff [image]

    


d. Laplace.
  New Staff or Reassign [image]
Definition

The director of social services of a county has learned that the state has mandated additional information requirements. This will place an additional burden on the agency. The director has identified three acceptable alternatives to handle the increased workload. One alternative is to reassign present staff members, the second is to hire and train two new workers, and the third is to redesign current practice so that workers can readily collect the information with little additional effort. An unknown factor is the caseload for the coming year when the new data will be collected on a trial basis. The estimated costs for various options and caseloads are shown in the following table:

   

 

CASELOAD

  Moderate High Very High
  Reassign staff $52*      60     89        
  New staff 62       60     65        
  Redesign collection 40       50     94        

*Cost in $ thousands.
  

Assuming that past experience has shown the probabilities of various caseloads to be unreliable, what decision would be appropriate using each of the following criteria?

    

a. Maximin.
 
New Staff
Reassign
Redesign

    

b. Maximax.
 
Redesign
New Staff
Reassign

    

c. Minimax regret.
 
Redesign
New Staff
Reassign

    


d. Laplace.
 
Redesign
New Staff or Reassign
Reassign
Term
a. Maximin.
  Relocate [image]

 

b. Maximax.
  Renew [image]

 

c. Laplace.
  Relocate [image]

 

d. Minimax regret.
  Renew [image]
Definition

The lease of Theme Park, Inc., is about to expire. Management must decide whether to renew the lease for another 10 years or to relocate near the site of a proposed motel. The town planning board is currently debating the merits of granting approval to the motel. A consultant has estimated the net present value of Theme Park's two alternatives under each state of nature as shown on the following page.

 

What course of action would you recommend using?

 

Options Motel
Approved
Motel
Rejected
  Renew $500,000      $4,000,000     
  Relocate 6,000,000      200,000     

a. Maximin.
  Relocate 

 

b. Maximax.
  Renew 

 

c. Laplace.
  Relocate 

 

d. Minimax regret.
  Renew 
Term
is more compact.
permits better communication among employees.
facilitates teamwork among workers.
[image] increases flexibility of work assignments.
all of these
Definition

An advantage of a U-shaped production line is that it:

  is more compact.
  permits better communication among employees.
  facilitates teamwork among workers.
  increases flexibility of work assignments.
  all of these
Term
True
Definition
(True or False) Flexibility can be used as a competitive strategy.
Term

 

True
[image] False

Definition

The term computer aided manufacturing (CAM) refers primarily to the use of robotics in process control.

  True
  False

Term

 

[image] True
False

Definition

Poor layouts are found in both manufacturing and service organizations.

  True
  False
Term

 

batch
project
[image] intermittent
continuous
job shop
Definition

Which of the following process types would be more likely to be used in the introductory phase of a product's life-cycle?

  batch
  project
  intermittent
  continuous
  job shop
Term

 

True
[image] False

Definition

A manufacturing cell allows the production of a wide-range of very different products.

  True
  False
Term

 

[image] Project
Batch
Assembly
Job-Shop
Continuous

Definition

Which type of processing system tends to produce the most product variety?

  Project
  Batch
  Assembly
  Job-Shop
  Continuous
Term

 

True
False

Definition

As a general rule, continuous processing systems produce products for inventory rather than for customer order.

  True
  False

Term
variety in products/services
flexibility of equipment
[image] volume of output
all of these
none of these
Definition

Which of the following is a primary concern for process selection?

  variety in products/services
  flexibility of equipment
  volume of output
  all of these
  none of these
Term

 

True
False

Definition

A disadvantage of a product layout can be high in-process inventory costs.

  True
  False

Term

 

True
False

Definition

Process layouts feature departments or other functional groupings of personnel or equipment.

  True
  False

Term

 

I, II, and III
I and III
[image] I and IV
II and IV
II and III
Definition

The advantages of automation include:
(I) Reduced output variability.
(II) Reduced variable costs.
(III) Machines don't strike or file grievances.
(IV) Machines are always less expensive than human labor.

  I, II, and III
  I and III
  I and IV
  II and IV
  II and III
Term

 

True
False

Definition

Process layouts allow greater flexibility in processing than product layouts.

  True
  False

Term

 

True
False

Definition

A possible disadvantage of a product layout is an inflexible system.

  True
  False

Term
True
False

Definition

Intermittent processing can take the form of batch processing or a job shop.

  True
  False

Term
True
False

Definition

Repetitive processing systems usually produce goods specifically for customer orders rather than for inventory.

  True
  False

Term

 

True
False

Definition

Numerically controlled (N/C) machine and some robots are applications of programmable automation.

  True
  False

Term

 

True
[image] False

Definition

The design of service layouts, e.g., warehouse and supermarket layouts, focuses on cost minimization and product flow.

  True
  False

Term

 

[image] True
False

Definition

Product layouts involve high utilization of labor and equipment.

  True
  False

Term

 

True
[image] False

Definition

Avoiding bottlenecks is the primary goal of product design.

  True
  False

Term

 

True
False
Definition

Morale problems can be a reason for redesign of a facility layout.

  True
  False
Term

 

True
False

Definition

A cafeteria line would be an example of a process focused layout.

  True
  False

Term

 

True
False
Definition

Information technology refers to competitive data.

  True
  False

Term

.

True
[image] False

Definition

A process layout is more susceptible to shutdowns caused by equipment breakdowns than a product layout.

  True
  False

Term

 

True
False

Definition

Mismatches between operational capabilities and market demand can have a negative impact on an organization.

  True
  False

Term

 

  job shop
[image] repetitive
batch
continuous
subcontracting
Definition

Which of the following is not a process commonly considered in making products or delivering services?

  job shop
  repetitive
  batch
  continuous
  subcontracting
Term

 

process control
product design
decision making
quality control
data analysis
Definition

Computer-aided manufacturing (CAM) refers to the use of computers in:

  process control
  product design
  decision making
  quality control
  data analysis
Term

A group of machines including supervisory computer control, automatic material handling, and possibly robots is called:

a manufacturing cell
computer-integrated manufacturing
computer-aided manufacturing
a flexible manufacturing system
computer aided design
Definition

A group of machines including supervisory computer control, automatic material handling, and possibly robots is called:

  a manufacturing cell
  computer-integrated manufacturing
  computer-aided manufacturing
  a flexible manufacturing system
  computer aided design
Term

An operations strategy for process selection should recognize that:

engineering "white elephants" are uncommon
process selection seldom requires technical expertise
flexibility is not always the best choice
most technical skills can be contracted out to consultants
there is little need to manage technology
Definition

An operations strategy for process selection should recognize that:

  engineering "white elephants" are uncommon
  process selection seldom requires technical expertise
  flexibility is not always the best choice
  most technical skills can be contracted out to consultants
  there is little need to manage technology
Term

 

customer attitude and image
cost minimization and product flow
frequency of orders
all of these are important
none of these are important
Definition

Which one of the following is not considered an important factor in service layout design?

  customer attitude and image
  cost minimization and product flow
  frequency of orders
  all of these are important
  none of these are important
Term

 

product
process
mass
batch
fixed-position
Definition

The type of layout in which workers, materials, and equipment are moved to the product as needed is:

  product
  process
  mass
  batch
  fixed-position
Term
install computer terminals every 500 feet
hold material handling costs to 27% or less
use workers and space efficiently
reduce bottlenecks
move materials and workers simultaneously
Definition

Layout design has many objectives, one of which is ______.

  install computer terminals every 500 feet
  hold material handling costs to 27% or less
  use workers and space efficiently
  reduce bottlenecks
  move materials and workers simultaneously
Term

 

project
non-repetitive
assembly
flow
process
Definition

A service organization (for example, a hospital) is likely to use a ________ layout because of variability in customer processing requirements.

  project
  non-repetitive
  assembly
  flow
  process
Term

 

continuous flow
assembly line
non-repetitive process
cellular layout
job shop
Definition

A product focused, single piece flow, pull production system would be called a:

  continuous flow
  assembly line
  non-repetitive process
  cellular layout
  job shop
Term

 


general-purpose technology
efficiency
flexibility
low risk
possible variety

 

Definition

What is it about continuous processes that make them appropriate for products in the maturity phase of their life-cycle?

  general-purpose technology
  efficiency
  flexibility
  low risk
  possible variety

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