Operations Exam 2 Study Guide

There is often a trade-off between ________.

More and less specialized equipment.

Less specialized equipment is referred to as "_________", meaning it can be used easily in __________ if set up properly.

Referred to as general purpose, meaning it can be used easily in many different ways if it is set up in the proper manner.

The trade-offs involve the _________, ___________, and _________.

Cost of the equipment (manual drill inexpensive, drill press expensive), setup time (manual drill is quick, drill press takes some time), and time per unit (manual drill is slow, drill-press is quick).

The choice of which specific equipment to use in a process often can be based on an analysis of ________.

Cost trade-offs.

Break-even analysis method is most suitable when processes and equipment entail a large ________ and fixed cost and when variable costs are reasonably proportional to the _________.

Entail a large initial investment and fixed costs, when variable costs are reasonably proportional to the number of units produced.

Example of less specialized vs. more specialized.

Ex) If we need to drill holes in a piece of metal, general-purpose option may be to use a simplified hand drill. An alternative special-purpose drill is a drill press. Given the proper setup, the drill press can drill holes much quicker than the hand drill can.

A break-even chart visually presents alternative ________ and _______ due to the number of units _____ or _____. The choice depends on __________.

Alternative profits and losses due to the number of units produced or sold. Choice depends on anticipated demand.

Break-even analysis; a standard approach to ______________.

Choosing among alternative processes or equipment.

More specialized equipment is referred to as "________", meaning it is often available as _________.

Referred to as "special purpose". Often available as an alternative to a general-purpose machine.