mktg 372 alidaee -- chapter 7

Which of the following is not considered a major work flow structure?

Fabrication

Assume a fixed cost for a process of $100,000. The variable cost to produce each unit of product is $10, and the selling price for the finished product is $50. Ignoring inventory, how many units must the firm sell to break even?

2,500 units

The essential issue in satisfying customers in the make-to-stock environment is to balance the cost of the finished item against the willingness of the consumer to pay for it.

FALSE

Which of the following basic types of process structures is one in which equipment or work processes are arranged according to the progressive steps by which the product is made?

Assembly line

Which of the following is not a step in developing a manufacturing cell layout?

Disposing of leftover machinery and outsourcing ungrouped processes

The placement of which of the following is not determined by production process organization decisions?

Emergency exits

Break-Even Analysis can only be used in production equipment decision making when dealing solely with fixed costs, no variable costs.

FALSE

Process selection refers to the strategic decision of choosing the volume of output to produce in a manufacturing facility depending upon the way that facility produces.

FALSE

The closer the customer is to the customer order decoupling point the longer it takes the customer to receive the product.

FALSE

Workcenter layouts allocate dissimilar machines into cells to work on products that have dissimilar processing requirements.

FALSE

A continuous process indicates production of discrete parts moving from workstation to workstation at a controlled rate.

FALSE - assembly

The time needed to respond to a customer's order is called the customer response time.

FALSE - lead time

A make-to-order firm will work with the customer to design the product, and then make it from purchased materials, parts, and components.

FALSE - raw materials, parts, and components

Which of the following is not a basic type of process structure?

Product-process matrix

A general purpose machine is less capable than a special purpose machine in certain tasks but can perform a broader variety of tasks.

TRUE

A high-level map or diagram of a supply chain process can be useful to understand how material flows and where inventory is held.

TRUE

A project layout is characterized by a high degree of task ordering.

TRUE

A project layout is characterized by a relatively low number of production units in comparison with process and product layout formats.

TRUE

An example of an assemble-to-order firm is Dell Computer.

TRUE

Assembling-to-order means moving the customer order decoupling point from finished goods to components.

TRUE

Break-Even Analysis can be used to help decide whether to perform a task with a special purpose machine or with a general purpose machine.

TRUE

Engineer-to-order firms will work with the customer to design the product, and then make it from purchased materials, parts, and components.

TRUE

One difference between an assembly line process flow and a continuous process flow is that on the assembly line the flow is discrete rather than continuous.

TRUE

One methodology used to evaluate equipment investment decisions where the investment entails an initial investment, fixed costs, and variable costs is Break-Even Analysis.

TRUE

One trade-off illustrated by the product-process matrix is between flexibility and cost.

TRUE

Process selection refers to the strategic decision of selecting which kind of production processes to use to produce a product or provide a service.

TRUE

The closer the customer is to the customer order decoupling point the more quickly the customer receives the product.

TRUE

The essential issue in satisfying customers in the make-to-stock environment is to balance the level of finished inventory against the level of service to the customer.

TRUE

Which of the following basic types of process structures is one in which similar equipment or functions are grouped together?

Work center

Which of the following is a basic type of process structure?

Work center

Assume a fixed cost for a process of $15,000. The variable cost to produce each unit of product is $10, and the selling price for the finished product is $25. Which of the following is the number of units that has to be produced and sold to break even?

1,000 units

You are hired as a consultant to decide if your client should purchase a new, highly specialized piece of equipment. The product to be produced by this equipment is forecast to have a total worldwide demand of 15,000 units over the entire product life. The initial investment to acquire and install the equipment is $256,000. The variable cost to produce each unit will be $15, and the selling price for the finished product will be $30. Which of the following best describes the situation the firm is facing?

The company's total margin will be less than its investment.

In a work center, machine A has a 10-minute set-up time per batch and a 2-minute per unit run time. Machine B performs the identical function but has a set-up time of 30 minutes and a 1-minute run time per unit. The work center makes products in batches ranging from 1 unit to 100 units. Assuming capacity is not a limitation on either machine, in order to minimize the total processing time, on which batches should machine B be used?

Batches of more than 20 units should be run on machine B.

The focus in the make-to-stock environment is on providing finished goods where and when the customers want them.

TRUE

The product-process matrix shows the relationship between process structures and product volume and variety characteristics.

TRUE

The term "assembly line" refers to progressive assembly linked by some material handling device.

TRUE

The volume requirements for the product are one determinant of the choice of which process structure to select.

TRUE

A difference between project and continuous flow categories of process flow structures is which of the following?

The size and bulk of the product

Assume a fixed cost for a process of $120,000. The variable cost to produce each unit of product is $35, and the selling price for the finished product is $50. Which of the following is the number of units that has to be produced and sold to break even?

8,000 units