Operations Management Ch.4

When an operation improves its efficiency, its revenue will always stay constant, while its costs will go down.

False

The bottleneck resource in a process has the least idle time.

True

A process has low fixed costs and high variable costs. It is currently capacity-constrained. Will the impact of an efficiency improvement be small or large?

small

Specialization typically lead to a higher average labor utilization

False

Is it possible to increase process capacity by balancing a process.

True

A process is replicated in another country where wages are 50 percent lower. Staffing and processing times are identical. What would be the effect on the costs of direct labor?

Costs of direct labor would be 50 percent lower

Specialization increases the costs of labor because specialists will command a higher wage rate.

False

Which of the following actions does not relate to off-loading the bottleneck?

Increasing wages for production workers

How does the takt time change as the demand rate increases?

The take time decreases.

A group of workers works really hard. In fact, they work so hard that one of them claims to have an average labor utilization of 120 percent. Is that possible?

No

Which of the following statements about takt time and cycle time is true?

Takt time only depends on demand, not capacity. Cycle time does depend on capacity.

You and three of your friends run a car wash for a fund-raiser. Between interior and exterior cleaning, you spend about 40 minutes per vehicle. You are so successful that the next day you invite four more friends to help. How does this impact the labor content?

The labor content stays the same.

How does the target manpower change as the demand rate increases?

The target manpower increases.

A process has high fixed costs and low variable costs. It is currently capacity-constrained. Will the impact of an efficiency improvement be small or large?

large