OPMA 3306 Ch. 6 Exam 2
False
In practice, achieving a perfectly balanced plant is usually desirable but impossible.
False
The ultimate in plant flexibility is a one-hour-changeover time plant.
True
Capacity can be defined as the ability to hold, receive, store, or accommodate
True
Capacity flexibility means having the ability to rapidly increase or decrease production levels, or to shift production capacity quickly from one product or service to another.
False
Capacity planning is generally viewed in three time durations: Immediate, Intermediate and Indeterminate.
True
Economies of scope exist when multiple products can be produced at a lower cost in combination than they can separately.
B) Batches of more than 20 units should be run on machine B Machine A: 10 + 2Q. Machine B: 30 + 1Q. Point of indifference is where 10 + 2Q = 30 + Q or Q = 20. Thus, B is the most correct answer.
In a workcenter, machine A has a ten minute set-up time per batch and a two minute per unit run time. Machine B performs the identical function but has a set-up time of thirty minutes and a one minute run time per unit. The workcenter makes products in batches ranging from one unit to one hundred units. Assuming capacity is not a limitation on either machine, on which batches should machine B be used?
False
In decision tree analysis the time value of money is ignored because you are only concerned with cash costs.
True
In practice achieving a perfectly balanced plant is usually both impossible and undesirable.
False
A capacity cushion is the amount of capacity less than expected demand.
False
A decision tree problem does not need probabilities or payoffs to generate a solution.
True
Because services cannot be stored for later use, service managers consider time as one of their supplies or resources.
True
Best operating level is the volume of output at which average unit cost is minimized.
True
Capacity can be defined as the amount of available resource inputs relative to requirements for output over a particular period of time
False
The capacity cushion is the ratio of capacity used to the best capacity level.
B) The company's total margin will be less than its investment Margin per unit = $30 - $15 = $15. $15 x 15,000 units = $225,000. Since $225,000 < $256,000 the total projected margin for this product will be less than the investment required.
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?
B) 0.833 Using equation 6.5, [25/(6 x 5)] = 0.833.
You have just determined the actual number of workstations that will be used on an assembly line to be 6 using the assembly-line balancing procedure. The cycle time of the line is 5 minutes and the sum of all that tasks required on the line is 25 minutes. Which of the following is the correct value for the resulting line's efficiency?
C) 0.750 Using equation 6.5, [60/(8 x 10)] = 0.750.
You have just determined the actual number of workstations that will be used on an assembly line to be 8 using the assembly-line balancing procedure. The cycle time of the line is 10 minutes and the sum of all that tasks required on the line is 60 minutes. Which of the following is the correct value for the resulting line's efficiency?
A) The size and bulk of the product
A difference between project and continuous flow categories of process flow structures is which two of the following?
False
A piece of equipment with twice the capacity of another piece typically costs twice as much to purchase and to operate.
False
A production facility develops virtuosity and works best when it focused on a widely varied set of production objectives.
True
A production facility works best when it focuses on a fairly limited set of production objectives.
D) Inventory/flow time
According to Little's Law, which of the following ratios is used to find throughput rate?
B) Throughout rate times Flow time
According to Little's law, which of the following can be used to estimate work-in-process inventory?
C) 8,000 units $50 - $35 = $15. $120,000/$15 = 8,000 units
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?
E) 1,000 units $25 - $10 = $15. $15,000/$15 = 1,000 units.
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?
False
In a decision tree, the only time probabilities are applied to a decision node is when the decision is being made by someone else such as you customer or your competitor.
True
Outsourcing is a common source of external capacity.
False
Overtime and personnel transfers are solutions to capacity problems in the intermediate term.
True
Sharing capacity is a common source of external capacity.
False
The smaller the capacity cushion the better
True
The basic notion of economies of scale is that as a plant gets larger and volume increases, the average cost per unit of output drops.
False
The capacity utilization rate is found by dividing best operating level by capacity used.
True
The frequency of adding to productive capacity should balance the costs of upgrading too frequently and the costs of upgrading too infrequently.
False
The larger the capacity cushion the better.
True
The objective of strategic capacity planning is to determine the overall capacity level of capital intensive resources (including facilities, equipment, and overall labor force size) that best supports the company's long-range competitive strategy.
False
The objective of strategic capacity planning is to determine the overall capacity level of capital intensive resources (including facilities, equipment, and overall labor force size) that best supports the company's short-range competitive strategy.
False
The objective of strategic capacity planning is to provide an approach for determining the overall capacity level of labor-intensive resources.
E) Emergency exits
The placement of which of the following is not determined by production process organization decisions?
False
The probability of each occurrence at a decision tree chance node is the reciprocal of the number of possibilities at the chance node.
False
The problem of keeping demand sufficiently high to keep a large factory busy is a sales issue and not a diseconomy of scale.
A) 3 Using equation 6.4, (4 + 6 + 7 + 2 + 6 + 5)/10 = 3.
Using the assembly-line balancing procedure, which of the following is the theoretical minimum number of workstations if the task times for the six tasks that make up the job are 4, 6, 7, 2, 6, and 5 minutes, and the cycle time is 10 minutes?
True
When a firm's design capacity is less than the capacity required to meet its demand, it is said to have a negative capacity cushion.
True
At some point, the size of a growing plant can become too large and diseconomies of scale become a capacity planning problem.
Faslse
Best operating level is usually a multiple of the level of capacity for which a process was designed.
True
In solving a decision tree problem, calculations start at the ends of the "branches" of the tree and work backwards to the base of the tree.
True
Long-range capacity planning requires top management participation.
False
Low rates of capacity utilization in service organizations are never appropriate.
False
Making adjustments to eliminate the variance between planned and actual output is tied into intermediate range capacity planning.
A) 0.72 Using equation 6.3, 1,440 minutes/2000 units = 0.72 minutes per unit.
Using the assembly-line balancing procedure, which of the following is the required cycle time if the production time in minutes per day is 1440 and the required output per day in units is 2000?
C) 9.6 Using equation 6.3, 480 minutes/50 units = 9.6 minutes per unit
Using the assembly-line balancing procedure, which of the following is the required cycle time in minutes per unit if the daily production time is 480 minutes and the required daily output is 50 units?
C) 6 Using equation 6.4, (7 + 4 + 7 + 8 + 9 + 4 + 3 + 6)/8 = 6.
Using the assembly-line balancing procedure, which of the following is the theoretical minimum number of workstations if the task times for the eight tasks that make up the job are 7, 4, 7, 8, 9, 4, 3 and 6 minutes, and the cycle time is 8 minutes?
D) Speed up the assembly line transfer mechanism
When balancing an assembly line, which of the following is not a way to reduce the longest task time below the required workstation cycle time?
True
When evaluating capacity, managers need to consider both resource inputs and product outputs.
D) Assembly Line
Which of the following basic types of process structures is one which equipment or work processes are arranged according to the progressive steps by which the product is made?
B) Workcenter
Which of the following basic types of process structures is one which similar equipment or functions are grouped together?
D) Workcenter
Which of the following is a basic type of process structure?
A) Product-process matrix
Which of the following is not a basic type of process structure?
D) Disposing of left-over machinery and outsourcing ungrouped processes
Which of the following is not a step in developing a manufacturing cell layout?
D) Fabrication
Which of the following is not considered a major work flow structure?
