EBTM 365 Exam #1

capacity planning process

1. estimate future capacity requirements 2. evaluate existing capacity and identify gaps 3. identify alternatives for meeting requirements 4. conduct financial analyses for each alternative 5. asses key qualitative issues for each alternative 6. select, implement, and monitor the best alternative to pursue

place the following steps for resolving constraint issues in order:

1. identify the most pressing constraint 2. change the operation to achieve max benefit, given the constraint 3. make sure all other parts of the process support the constraint 4. explore and evaluate alternatives 5. repeat until the level of constraints is acceptable

steps for resolving constraint issues:

1. identify the most pressing constraint 2. change the operation to achieve maximum benefit, given the constraint 3. make sure all other parts of the process support the constraint 4. explore/evaluate alternatives 5. repeat until the level of constraints is acceptable

the key steps in strategy formulation are listed below. put them in order:

1. link strategy directly to the organization's mission/vision statement 2. Assess SWOT analysis 3. identify order winners and order qualifiers 4. select one or two strategies

which of the following are the three basic business strategies?

1. low cost 2. responsiveness 3. differentiation

Utilization formula

= (Actual output / effective capacity) x 100%

match the following operations decision areas with what the decision affects

Inventory: cost, shortages Maintenance: cost, equipment, reliability, productivity Scheduling: efficiency, flexibility Supply Chains: costs, quality, vendor relations, agility, shortages Projects: cost, new products, services, or operating systems

match the following productivity measure to their categories:

Partial Measure: shoes/labor hours bug fixes/programmer textbooks/printers Multifactor Measure: miles of road paved/labor hours - machine hours

break-even point formula

Q = FC/R-v

the line's capacity is

a function of it's cycle time

a job shop process is chosen when:

a low volume of high variety goods are produced with a relatively high degree of flexibility

which of the following is NOT a reason that makes service capacity more difficult to plan than manufacturing capacity ?

amount of inventory required

a capacity cushion is _____________ minus ___________ demand. it is used when there is uncertainty about future demand.

capacity, expected

the key aspects of an organization's process strategy are

capital intensity and flexibility

two important terms in financial analysis are ______ flow and _________ value.

cash flow present value

competitiveness defines how efficiently an organization meets the wants and needs of _____________ relative to others that offer similar goods/services

consumers

which of the following statements is true regarding a company's core competencies?

core competencies must be aligned with an organization's strategies

identify some basic demand patterns

cyclical stable

which of the following is NOT a reason for economies of scale?

decision making becomes easier as output rates increase

utilization is the ratio of actual output to _________ capacity. It is expressed as a __________.

design, %

with __________, increasing the output rate results in decreasing the average unit cost, if the output rate is less than the optimal rate.

economies of scale

which is the narrower concept?

efficiency

which of the following are examples of info technology used in operations?

email, ecommerce, internet bar codes and radio frequency

process layouts

equipment is arranged by type rather than processing sequence process layouts often use high skilled labor process layouts are common in service environments

what are the outputs to process selection and capacity planning?

facilities/equipment, layout, work design

true or false: the more uniform production output is, the less effective capacity the operation has

false

true or false: the more uniform production output is, the less effective capacity the operation has.

false

increasing _______ allows the firm to be more responsive to changing market conditions.

flexibility

rank the different types of automation technology in terms of ease of making changes to it once it is implemented:

flexible programmable fixed

before tasks are assigned to workstations, what must be known?

heuristic rules cycle time task order of precedence

a continuous process is used for nondiscrete highly standardized outputs when a

high volume and low flexibility is needed

which of the following describes a leading capacity strategy?

it builds capacity in anticipation of future demand increases

which of the following is true of time based strategy?

it focuses on reducing the time required to accomplish various activities

when organizations use a low-cost, high volume strategy, what is the impact on the variety of products offered to the consumer?

it is lower

with cost-volume analysis, what is the assumption regarding variable cost per unit?

it is the same regardless of volume

in service layout design, if customer contact and customization are high, the process type and layout type are which of the following?

job shop/functional layout

a constraint __________ the performance of a system in achieving its ___________.

limits, goals

which of the following factors directly affect the effective capacity?

machine breakdowns inventory shortages employee absenteeism

which of the following statements is true regarding manufacturing productivity?

manufacturing productivity is often less difficult to measure than service productivity

which of the following is NOT an input to process selection?

marketing strategy

design capacity is the _________ output rate process is ______ for.

maximum, designed

negative consequences of an unbalanced line?

morale problems due to unequal balance of work idle time at faster workstations

which statement is NOT true ?

operations strategy deals with things like financing, costing, and product development

capacity planning

performed concurrently with process selection, the decisions are strategic and long lasting, and difficult to change after implementation

match the layout with the type of characteristic

product: repetitive processing project: fixed position process:intermittent processing

which of the following statements is always TRUE?

quality-based strategies focus on improving quality

disadvantages of process layouts

routing and scheduling can pose several challenges material handling is slow and inefficient equipment utilization rates are low

Tactics are the methods and actions taken to accomplish __________.

strategies

before increasing capacity, it is important to make sure an organization's ____________ ________________ can handle the ramp up.

supply chain

tactics are

the methods and actions taken to accomplish strategies

indifference point

the quantity at which two competing alternatives are equivalent

a project process type is different from the others in that:

this is for work that is NONROUTINE with a unique set of objectives to be accomplished in an intermittent time frame

what is the main objective in designing product layouts?

to arrange workers and machines in the sequence that operations will be performed

true or false: in evaluating capacity alternatives, both financial and qualitative analyses must be performed.

true

in which of the following cases can the emphasis on efficiency, over utilization, be misleading?

when the effective capacity is low compared to design capacity

which of the following are ways in which operations influences competitiveness?

- companies that are able to respond -location

which of the following statements are true?

-SWOT can be seen as the link b/w organizational and operational strategy -SWOT critically examines factors that may impact business performance

which of the following is true about a company's mission?

-a company's mission is the foundation for its goals, which provide detail and scope for the mission -a mission statement specified the purpose of an organization

improving which of the following aspects of a firm's operations can increase its capacity?

-bottleneck management -efficiency -utilization

which of the following may prove to be challenging ways to measure capacity?

-capacity based on revenues generated -capacity based on units of output

which of the following statements accurately reflect the importance of capacity decisions?

-capacity decisions can affect competitiveness -capacity decisions impact how well a firm can meet its demand -capacity decisions affect operating costs

which of the following are ways to enhance the development of capacity strategies?

-consider the overall impact on the system and environment -decide whether to use a following or leading strategy

business organizations compete through some combination of which of the following?

-delivery time -price -product/service differentiation

which of the following are assumptions of cost-volume analysis?

-everything produced can be sold -revenue per unit exceeds variable cost per unit -the variable cost per unit is the same regardless of volume

long-term capacity alternatives include which of the following?

-expanding an existing facility -opening branch facilities -closing brand facilities -contracting an existing facility -relocating existing operations

which of the following are factors that always DECREASE productivity

-high labor turnover -viruses

which of the following internal factors can affect business?

-human resources -supplier relationships

which of the following are ways in which operations influences competitiveness?

-managers and workers can be very important to how customers perceive a company, this day-to-day functioning is part of the operations of a business -operations is responsible for ensuring product quality, which in turn, is a selling point for customers

which of the following are possible steps a company can take to continuously improve productivity?

-measure productivity of all operations -take a systems viewpoint to ensure changes impact the system as a whole -set reasonable improvement goals

which of the following are true of operational strategy?

-operations strategy and financial strategy must be aligned -operational strategy and organizational strategy must be aligned

which of the following situations caused a misjudgment of a firm's capacity requirements?

-predictions focus mainly on the potential revenue that will be earned -marketing personnel are overly optimistic in their predictions

how is productivity is measured

-ratio of outputs to inputs -measures the effective use of resources

which of the following improvements will typically increase capacity?

-reducing changeover times -increasing productivity -standardizing output

which of the following statements about service productivity is true?

-service productivity is often more difficult to measure than manufacturing productivity -process yield can be used to measure service productivity in certain situations

which of the following statements about variability in capacity planning/forecasting are true?

-service systems have considerable variability in service requests, making capacity planning challenging -service systems have considerable variability in service time, making capacity planning challenging

which of the following are factors that improve productivity?

-standardization -incentive plans

which of the following are points of consideration when deciding whether to outsource or produce in-house?

-the available capacity -the level of quality available/desired -the nature of demand

which of the following statements about productivity measures is/are true?

-they can be used to track performance over time -they can be used to evaluate a company's competitiveness

which of the following are reasons why businesses fail?

-underestimating the importance of internal communication and cooperation b/w functional areas -not investing enough in necessary capital or human resources

which of the following are NOT key questions regarding capacity decision planning?

-why is the capacity needed? -from whom should we purchase the capacity?