Operations SmartBook Chapter 9

______ usually refers to an upper limit on the rate of output.

Capacity

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

Decide whether to use a following or leading strategy. Consider the overall impact on the system and environment.

What are the three primary capacity strategies?

Following Leading Tracking

Identify the situations in which an organization is most likely to decide to outsource.

If the nature of work requires flexible capacity If the organization lacks the expertise

Which of the following improvements will typically increase capacity?

Increasing productivity Reducing changeover times Standardizing output

Which of the following describes a leading capacity strategy?

It builds capacity in anticipation of future demand increases.

Effective capacity is always ______ design capacity.

Less than.

Which of the following factors are probable reasons for actual output being less than the effective capacity?

Machine breakdowns Inventory shortages Employee absenteeism

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

Make provisions for possible future expansion. Take into account the acquisition of capacity chunks. Consider which life cycle stage the product is in.

Which of the following statements are true of capacity cushion?

Organizations that have standard products or services generally have a smaller capacity cushion. Capacity cushion is directly proportional to the degree of demand uncertainty.

Long-term capacity planning decisions relate to ______ of capacity.

Overall level.

Which of the following situations causes 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

Process improvements, batch production, and time to change equipment settings are ______ factors that influence effective capacity.

Process

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

Proximity to raw materials

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.

In the context of forecasting capacity requirements, identify some of the basic demand patterns.

cyclical;stable

Effective capacity is the_____ capacity_____ allowances such as maintenance.

design;minus

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

economies of scales

Design capacity minus allowances such as personal time and maintenance is known as _____.

effective capacity.

Design capacity is the _____ output rate a process is _____for.

maximum; designed

Uniformity of output is a Blank______ factor in determining effective capacity.

product and service

Capacity requirements are often closely linked to the stage of the life cycle that a product or service is in. True false question.

true

In evaluating capacity alternatives, both financial and qualitative analyses must be performed.

true

Which of the following are the key questions to be answered when making capacity planning decisions?

-How much capacity is needed? -What kind of capacity is needed? -When is the capacity needed?

Which of the following are additional questions that should be asked in making capacity planning decisions, beyond the initial key questions?

-How much will it cost? -What are the potential risks? -Should capacity be changed all at once?

Which of the following are not the key questions to be answered when making capacity planning decisions?

-Why is the capacity needed? -From whom should we purchase the capacity?

A hotel room illustrates several of the challenges associated with planning service capacity. Which of the following illustrate these?

A hotel room must be in a location a customer would like to stay. There is high demand during certain times of the year. An empty hotel room cannot be stored for future use.

Which of the following statements accurately reflect the (strategic) importance of capacity decisions?

Capacity decisions impact how well a firm can meet its demand. Capacity decisions affect operating costs. Capacity decisions can affect competitiveness.

Which of the following are long-term capacity alternatives?

Expansion of an existing facility Opening of branch facilities Relocation of existing operations Closing of branch facilities Contraction of an existing facility

True/False: Globalization simplifies capacity decisions because there are more, cheaper options.

False

True/False: The more uniform production output is, the less effective capacity the operation has.

False.

The big-picture approach to capacity changes is also called the ______ approach.

SYSTEMS

Before increasing capacity, it is important to make sure an organization's _____ _____can handle the ramp up.

Supply Chain

Identify the points to be considered when deciding whether to outsource or produce in-house.

The level of expertise available in-house The fixed costs Demand patterns

Which of the following is the correct formula for utilization?

Utilization = Actualoutput/Designcapacity x 100%

In evaluating capacity alternatives, both financial and qualitative analyses must be performed.

True

The amount of capacity in excess of expected demand, given uncertainty about expected demand, is an organization's ______.

capacity cushion