ops mgmt ch 4

Suppose the flow rate is 100 customers per hour, the average price is $10, the variable cost is $8, and the fixed cost is $50 per hour. What is the profit?

$150

The amount of work that goes into serving one customer is called labor _____________

content

Costs of direct labor measure the labor cost associated with serving one _____________

customer

Being able to line balance without having to observe a fixed sequence will __________ idle time.

decrease

When flow rate goes up but wages per unit of time stay the same, costs of direct labor _________.

decrease

If the cycle time increases--and everything else remains constant--average labor utilization ______.

decreases

When the demand rate increases, the takt time ____.

decreases

Takt time is solely driven by ________ rate.

demand

The labor cost associated with serving one customer is called the costs of _____________ labor.

direct

Average labor utilization equals labor content ______ (cycle time multiplied by number of employees).

divided by

To satisfy all demand we want cycle time to be _______ takt time.

equal to

True or false: Average labor utilization can be greater than 100%.

false

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

false

Specialization usually leads to __________ set-ups.

fewer

The longer the processing time at a resource, the ______ the target manpower for a desired capacity.

greater

A process that is efficient is one where labor utilization is as ______ as possible.

high

The higher the desired capacity at a resource, the ______ the target manpower.

higher

The time a resource is paid but not working is referred to as ___________ time.

idle

Being able to line balance without having to observe a fixed sequence should ________ average labor utilization.

increase

If flow rate goes up then profit will _________

increase

When takt time is less than cycle time target, manpower should ________.

increase

When wages per unit of time go up but flow rate stays the same, costs of direct labor _________.

increase

When the demand quantity goes down, the takt time ________.

increases

Labor utilization ______ a measure of efficiency.

is

The more a resource is idle the ____ its utilization.

lower

If takt time is less than cycle time then we are ______ demand.

not satisfying all

Specialization usually leads to ______________ processing times.

shorter

When quantity demanded goes up, ________. labor content increases labor content decreases takt time decreases target manpower increases

takt time decreases target manpower increases

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

the takt time decreases

________ ________ time is the amount of idle time per flow unit added up across all resources.

total idle

True or false: To calculate total idle time, one must know the amount of idle time per flow unit.

true

Off-loading the bottleneck by reassigning activities to another resource is called line ___________

balancing

If we know the flow rate and capacity of each labor resource that work in a process, we ______ compute the average labor utilization across employees.

can

If cycle time is greater than the takt time then the process is ________ constrained.

capacity

Given the following information, calculate the daily profit for the firm. Flow rate = 100 units/day, Average price = $5.00, Average cost = $2.50

5-2.5 = 2.5*100 = 250

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 statements about takt time and cycle time is true? Takt time only depends on demand, not capacity. Cycle time does depend on capacity. Takt time only depends on capacity, not demand. Cycle time depends on demand. Takt time and cycle time only depend on capacity. Takt time and cycle time only depend on demand.

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

A nonbottleneck worker currently has an idle time of 20 seconds per unit. Because of the large demand, the company improves the process by adding more capacity to the bottleneck. How does this impact the idle time of the worker?

The idle time would decrease.

What happens to the target manpower if the labor content is doubled?

The target manpower doubles

Which of the following contribute to labor content? The time an unmanned machine spends working on a flow unit The time the flow unit spends as buffer inventory The time a worker works on the flow unit The time a worker spends inspecting a flow unit

The time a worker works on the flow unit The time a worker spends inspecting a flow unit

The calculation of labor content requires ______ all of the processing times for serving one flow unit.

adding

An appropriate unit for takt time is: (Select all that apply.) hours/customers minutes seconds/burger hours

hours/customers second/burger

Suppose the flow rate for a process is 200 units per hour and a process improvement reduces variable cost by $1. What will happen to profits?

increase by 200 an hour

To increase profit a firm can do the following: increase flow rate increase average price decrease average cost increase inventory

increase flow rate increase average price decrease average cost

We refer to the improvement strategy of moving work away from the bottleneck step as _____.

off-loading the bottleneck

An accurate measure of labor content is ______.

seconds per customer

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

As process capacity increases, takt time ______.

stays the same