ch 5

Increasing _____ allows the firm to be more responsive to changing market conditions.

flexibility

The three primary capacity strategies are _____, _______, and _______.

leading, following, tracking

Design capacity is the _____ output rate a process is ______ for.

maximum, designed

Effective capacity is the ____ capacity _____ allowances such as maintenance.

design, minus

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

Amount of inventory required.

Place the following steps in the capacity planning process in the correct order.

1 estimate future cap 2 eval exisiting cap and id gaps 3 id alts for meeting req 4 conduct financial analyses of each alt 5 asses keey qual issues for each alt 6 select, implement, and monitor the best alt to purse

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

Long-term capacity alternatives include which of the following?

Contracting an existing facility Closing branch facilities Expanding an existing facility Relocating existing operations Opening branch facilities

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

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

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

Efficiency Bottleneck management Utilization

True or false: Globalization simplifies capacity decisions because there are more, cheaper options.

False

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

False

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

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

Which of the following describes a leading capacity strategy?

It builds capacity in anticipation of future demand increases.

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 situations causes a misjudgment of a firm's capacity requirements?

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

Which of the following are correct formulas for profit?

P = (R-v)Q - FC P = RQ - (FC + vQ)

Which of the following statements about variability in capacity planning/forecasting is/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 points for consideration when deciding whether to outsource or produce in-house?

The nature of demand The level of quality available/desired The available capacity

Which of the following are assumptions for cost-volume analysis?

There is only one product. Per unit revenue exceeds per unit variable cost. The variable cost per unit does not change.

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

True

True or false: 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?

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

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

overall level

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

product and service

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

stable cyclical