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Chapter 05.docx

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School
Ryerson University
Department
Global Management Studies
Course
GMS 401
Professor
anon
Semester
Winter

Description
Chapter 05 - Strategic Capacity Planning for Products and Services Chapter 05 Strategic Capacity Planning for Products and Services Multiple Choice Questions 21. Outsourcing some production is a means of _________ a capacity constraint. A. Identifying B. Modifying C. Supporting D. Overcoming E. Repeating Difficulty: Medium TLO: 4 Taxonomy: Knowledge 5-1 Chapter 05 - Strategic Capacity Planning for Products and Services 22. A basic question in capacity planning is: A. what kind is needed B. how much is needed C. when is it needed D. all of the above E. none of the above Difficulty: Easy TLO: 1 Taxonomy: Knowledge 23. Which of these factors wouldn't be subtracted from design capacity when calculating effective capacity? A. personal time B. maintenance C. scrap D. operating hours per day E. all of the above would be subtracted in the calculation TLO: 2ulty: Medium Taxonomy: Knowledge 24. A reason for the importance of capacity decisions is that capacity: A. limits the rate of output possible B. affects operating costs C. is a major determinant of initial costs D. is a long-term commitment of resources E. all of the above Difficulty: Easy Taxonomy: Knowledge 5-2 Chapter 05 - Strategic Capacity Planning for Products and Services 25. Which of the following is the case where capacity is measured in terms of inputs? A. hospital B. theater C. restaurant D. all of the above E. none of the above TLO: 2ulty: Medium Taxonomy: Knowledge 26. Unbalanced systems are evidenced by  A. Top heavy operations B. Labor unrest C. Bottleneck operations D. Increasing capacities E. Assembly lines Difficulty: Medium TLO: 1 Taxonomy: Knowledge 27. Maximum capacity refers to the upper limit of: A. inventories B. demand C. supplies D. rate of output E. finances Difficulty: Medium TLO: 2 Taxonomy: Knowledge 5-3 Chapter 05 - Strategic Capacity Planning for Products and Services 28. The impact that a significant change in capacity will have on a key vendor is a: A. supply chain factor B. process limiting factor C. internal factor D. human resource factor E. operational process factor Difficulty: Medium TLO: 4 Taxonomy: Knowledge 29. The maximum possible output given a product mix, scheduling difficulties, quality factors, and so on, is: A. utilization B. design capacity C. efficiency D. effective capacity E. available capacity TLO: 2ulty: Easy Taxonomy: Knowledge 30. Efficiency is defined as the ratio of: A. actual output to effective capacity B. actual output to design capacity C. design capacity to effective capacity D. effective capacity to actual output E. design capacity to actual output Difficulty: Medium Taxonomy: Knowledge 5-4 Chapter 05 - Strategic Capacity Planning for Products and Services 31. Utilization is defined as the ratio of: A. actual output to effective capacity B. actual output to design capacity C. design capacity to effective capacity D. effective capacity to actual output E. design capacity to actual output TLO: 2ulty: Medium Taxonomy: Knowledge 32. Which of the following is a factor that affects service capacity planning? A. the need to be near customers B. the inability to store services C. the degree of volatility of demand D. the customer's willingness to wait E. all of the above Difficulty: Medium TLO: 4 Taxonomy: Knowledge 33. Which of the following is a tactic that helps service capacity management? A. pricing B. promotions C. discounts D. advertising E. all of the above Difficulty: Medium TLO: 4 Taxonomy: Knowledge 5-5 Chapter 05 - Strategic Capacity Planning for Products and Services 34. The ratio of actual output to effective capacity is: A. design capacity B. effective capacity C. actual capacity D. efficiency E. utilization Difficulty: Medium TLO: 2 Taxonomy: Knowledge 35. The ratio of actual output to design capacity is: A. design capacity B. effective capacity C. actual capacity D. efficiency E. utilization Difficulty: Medium TLO: 2 Taxonomy: Knowledge 36. Given the following information, what would efficiency be? Effective capacity = 80 units per day Design capacity = 100 units per day Utilization = 48% A. 20% B. 35% C. 48% D. 60% E. 80% AACSB: AS Difficulty: Hard TLO: 2 Taxonomy: Knowledge 5-6 Chapter 05 - Strategic Capacity Planning for Products and Services 37. Given the following information, what would efficiency be? Effective capacity = 50 units per day Design capacity = 100 units per day Actual output = 30 units per day A. 40% B. 50% C. 60% D. 80% E. 90% AACSB: AS Difficulty: Medium TLO: 2 Taxonomy: Knowledge 38. Given the following information, what would utilization be? Effective capacity = 20 units per day Design capacity = 60 units per day Actual output = 15 units per day A. 1/4 B. 1/3 C. 1/2 D. 3/4 E. none of these AACSB: AS Difficulty: Medium TLO: 2 Taxonomy: Knowledge 39. Which of the following is not a strategy to manage service capacity? A. hiring extra workers B. backordering C. pricing and promotion D. part time workers E. subcontracting Difficulty: Medium TLO: 4 Taxonomy: Knowledge 5-7 Chapter 05 - Strategic Capacity Planning for Products and Services 40. Which of the following is not a determinant of effective capacity? A. facilities B. product mix C. actual output D. human factors E. external factors Difficulty: Hard TLO: 3 Taxonomy: Knowledge 41. Capacity planning decisions have both long-term and short-term considerations. Which of the following statements are true? (I) Long-term considerations relate to the overall level of capacity. (II) Short-term considerations relate to the probable variations in capacity requirements. (III) Short-term considerations determine the "effective capacity." A. Only one of the three statements is true. B. I and II C. II and III D. I and III E. All three statements are correct. Difficulty: Hard TLO: 1 Taxonomy: Knowledge 42. The extra demand intended to offset uncertainty is a: A. margin protect B. line balance C. capacity cushion D. timing bubble E. none of the above Difficulty: Medium Taxonomy: Knowledge 5-8 Chapter 05 - Strategic Capacity Planning for Products and Services 43. Short-term considerations in determining capacity requirements include: A. demand trend B. cyclical demand variations C. seasonal demand variations D. mission statements E. new product development plans Difficulty: Hard TLO: 4 Taxonomy: Knowledge 44. Which of the following is not a criterion for developing capacity alternatives? A. design structured, rigid systems B. take a big-picture approach to capacity changes C. prepare to deal with capacity in "chunks" D. attempt to smooth out capacity requirements E. identify the optimal operating level Difficulty: Easy TLO: 4 Taxonomy: Knowledge 45. Seasonal variations are often easier to deal with in capacity planning than random variations because seasonal variations tend to be: A. smaller B. larger C. predictable D. controllable E. less frequent Difficulty: Easy Taxonomy: Knowledge 5-9 Chapter 05 - Strategic Capacity Planning for Products and Services 46. Production units have an optimal rate of output where: A. total costs are minimum B. unit costs are minimum C. marginal costs are minimum D. rate of output is maximum E. total revenue is maximum TLO: 5ulty: Medium Taxonomy: Knowledge 47. When the output is less than the optimal rate of output, the unit cost will be: A. lower B. the same C. higher D. could be either higher or lower E. could be either higher, lower or the same AACSB: RT Difficulty: Hard Taxonomy: Knowledge 48. When buying component parts, risk does not include: A. loss of control B. vendor viability C. interest rate fluctuations D. need to disclose proprietary information E. all are risk factors Difficulty: Hard TLO: 4 Taxonomy: Knowledge 5-10 Chapter 05 - Strategic Capacity Planning for Products and Services 49. At the break-even point: A. output equals capacity B. total cost equals total revenue C. total cost equals profit D. variable cost equals fixed cost E. variable cost equals total revenue Difficulty: Easy TLO: 5 Taxonomy: Knowledge 50. What is the break-even quantity for the following situation? FC = $1,200 per week VC = $2 per unit Rev = $6 per unit A. 100 B. 200 C. 600 D. 1,200 E. 300 AACSB: AS Difficulty: Medium TLO: 5 Taxonomy: Application 51. An alternative will have fixed costs of $10,000 pe
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