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Multiple Choice Quiz
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1
It is usually a good idea to keep capacity planning separate from product and service design so that the issues in each area don't become intertwined.
A)True
B)False
2
Effective capacity is always less than design capacity.
A)True
B)False
3
Design capacity is the maximum output rate or service rate an operation is designed for.
A)True
B)False
4
Increasing the capacity of a bottleneck operation by 10% will always increase the capacity of the system by 10%.
A)True
B)False
5
Increasing quality will cause an increase in productivity, and hence, and increase in capacity.
A)True
B)False
6
Increasing the capacity of operations that follow a bottleneck operation will improve productivity because it will help those operation to overcome the bottleneck effect.
A)True
B)False
7
If capacity increases require a long time, a following strategy may be the best option.
A)True
B)False
8
Efficiency can be defined as the ratio of actual output to effective capacity.
A)True
B)False
9
Utilization can be defined as the ratio of design capacity to actual output.
A)True
B)False
10
A capacity cushion is the difference between capacity and expected demand.
A)True
B)False
11
The term economies of scale is used to describe the phenomenon whereby increases in the output rate result in a decrease in unit costs.
A)True
B)False
12
Concepts such as cash flow and present value are important financial measures for analyzing capacity alternatives.
A)True
B)False
13
The breakeven point occurs at an output where total cost and total profit are equal.
A)True
B)False
14
The point at which a decision maker is indifferent between two alternatives means both alternatives are optimal.
A)True
B)False
15
Capacity planners must keep a narrow focus in order to stay on track.
A)True
B)False
16
Which one of these is not a determinant of effective capacity, or are they all determinants?
A)Facilities
B)Quality capabilities
C)Job Design
D)Supply chain
E)All are factors
17
Which one of these does not enhance developing capacity alternatives?
A)Designing flexibility into the system.
B)Taking a "big picture" approach.
C)Staying focused on quantitative factors.
D)Smoothing capacity requirements.
18
Which one of these is the primary input in capacity planning?
A)Overall cost estimates.
B)Supply chain capabilities.
C)Competitors' strengths.
D)Past successes or failures.
E)Demand forecasts.
19
Which one of these is not necessarily an important factor in planning service capacity?
A)The inability to store services.
B)The need to be near customers.
C)Demand forecasts.
D)Demand volatility.
20
Which one of these is not a reason for diseconomies of scale?
A)Fixed costs are spread over more units.
B)Distribution costs increase.
C)Complexity increases costs.
D)Inflexibility may be an issue.





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