OPM 311 CH 4 HW

Capacity can be defined as the ability to hold, receive, store, or accommodate.
True
When evaluating capacity, managers need to consider both resource inputs and product outputs.
True
Capacity can be defined as the amount of available resource inputs relative to requirements for output over a particular period of time.
True
The capacity utilization rate is found by dividing best operating level by capacity used
False
The objective of strategic capacity planning is to provide an approach for determining the overall capacity level of labor-intensive resources.
False
Best operating level is the volume of output at which average unit cost is minimized.
True
At some point, the size of a growing plant can become too large and diseconomies of scale become a capacity planning problem.
True
Long-range capacity planning requires top management participation.
True
Overtime and personnel transfers are solutions to capacity problems in the intermediate term.
False
Capacity planning is generally viewed in three time durations: Immediate, Intermediate and Indeterminate.
False
A production facility works best when it focuses on a fairly limited set of production objectives.
True
The ultimate in plant flexibility is a one-hour-changeover time plant.
False, zero-hour-changeover
The frequency of adding to productive capacity should balance the costs of upgrading too frequently and the costs of upgrading too infrequently.
True
Outsourcing is a common source of external capacity.
True
The probability of each occurrence at a decision tree chance node is the reciprocal of the number of possibilities at the chance node.
False
Low rates of capacity utilization in service organizations are never appropriate.
False
The smaller the capacity cushion the better.
False
Because services cannot be stored for later use, service managers consider time as one of their supplies or resources.
True
The ability to rapidly and inexpensively switch production from one product to another enables what are sometimes referred to as:
Economies of shipping
Economies of scope
Economies of scale
Economies of shape
Economies of size
Economies of scope
Capacity planning that involves hiring, layoffs, some new tooling, minor equipment purchases, and subcontracting is considered as which one of the following planning horizons?
Short range
Upcoming
Long range
Current
Intermediate range
Intermediate Range
Capacity planning involving acquisition or disposal of fixed assets such as buildings, equipment or facilities is considered as which one of the following planning horizons?
Short-range
Upcoming
Current
Long-range
Intermediate-range
Long-range
If the best operating level of a piece of equipment is at a rate of 400 units per hour and the actual output during an hour is 300 units, which of the following is the capacity utilization rate?
300
1.33
0.75
1.00
2.33
0.75
If the actual output of a piece of equipment during an hour is 500 units and it’s best operating level is at a rate of 400 units per hour, which of the following is the capacity utilization rate?
1.33
100
1.25
0.75
1.00
1.25
When deciding to add capacity to a factory which of the following need not be considered?
Use of external capacity
Maintaining system balance
Immediate product demand
Availability of raw materials
The frequency of capacity additions
Immediate product demand
What is an important difference between capacity planning in services as contrasted to capacity planning in manufacturing operations?
Demand volatility
Time
Utilization impacts service
All of the above
Location
All of the above
Resource Planning is a top management planning activity owned by top management. It is typically prepared for them by others in the organization but reviewed and approved by top management.
True
RCCP (Rough Cut Capacity Planning) is a top management planning process.
False
Detailed Capacity Planning and CRP (Capacity Requirements Planning) are basically the same process.
True
The levels of Capacity Planning as they line up with the ERP business model (top to bottom) are:
Strategic Planning, Rough Cut Capacity Planning, Resource Planning, CRP
Strategic Planning, Resource Planning, Rough Cut Capacity Planning, CRP
Strategic Planning, Rough Cut Capacity Planning, Detailed Capacity Planning
Rough Cut Capacity Planning, Capacity Requirements Planning, Resource Planning, Detailed Capacity Planning
Strategic Planning, Resource Planning, Rough Cut Capacity Planning, CRP