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SOP Module - II

The document contains multiple choice questions about capacity planning concepts including short-term capacity planning factors, output measures of capacity, peak capacity, reducing bottlenecks, economies of scale, expansionist capacity strategies, capacity cushions, systematic capacity decision making, the theory of constraints, capacity planning tools, and examples calculating capacity utilization and required pumps.

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Juned Aktar
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485 views

SOP Module - II

The document contains multiple choice questions about capacity planning concepts including short-term capacity planning factors, output measures of capacity, peak capacity, reducing bottlenecks, economies of scale, expansionist capacity strategies, capacity cushions, systematic capacity decision making, the theory of constraints, capacity planning tools, and examples calculating capacity utilization and required pumps.

Uploaded by

Juned Aktar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1. Short-term capacity planning deals with which of the following factors?

a) Inventories
b) Workforce size
c) Overtime budgets
d) All of the above
2. Output measures of capacity are preferred for:

a) Flexible flow processes


b) High-volume processes
c) High customization
d) None of the above
3. The maximum output that a process or facility could achieve under normal conditions is called:

a) Peak capacity
b) Capacity utilization
c) Effective capacity
d) None of the above
4. Operation at peak capacity involves:

a) Marginal methods of production


b) Maximum output under normal conditions
c) Sustained low utilization rates
d) None of the above
5. Reduction of bottleneck processes may involve:

a) Expanding the capacity of the designated workstation


b) Reduction of production demand
c) Replicating the designated workstation
d) All of the above
6. Economies of scale are achieved when:

a) Cubic volume of facility construction increases in proportion to its surface area


b) Fixed costs are spread over more units
c) Levels of managerial control are added
d) Answers 1 and 2
7. An expansionist capacity strategy is indicated when:

a) Capacity expansion is consistently ahead of demand


b) An aversion to peak capacity processing exists
c) A pre-emptive marketing strategy is used
d) All of the above
8. Larger capacity cushions, to buffer against uncertainty in demand, may be avoided by:

a) High levels of skill specialization in the workforce


b) High levels of production quality
c) High levels of inventory
d) Answers 2 and 3
9. A systematic approach to capacity decisions includes which of the following steps?

a) Identification of capacity gaps


b) Identification of alternatives to the base case
c) Match each of the top competitors in product features, functions, and costs
d) Answers 1 and 2
10. Which of the following statements is (are) true about the theory of constraints?

a) This theory seeks to avoid sustained operations at peak capacity


b) A management approach focuses on process bottlenecks
c) Bottlenecks are scheduled to maximize their throughput of products or services
d) All of the above
11. Which of the following tools are of least use in capacity planning in the presence of uncertainty
and variability?

a) Simulation models
b) Decision trees
c) Process flowchart
d) Waiting-line mode
12. When evaluating alternative capacity decisions, qualitative concerns exclude:

a) Competitive reaction
b) Technology change
c) Uncertainties about demand
d) Cash flow
13. Under ideal conditions, a picture frame manufacturing facility can produce 480 frames per day.
Under normal conditions, the company schedules 135 frames per day. Current market
conditions and production strategy have combined to limit production to 120 frames per day.
What is the approximate utilization relative to effective capacity?

a) 75%
b) 25%
c) 112%
d) 89%
14. Under ideal conditions, a picture frame manufacturing facility can produce 480 frames per day.
Under normal conditions, the company schedules 135 frames per day. Current market
conditions and production strategy have combined to limit production to 120 frames per day. If
the production manager sets the effective capacity at 100 frames per day, what is the resulting
capacity cushion?

a) 74%
b) 26%
c) 11%
d) None of the above
15. A truck stop along the highway uses fuel pumps that operate at 6 litres per minute. The service
volume is 200 trucks per day and the truck stop operates 24/7/365. It has been determined that
the average purchase is 90 litres and effective utilization is given as 60%. How many pumps
should be available to accommodate this business volume?

a) 6
b) 2
c) 4
d) None of the above

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