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The staff training center at a large regional hospital provides training
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Chapter  7S:  Capacity  and  Constraint

Management  answers

Summer  2011,  Exam  2

8)

Utilization will always be lower than efficiency because

A.

Effective capacity is less than design capacity.

B.

Effective capacity is greater than design capacity.

C.

Effective capacity

equals design capacity.

D.

False, Utilization and efficiency are equal in value.

E.

False, Utilization is normally greater than efficiency.

Answer: A

11)

The staff training center at a large regional hospital provides training sessions in

CPR to all employees

. Assume that the capacity of this training system was designed to

be 1200 employees per year. Since the training center was first put in use, the program

has become more complex, so that 1050 now represents the most employees that can

be trained per year

. In the past year, 950 employees were trained. The efficiency of this

system is approximately __________ and its utilization is approximately __________.

A.

79.2 percent; 90.5 percent

B.

90.5 percent; 79.2 percent

C.

87.5 percent; 950 employees

D.

950 employees; 105

0 employees

E.

110.5 percent; 114.3 percent

Answer: B

13)

Adding a complementary product to what is currently being produced is a demand

management strategy used when

A.

demand exceeds capacity

B.

capacity exceeds demand for a product which has stable demand

C.

the

existing product has seasonal or cyclical demand

D.

price increases have failed to bring about demand management

E.

efficiency exceeds 100 percent

Answer: C

14)

Of the four approaches to capacity expansion, the approach that "straddles" demand

A.

uses

incremental expansion

B.

uses one

-

step expansion

C.

at some times leads demand, and at other times lags

D.

works best when demand is not growing but is stable

E.

Choices A and C are both correct.

Answer: E

15)

A firm produces three products. Product A sells for \$60

; its variable costs are \$20.

Product B sells for \$200; its variable costs are \$120. Product C sells for \$25; its variable

costs are \$10. Last year, the firm sold 1000 units of A, 2000 units of B, and 10,000 units

of C. The firm has fixed costs of \$320,000

per year. Calculate the break

-

even point of

the firm (Choose the closest answer).

Product

Selling

price P

Variable

cost V

V/P

1

-

V/P

Sales

Percent

of sales

Weighted

contrib

A

\$60

\$20

.333

.667

\$60,000

.0845

.0564

B

\$200

\$120

.600

.400

\$400,000

.5634

.2254

C

\$25

\$10

.400

.600

\$250,000

.3521

.2113

\$710,000

1.0000

.4931

A.

649,000

B.

597,900

C.

656,000

D.

627,400

E.

636,000

Answer: A

Summer  2011,  Exam  3

23) The Academic Computing Center has five trainers available in its computer labs to

provide training

sessions to students. Assume that the capacity of the system is 1900

students per semester and the utilization is 90%. If the number of students who actually

got their orientation session is 1500, what is the efficiency of the system?

A.

1350 students

B.

1710 st

udents

C.

75%

D.

87.7%

E.

90%

Answer: D

Spring  2012,  Exam  2

7) Machine used to produce a part for a stereo speaker can produce 100 parts per hour.

The factory operates 12 hours per day 7 days a week. Due to routine scheduled

maintenance the firm expects the ma

chine to be in use only 95% of the time. The firm

also expect from it’s knowledge of its operating facility to achieve an operating efficiency

of only 85%. What is the expected weekly output for this part?

A.

6,783 parts

B.

8,400 parts

C.

4,845 parts

D.

7,140 parts

E.

100 parts

Answer: A

12

-

13 You have been provided with the following flow process diagram (with activity

times listed) for the production of office chairs. The process occurs 5 days a week for 8

-

hour days. What is the theoretical cycle time for the proc

ess represented above?

12) What is the theoretical cycle time for the system represented above?

A.

5 min

B.

1min

C.

25 min

D.

21 min

13) What is the process time for the system represented above (capacity

of the system)?

A.

5 min

B.

6min

C.

7 min

D.

9 min

ANS: B

14) Which of the following is not one of the four principles of bottleneck management?

A.

Release work orders to the system at the bottleneck's capacity pace.

B.

Lost time at the bottleneck is lost system capacity.

C.

Increasing capacity at non

-

bottleneck stations is a mirage.

D.

Increased bottleneck capacity is increased system capacity.

E.

Bottlenecks should be moved to the end of the system process.

Answer: E

15) Basic break

-

even analysis typically assumes that

A.

revenues

increase in direct proportion to the volume of production, while

costs increase at a decreasing rate as production volume increases

B.

variable costs and revenues increase in direct proportion to the volume of

production

C.

both costs and revenues are made up o

f fixed and variable portions

D.

costs increase in direct proportion to the volume of production, while

revenues increase at a decreasing rate as production volume increases

because of the need to give quantity discounts

3m

2m

6m

2m

1m

5m

5m

2m

1m

3m

5m

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