Exam 2 Operations Management

Exam 2
1.
award:
0 out of
10 points

The objective of strategic capacity planning is to provide an approach for determining the overall capacity level of labor-intensive resources.

| False |
2.
award:
10 out of
10 points

Best operating level is the volume of output at which average unit cost is minimized.

| True | 4. award: 10 out of
10 points

Overtime and personnel transfers are solutions to capacity problems in the intermediate term.

| False |
5.
award:
10 out of
10 points

Capacity flexibility means having the ability to rapidly increase or decrease production levels, or to shift production capacity quickly from one product or service to another.

| True | 6. award: 10 out of
10 points

A production facility works best when it focuses on a fairly limited set of production objectives.

| True |

7. award: 0 out of
10 points

Low rates of capacity utilization in service organizations are never appropriate.

→ | False |
10.
award:
0 out of
30 points

If the actual output of a piece of equipment during an hour is 500 units and its best operating level is at a rate of 400 units per hour, which of the following is the capacity utilization rate?

→ | 1.25 | 11. award: 0 out of
30 points

Compared with a service operation, a manufacturing operation's capacity is which of the following?

→ | Demand can be smoothed by inventory policies |

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13.
award:
30 out of
30 points

The capacity focus concept can be put into practice through a mechanism called which of the following?

| Plants within plants (PWP) | 0 out of
30 points Regarding Capacity Expansion Decision which of the following is/are TRUE?
I. The decision includes timing of capacity increments. II. A reactive expansion strategy is risky. | II only | → | I only