ISDS 3115 Test 2 Chapt S7 – Flashcards
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Capacity
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the "throughput" or number of units a facility can hold, recieve, store, or produce in a period of time
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Design capacity
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the theoretical maximum output of a system in a given period under ideal conditions
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Effective capacity
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the capacity a firm can expect to achieve, given its product mix, methods of scheduling, maintenance, and standards of quality
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Utilization
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actual output as a percent of design capacity
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Efficiency
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actual output as a percent of effective capacity
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Capacity analysis
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a means of determining through-put capacity of workstations or an entire production system
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Bottleneck
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the limited factor or constraint in a system
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Bottleneck time
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the time of the longest (slowest) process; the bottleneck
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Throughput time
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the time it takes for a product to go through the production process with no waiting
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Theory of constraints (TOC)
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a body of knowledge that deals with anything that limits an organization's ability to achieve its goals
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Break-even analysis
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a means of finding the point, in dollars and units, at which costs equal revenues
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Net present value
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a means of determining the discounted value of a series of future cash receipts
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Utilization equation
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actual output/ design capacity
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Efficiency equation
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actual output/effective capacity
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Actual (or expected) output =
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(Effective capacity)(Efficiency)
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Break even point in units (BEPx)
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Total Fixed cost/ (Price - Variable cost)
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Break even point in dollars (BEP$)
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Total Fixed cost/ (1-(Variable Cost/Price))
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Multiproduct BEP$
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Total Fixed cost/ sum ((1-V/P) x (Wi))
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Which of the following approaches may use subcontracting to accommodate excess demand?
A. leading demand with a one-step expansion
B. subcontracting should never be used to accommodate excess demand
C. leading demand with incremental expansion
D. lagging demand with incremental expansion
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D. lagging demand with incremental expansion
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Which of the following approaches makes new capacity a larger increase at the beginning of the time period?
A. attempts to have an average capacity that straddles demand with incremental expansion
B. leading demand with incremental expansion
C. lagging demand with incremental expansion
D. leading demand with a one-step expansion
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D. leading demand with a one-step expansion
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In manufacturing, excess capacity can be used to
A. do more setups, shorten production runs, and drive down inventory costs
B. do fewer steps, shorten production runs, and drive down inventory costs
C. do more setups, lengthen production runs, and drive down inventory costs
D. do fewer steps, lengthen production runs, and drive down inventory costs
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A. do more setups, shorten production runs, and drive down inventory costs
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The most aggressive and risky approach to capacity planning is
A. leading demand with one-step expansion
B. lagging demand with incremental expansion
C. leading demand with incremental expansion
D. attempts to have an average capacity that straddles demand with incremental expansion
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A. leading demand with one-step expansion
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Which of the following is a requirement to be able to compute expected monetary value?
A. each decision alternative needs at least two states of nature
B. each state of nature is equally likely to occur
C. the probability of each decision alternative is known
D. the probability of each state of nature is known
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D. the probability of each state of nature is known
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What does EMV stand for?
A. enterprise management valuation
B. expected machine valuation
C. expected monetary value
D. expected maintenance volume
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C. expected monetary value
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Net Present Value=
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Present Value of Returns + Present Value of Salvage Value - Initial Investment
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Efficiency is given by
A. actual output divided by design capacity
B. design capacity divided by utilization
C. actual output divided by effective capacity
D. effective capacity divided by actual output
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C. actual output divided by effective capacity
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The difference between the selling price and the variable cost is called
A. the break-even point
B. contribution
C. the bottleneck
D. fixed cost
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B. contribution
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What is a means of determining the discounted value of a series of future cash receipts?
A. net present value
B. cash flow
C. variable cost
D. future value
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A. net present value
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Which of the following is a possible option to employ when demand exceeds capacity?
A. temporarily lay-off workers
B. schedule long lead times
C. increase advertising expenditures
D. lower prices
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B. schedule long lead times
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An investment that generates a series of uniform and equal cash amounts is referred as
A. an annuity
B. cash flow
C. net present value
D. future value
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A. an annuity
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What is a means of finding the point, in dollars and units, at which costs equal revenues?
A. bottleneck analysis
B. zero-sum analysis
C. break-even analysis
D. Capacity analysis
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C. break even analysis
