OPM 311 CH 4 HW – Flashcards
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Capacity can be defined as the ability to hold, receive, store, or accommodate.
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True
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When evaluating capacity, managers need to consider both resource inputs and product outputs.
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True
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Capacity can be defined as the amount of available resource inputs relative to requirements for output over a particular period of time.
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True
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The capacity utilization rate is found by dividing best operating level by capacity used
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False
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The objective of strategic capacity planning is to provide an approach for determining the overall capacity level of labor-intensive resources.
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False
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Best operating level is the volume of output at which average unit cost is minimized.
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True
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At some point, the size of a growing plant can become too large and diseconomies of scale become a capacity planning problem.
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True
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Long-range capacity planning requires top management participation.
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True
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Overtime and personnel transfers are solutions to capacity problems in the intermediate term.
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False
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Capacity planning is generally viewed in three time durations: Immediate, Intermediate and Indeterminate.
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False
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A production facility works best when it focuses on a fairly limited set of production objectives.
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True
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The ultimate in plant flexibility is a one-hour-changeover time plant.
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False, zero-hour-changeover
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The frequency of adding to productive capacity should balance the costs of upgrading too frequently and the costs of upgrading too infrequently.
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True
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Outsourcing is a common source of external capacity.
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True
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The probability of each occurrence at a decision tree chance node is the reciprocal of the number of possibilities at the chance node.
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False
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Low rates of capacity utilization in service organizations are never appropriate.
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False
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The smaller the capacity cushion the better.
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False
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Because services cannot be stored for later use, service managers consider time as one of their supplies or resources.
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True
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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
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Economies of scope
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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
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Intermediate Range
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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
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Long-range
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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
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0.75
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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
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1.25
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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
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Immediate product demand
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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
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All of the above
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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.
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True
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RCCP (Rough Cut Capacity Planning) is a top management planning process.
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False
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Detailed Capacity Planning and CRP (Capacity Requirements Planning) are basically the same process.
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True
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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
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Strategic Planning, Resource Planning, Rough Cut Capacity Planning, CRP
