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Exam 19: Capacity and Constraint Management

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Question 21

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Which of the following statements regarding fixed costs is true?

A) Fixed costs rise by a constant amount for every added unit of volume.
B) While fixed costs are ordinarily constant with respect to volume,they can "step" upward if volume increases result in additional fixed costs.
C) Fixed costs are those costs associated with direct labour and materials.
D) Fixed costs equal variable costs at the break-even point.
E) Fixed cost is the difference between selling price and variable cost.

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Question 22

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The process time of a system is always at least a long as the process cycle time.

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Question 23

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Multiproduct break-even analysis calculates the ________ of each product,________ it in proportion to each product's share of total sales.

Which of the following is false regarding capacity expansion?

The process time of a system is equivalent to the

Which of the following approach to capacity expansion "straddles" demand?

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

Net present value

The Academic Computing Centre has five trainers available in its computer labs to provide training sessions to students.Assume that the design capacity of the system is 1900 students per semester and that effective capacity equals 90% of design capacity.If the number of students who actually got their orientation session is 1500,what is the efficiency of the system?

If capacity exceeds demand at a new facility,an organization can use which of the following to move demand?

Fixed costs are those costs that continue even if no units are produced.

Expected output is sometimes referred to as rated capacity.

Define variable costs.What special assumption is made about variable costs in the textbook?

Net present value will be greater

Distinguish between utilization and efficiency.

A useful tactic for increasing capacity is to redesign a product in order to get more throughput.

A firm is considering adding a second secretary to answer phone calls and make appointments.The cost of the secretary will be $10/hour and she will work 200 hours each month.If each new client adds $400 of profit to the firm,how many clients must the secretary arrange for the firm to break even? Suppose that the secretary has an equal chance of providing either 0,2,or 6 new clients each month.Should the firm hire the secretary?

A fleet repair facility has the capacity to repair 800 trucks per month.However,due to scheduled maintenance of their equipment,management feels that they can repair no more than 600 trucks per month.Last month,two of the employees were absent several days each,and only 400 trucks were repaired.What are the utilization and efficiency of the repair shop?

Consider a production line with five stations.Station 1 can produce a unit in 9 minutes.Station 2 can produce a unit in 10 minutes.Station three has two identical machines,each of which can process a unit in 12 minutes (each unit only needs to be processed on one of the two machines) .Station 4 can produce a unit in 5 minutes.Station 5 can produce a unit in 8 minutes.Which station is the bottleneck station?

The net present value of $10,000 to be received in exactly three years is considerably greater than $10,000.