Supply Chain Management Study Set 2

Statistics

Quiz 4 :

Strategic Capacity Management

Quiz 4 :

Strategic Capacity Management

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Long-range capacity planning requires top management participation.
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True False
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True

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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 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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The ultimate in plant flexibility is a one-hour-changeover time plant.
True False
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Overtime and personnel transfers are solutions to capacity problems in the intermediate term.
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Best operating level is usually a multiple of the level of capacity for which a process was designed.
True False
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Capacity planning is generally viewed in three time durations: Immediate, Intermediate, and Indeterminate.
True False
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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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A piece of equipment with twice the capacity of another piece typically costs twice as much to purchase and to operate.
True False
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The basic notion of economies of scale is that as a plant gets larger and volume increases, the average cost per unit of output drops.
True False
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Best operating level is the volume of output at which average unit cost is minimized.
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When evaluating capacity, managers need to consider both resource inputs and product outputs.
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The objective of strategic capacity planning is to determine the overall capacity level of capital intensive resources (including facilities, equipment, and overall labor force size) that best supports the company's long-range competitive strategy.
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The objective of strategic capacity planning is to determine the overall capacity level of capital intensive resources (including facilities, equipment, and overall labor force size) that best supports the company's short-range competitive strategy.
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The capacity utilization rate is found by dividing best operating level by capacity used.
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Making adjustments to eliminate the variance between planned and actual output is tied into intermediate range capacity planning.
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The problem of keeping demand sufficiently high to keep a large factory busy is a sales issue and not a diseconomy of scale.
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Capacity can be defined as the ability to hold, receive, store, or accommodate.
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At some point, the size of a growing plant can become too large and diseconomies of scale becomes a capacity planning problem.
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A production facility develops virtuosity and works best when it focused on a widely varied set of production objectives.
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