Question 1

A process's capacity requirement states the future process capacity needed to meet projected customer demands, and includes an allowance for the desired capacity cushion.

Accepted Answer

The statement accurately describes a process's capacity requirement.

Question 2

Depict the expansionist strategy graphically as a plot of capacity against time and discuss the benefits of adopting this strategy.

Accepted Answer

The answer of Depict the expansionist strategy graphically as a...

Question 3

The capacity requirement for a year's output is inversely proportional to the total number of hours available from a single capacity unit per year.

Accepted Answer

According to the statement, capacity requirement is inversely proportional to the total number of hours available from a single capacity unit per year. This means that if the total number of hours available from a single capacity unit per year increases, the required capacity will decrease and vice versa. This is the definition of inverse proportionality, and therefore the statement is true.

Question 4

It takes a service rep an average of two and a half minutes to take a customer's information. Over the course of a work week, the rep handles 160 calls a day during her eight hour shift. What is the service rep's capacity cushion?
A) 16%
B) 33%
C) 50%
D) 66%

Accepted Answer

The service rep's capacity cushion is calculated by finding the difference between the maximum capacity and the actual output, then dividing by the maximum capacity. An eight-hour shift is 480 minutes. At 2.5 minutes per call, the maximum number of calls the rep could handle is 480 / 2.5 = 192 calls. The rep actually handles 160 calls. The capacity cushion is (192 - 160) / 192 = 32 / 192 = 16.67%, which rounds to 16%.

Question 5

Which one of the following factors usually calls for a larger capacity cushion?
A) uncertain demand
B) high capital intensity
C) more reliable equipment
D) high worker flexibility

Accepted Answer

Uncertain demand usually calls for a larger capacity cushion as it allows the company to accommodate unexpected surges in demand without having to invest in additional capacity.

Question 6

What is a capacity cushion? Provide examples of capacity cushions in a university setting and an automotive producer.

Accepted Answer

The answer of What is a capacity cushion? Provide examples...

Question 7

If demand is increasing, and you also prefer to increase the time between capacity increments, then the size of increments should ________.

Accepted Answer

The answer of If demand is increasing, and you also...

Question 8

Kristen made a batch of chocolate chip cookie dough and then had to clean the utensils and mixing bowl before she made a batch of oatmeal raisin cookie dough. The time spent cleaning the bowl and utensils is an example of setup time.

Accepted Answer

Setup time refers to the time spent preparing or getting ready to perform a certain task. In this case, cleaning the bowl and utensils is part of the setup time required to make a different type of cookie dough.

Question 9

If a system is well balanced, which one of the following changes usually calls for a larger capacity cushion?
A) higher capital intensity
B) higher worker flexibility
C) requests for fast delivery times
D) higher inventories

Accepted Answer

Requests for fast delivery times usually require a larger capacity cushion because a shorter lead time leaves less time for unexpected disruptions or delays. This means that a larger capacity cushion is needed to ensure that the system can still meet the delivery deadline even if unexpected events occur. Higher capital intensity, higher worker flexibility, and higher inventories may also require a larger capacity cushion in some cases, but they are not typically associated with the need for a larger capacity cushion as much as fast delivery times.

Question 10

Define each of the following capacity strategies: expansionist, wait-and-see, and follow-the-leader.

Accepted Answer

The answer of Define each of the following capacity strategies:...

Question 11

It takes a service rep an average of two minutes to take a customer's information. Over the course of a work week, the rep handles 160 calls a day during her eight hour shift. What is the service rep's capacity cushion?
A) 20%
B) 33%
C) 50%
D) 67%

Accepted Answer

To calculate the service rep's capacity cushion, we need to first calculate the total time taken to handle 160 calls a day.

Total time = (2 minutes per call) x (160 calls per day) = 320 minutes per day

The service rep works for 8 hours a day, which is 480 minutes. Therefore, her capacity is:

Capacity = (480 minutes - 320 minutes) / 480 minutes = 160 minutes / 480 minutes = 0.33 or 33%

So the correct answer is B.

Question 12

As the desired capacity cushion increases, the processing hours required for a year's demand decrease.

Accepted Answer

As the desired capacity cushion increases, the processing hours required for a year's demand also increase. A capacity cushion is the amount of extra production capacity a company has in order to handle unforeseen demand fluctuations or capacity shortages. Having a larger cushion means that the company is carrying more idle capacity, which ultimately leads to higher processing hours.

Question 13

Output measures are used for estimating capacity requirements when product variety and process divergence are high.

Accepted Answer

Output measures are more effective for estimating capacity requirements when the products or services are standardized, not when there is high product variety and process divergence. For high variety and divergence, input measures (like labor hours or machine hours) are typically more useful.

Question 14

An expansionist capacity strategy:
A) lags behind demand.
B) reduces the risk of overexpansion based on overly optimistic demand forecasts.
C) can preempt expansion by competitors by announcing a large capacity expansion.
D) meets capacity shortfalls with overtime, temporary workers, subcontracting, and stockouts.

Accepted Answer

An expansionist capacity strategy can preempt expansion by competitors by announcing a large capacity expansion.

Question 15

Which one of the following statements about capacity cushions is best?
A) Companies with flexible flow processes tend to have small capacity cushions.
B) Companies with high capital costs tend to have large capacity cushions.
C) Companies that have considerable customization tend to have larger capacity cushions.
D) Constant demand rates require larger-capacity cushions.

Accepted Answer

Companies that have considerable customization tend to have larger capacity cushions as customization increases uncertainty and variability in demand, making it difficult to predict the level of demand and the appropriate level of capacity needed to fulfill it. A larger capacity cushion helps to provide a buffer against demand uncertainty. The other options are not necessarily true as capacity cushions depend on multiple factors such as demand variability, process flow, and production costs.

Question 16

A wait-and-see capacity strategy:
A) involves small, frequent jumps in capacity.
B) minimizes the chance of lost sales due to insufficient capacity.
C) can result in economies of scale and a fast rate of learning, yielding reduced manufacturing costs.
D) stays ahead of demand.

Accepted Answer

A wait-and-see capacity strategy involves small, frequent jumps in capacity to stay ahead of demand. This strategy does not necessarily minimize the chance of lost sales due to insufficient capacity or result in economies of scale and a fast rate of learning.

Question 17

Which one of the following statements concerning capacity cushions is best?
A) Large capacity cushions are used more often when future demand is level and known.
B) Small capacity cushions are preferred in capital intensive firms.
C) Capacity cushions are used primarily in manufacturing organizations, not in service organizations.
D) Small cushions are used in organizations where the products and services produced often change.

Accepted Answer

Small capacity cushions are preferred in capital intensive firms because these firms have high fixed costs and aim to maximize utilization to spread these costs over as many units as possible.

Question 18

________ is the amount of reserve capacity that a firm maintains to handle a sudden increase in demand or temporary losses of production capacity.

Accepted Answer

The answer of ________ is the amount of reserve capacity...

Question 19

What factors should be considered when selecting the appropriate capacity cushion? How does the choice of capacity cushion relate to other decisions in operations management? To other functional areas?

Accepted Answer

The answer of What factors should be considered when selecting...

Question 20

A planning horizon is defined as the set of consecutive time periods considered for planning purposes.

Accepted Answer

A planning horizon is exactly defined as the set of consecutive time periods considered for planning purposes.

Quiz 4: Capacity Planning

A process's capacity requirement states the future process capacity needed to meet projected customer demands, and includes an allowance for the desired capacity cushion.

Depict the expansionist strategy graphically as a plot of capacity against time and discuss the benefits of adopting this strategy.

The capacity requirement for a year's output is inversely proportional to the total number of hours available from a single capacity unit per year.

It takes a service rep an average of two and a half minutes to take a customer's information. Over the course of a work week, the rep handles 160 calls a day during her eight hour shift. What is the service rep's capacity cushion?

Which one of the following factors usually calls for a larger capacity cushion?

What is a capacity cushion? Provide examples of capacity cushions in a university setting and an automotive producer.

If demand is increasing, and you also prefer to increase the time between capacity increments, then the size of increments should ________.

Kristen made a batch of chocolate chip cookie dough and then had to clean the utensils and mixing bowl before she made a batch of oatmeal raisin cookie dough. The time spent cleaning the bowl and utensils is an example of setup time.

If a system is well balanced, which one of the following changes usually calls for a larger capacity cushion?

Define each of the following capacity strategies: expansionist, wait-and-see, and follow-the-leader.

It takes a service rep an average of two minutes to take a customer's information. Over the course of a work week, the rep handles 160 calls a day during her eight hour shift. What is the service rep's capacity cushion?

As the desired capacity cushion increases, the processing hours required for a year's demand decrease.

Output measures are used for estimating capacity requirements when product variety and process divergence are high.

An expansionist capacity strategy:

Which one of the following statements about capacity cushions is best?

A wait-and-see capacity strategy:

Which one of the following statements concerning capacity cushions is best?

________ is the amount of reserve capacity that a firm maintains to handle a sudden increase in demand or temporary losses of production capacity.

What factors should be considered when selecting the appropriate capacity cushion? How does the choice of capacity cushion relate to other decisions in operations management? To other functional areas?

A planning horizon is defined as the set of consecutive time periods considered for planning purposes.