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Exam 10: Capacity Management

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Question 1

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A firm will encounter short periods of over- and under-utilization with which of the following capacity expansion approaches?

A) One large capacity increase
B) Small capacity increases that match demand
C) Small capacity increases that lead demand
D) Small capacity increases that lag demand

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Question 2

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An example of safety capacity would be planning additional capacity to account for employee summer vacations.

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Question 3

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The Theory of Constraints is focused on eliminating all bottlenecks in a process.

Safety capacity or a capacity cushion is

Chapter 10 describes how a clogged court system tried to solve the bottleneck problem regarding the processing of tens of thousands of foreclosures by

Define Economies of Scale and Diseconomies of Scale. Explain how they relate to capacity decisions.

It is never appropriate to expand capacity in advance of growing demand because the excess capacity will always be underutilized.

Which of the following is not correct relating to bottleneck resources?

A pharmacy lab is used for only two high volume prescriptions, A and B. The time per setup (in minutes), processing time (in seconds), order size (in units) is given below. Using the information, determine the total capacity required for this lab in minutes.

A measure of capacity is the number of seats on an airplane per flight.

In calculating required capacity for a job shop, setup time is a significant factor.

A formal definition of capacity is the average rate of output per unit of time.

Changing labor skill mix is a means to adjust short-term capacity.

Capacity costs depend primarily on annual operating and maintenance costs.

The earliest revenue management systems focused solely on overbooking.

All the following are means to adjust short-term capacity except

Complementary goods and services are those that require different resources than the organization's other goods and services.

For a non-bottleneck activity,

C&M Machining is developing plans for a dedicated production line and needs to determine how many drill presses will be needed. Engineering estimates are that one drill press will be able to process 120 parts per hour. Daily demand is 2,400 parts. C&M operates one 8-hour shift per day. How many drill presses are needed to meet the capacity requirements?

Explain the concept of a focused factory. Include different ways a factory can be focused.