OSCM 306 Ch. 5 Flashcard

Front

Which of the following is not a basic question in capacity planning? Options: How much is needed?, When it is needed?, Who will pay for it?, What kind is needed?

Back

Who will pay for it?

Front

The first, and perhaps most important, step in constraint management is to _________ the most pressing constraint.

Back

Identify

Front

Efficiency is defined as the ratio of: Actual output to effective capacity.

Back

Actual output to effective capacity.

Front

Short term considerations in determining capacity requirements include: Demand trend, Seasonal demand variations, Cyclical demand variations, New product development plans

Back

Seasonal demand variations

Front

The method of financial analysis which results in an equivalent interest rate is:

Back

Internal Rate of Return

Front

Capacity in excess of expected demand that is intended to offset uncertainty is a:

Back

Capacity cushion

Front

When buying component parts, risk does not include: Interest rate fluctuations, Product liability, Vendor viability, Loss of Control

Back

Interest rate fluctuations

Front

Which of the following is not a strategy to manage service capacity? Hiring extra workers, Pricing and Promotion, Subcontracting, Backordering

Back

Backordering

Front

When the output is less than the optimal rate of output, the average unit cost will be:

Back

Higher

Front

For fixed costs of $2,000, revenue per unit of $2, and variable cost per unit of $1.60, what is the break-even quantity?

Back

The break-even quantity is calculated by the formula: \( Q = \frac{FC}{P - VC} \), where \( FC \) is fixed costs, \( P \) is price per unit, and \( VC \) is variable cost per unit. Plugging in the values: \( Q = \frac{2000}{2 - 1.60} = 5000 \).