OSCM 306 Ch. 5 Quiz

Which of the following is not a basic question in capacity planning?

• How much is needed?
• When it is needed?
• Who will pay for it?
• What kind is needed?

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

• Improve
• Identify
• Modify
• Elevate

Efficiency is defined as the ratio of:

• Design capacity to effective capacity. 
• Effective capacity to actual output. 
• Design capacity to actual output. 
• Actual output to effective capacity.

Short term considerations in determining capacity requirements include:

• Demand trend
• Seasonal demand variations
• Cyclical demand variations
• New product development plans

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

• Payback
• Internal Rate of Return
• Net Present Value
• Cost-volume

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

• Timing bubble
• Margin protect
• Capacity cushion 
• Line balance

When buying component parts, risk does not include:

• Interest rate fluctuations
• Product liability
• Vendor viability
• Loss of Control

Which of the following is not a strategy to manage service capacity?

• Hiring extra workers
• Pricing and Promotion
• Subcontracting
• Backordering

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

• Higher
• Lower
• The same
• Either higher or lower

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

• 1,250
• 2,250
• 5,000
• 3,000