4. Operational Management

In the diagram below the change in the level of inventory between points A and B indicates that there was:

• An increase in the quantity demanded by customers

• An increase in the lead time

• An increase in the re-order quantity

• An increase in the maximum level of inventory

Actual output for a factory in April 2017 was 35,500 units and its maximum possible output was 46,500. What was its capacity utilisation?

• 73.09%

• 76.34%

• 82.13%

• 83.25%

A business experiencing a lower level of capacity utilisation than usual may benefit because it...

• reduces the average costs of production.

• provides more time for maintenance and repair of machinery.

• can increase employee morale, because employees feel more secure in their jobs.

• represents a more efficient use of capital equipment.

A factory produces 120 units with a workforce of 10 employees. The number of employees stays the same but output increases by 20% and costs of production increase by 25%. This means that:

• labour productivity rises and unit costs rise

• labour productivity rises and unit costs fall

• labour productivity falls and unit costs rise

• labour productivity falls and unit costs fall

The figure shows an inventory control chart for boxes of apples held by a supermarket. The lead time for the delivery of inventory is one day. What is the re-order level?

• 70 units

• 60 units

• 30 units

• 10 units

An airline's average capacity utilisation on its London to Madrid route is 74%. The planes used for this route carry an average of 296 passengers per flight. What is the capacity of the planes used on this route?

• 219 passengers

• 322 passengers

• 370 passengers

• 400 passengers

What is the re-order level in inventory control?

• The time at which new inventory is ordered

• The amount of new inventory that is ordered

• The amount of inventory that leads to a new order being placed

• The time at which inventory levels reach zero

Quality assurance is defined as:

• the maintenance of quality at every stage of the process

• the extent to which a business meets its customers requirements

• the maintenance of quality through regular inspection

• employees meeting regularly to discuss how to improve quality

Which method of matching supply to demand gives firms least control over the quality of their output?

• Use of part-time staff

• Producing to order

• Use of temporary staff

• Outsourcing

Lean production is a management approach focused on...

• Improving motivation

• Cutting waste

• Adding value

• Increasing complexity