Quiz no. 4 - BSTM 3-2

Capacity refers to the upper limit or ceiling on the load that an operating unit cannot handle

• True

• False

The goal of strategic capacity planning is to achieve a match between the long-term supply

capabilities of an organization and the predicted level of long-term demand.

• True

• False

Effective capacity is the the maximum output rate or service capacity an operation, process, or

facility is designed for.

• True

• False

Actual output cannot exceed effective capacity and is often less because of machine breakdowns, absenteeism, shortages of materials and quality problems, as well as factors that are outside the

control of the operations managers.

• True

• False

Capacity Efficiency is computed by dividing Actual Output to Design Capacity then dividing it by a 100 percent.

• True

• 
  False

Strategies are typically

based on real-time data about long-term demand patterns, technological

change, and competitor behaviour.

• True

• False

The link between marketing and operations is crucial to realistic determination of capacity

requirements.

• True

• False

Once capacity requirements have been determined, the organization must decide whether to

produce a good or provide a service itself (In-house), or to outsource it from another organization.

• True

• False

In-housing

involves hiring outside assistance, often through another business, to

perform activities instead of using internal assets or employees.

• True

• False

Bottleneck Operations is an operation in a sequence of operations whose capacity is lower than that of the other operations.

• True

• False