Strategic Capacity Planning Quiz

What is the upper limit on the load that an operating unit can handle called?

• Efficiency

• Output

• Utilization

• Capacity

What is the goal of capacity planning?

• To increase production speed

• To minimize costs

• To reduce employee workload

• To match supply capabilities with demand

What does overcapacity lead to?

• Lower employee turnover

• Increased customer satisfaction

• High operating costs

• Strained resources

Which of the following is NOT a key question in capacity planning?

• What kind of capacity is needed?

• How much will it cost?

• What is the current market trend?

• When is it needed?

What is design capacity?

• The actual output achieved

• The output rate after maintenance

• The average output rate

• The maximum output rate an operation is designed for

What is effective capacity?

• Design capacity plus allowances

• Design capacity minus allowances

• Actual output achieved

• Maximum output rate

What does a capacity cushion represent?

• Extra capacity to meet demand uncertainty

• The total capacity of a facility

• The minimum required capacity

• The average output rate

Which strategy involves building capacity in anticipation of future demand increases?

• Following

• Tracking

• Leading

• Reactive

What is a bottleneck operation?

• An operation that is always efficient

• An operation with the highest output rate

• An operation that limits the overall capacity

• An operation that has no constraints

What is the break-even point (BEP)?

• The point where total costs exceed total revenue

• The volume of output where total cost equals total revenue

• The maximum output rate of a facility

• The point of maximum profit