Font size
WorksheetsOperations Calculations
Total questions: 55
Worksheet time: 31mins
Operation at peak capacity involves:
Sustained low utilisation rates
Marginal methods of production
Maximum output under normal conditions
None of the above
A possible disadvantage of operating at very high levels of capacity utilisation is:
Labour productivity is low
Less able to respond to sudden increases in demand
Break-even output will be higher
Cannot invest in new technology
A business policy of permanently reducing production capacity is known as:
Outsourcing
Rationalisation
Redundancies
Depreciation
A definition of capacity is
Total fixed costs of production
The total production made in a given period
The maximum output that can be achieved in a given period
The minimum output required to breakeven
What is the capacity utilisation rate for a factory that can produce 20,000 units per month with an actual output of 18,000 units per month
90%
80%
111%
20%
a factory that can make 6000 units per week but actually produces 4500 units has a capacity utilisation of
25%
75%
40%
60%
If a business is working at 60% capacity utilisation and is producing 9,000 units, what is its capacity
6,333 units
20,000 units
15,000 units
9,000 units
A disadvantage of a business having significant spare capacity is that:
Higher return on investment in fixed assets
Employees may become de-motivated and bored
Business can respond to sudden increases in demand
Fixed costs are a low percentage of total costs
Which of these could be a useful measure of production efficiency?
Overheads per employee
Output per machine or employee
Total direct production costs
Sales returns per week
When is the capacity utilisation rate for a business likely to fall?
During a prolonged industrial dispute
When there is a sudden increase in demand
During peak trading sessions in the year
When employees are asked to work overtime
Which of the following might result in increased spare capacity?
A major competitor goes bust
Successful response to a marketing campaign
Closure of a surplus production facility
A major product reaches end of product life cycle
What is under-utilisation
When you don't buy enough raw materials
When you don't buy enough capital goods
When there are not enough workers to employ
When resources are not being used efficiently
What is over-utilisation
When you buy too many raw materials
When you buy too many capital goods
When there are too many workers to employ
When resources are being stretched uncomfortably
How do train companies improve capacity utilisation
Serve food onboard
Charge more during peak times and less during off peak
Run more regular services
Buy more trains
What is the formula for capacity utilisation
Output per worker/Total output
(Maximum possible output/Current Output) *100
(Current output/Maximum possible output) *100
Total output/Output per worker
If a Dubai to Abudhabi bus with 52 students seats had only 30 passengers it would be operating at
Full capacity
Less than full capacity
More than full capacity
Reducing the number of resources particularly labour and capital to reduce excess capacity is called
Mothballing
Upscaling
Rationalising
What is meant by capacity utilisation
It is the relationship between output that is going to be produced in the future with the installed equipment.
It is the output that which could be produced with machines if capacity was fully used.
It is the relationship between output that is produced with the installed equipment, and the potential output which could be produced with it, if capacity was fully used.
Operating at below capacity does have some benefits.
A business would be able to cope more easily with sudden increases in demand.
A business is not able to meet immediate customer needs
A business would not be able to cope more easily with sudden increases in demand.
Define Capacity Utilisation
Capacity utilisation is the extent to which the maximum capacity for output that is being used
Capacity utilisation is the minimum capacity for the output that is being used
it is when you use something.
None of the above
In high capacity utilisation the ___________ cost are spread.
low
high
fixed
none
In low capacity utilisation the ______________costs can be too high to stay in business
Fixed
High
Low
Medium
What is one implication of under-utilisation
Can damage reputation of the business
Means there is no time to maintain machinery or train staff
In manufacturing it can put too much strain on resources
Higher fixed costs per unit
What is one Implications of over-utilisation
Impact on brand image
higher fixed costs per unit
Staff may do too much overtime and so have accidents when tired
Business may need to rationalise
is true?
being equal, average fixed costs will:
to benefit from which one of the following strategies?
Producing a desired result without wasting time, energy, money, or other resources.
Efficiency
Productivity
Input
Output
A way of doing something.
Efficiency
Input
Process
Output
The amount of something that is produced
Input
Efficiency
Productivity
Resources being used to make the output
Input
Productivity
Output
Process
Resources being produced, and it is the final product.
Input
Ouput
Process
If productivity increases, commodity (a good) can be produced faster.
True
False
Productivity is measured in _________ or ________
time or resources
hours worked or number of workers
cm or inches
buying in bulk or revenue
Motivating employees is way to increase productivity.
True
False
_______ is a way to increase productivity.
Talking bad about an employee
Technology
Increase the price of a product
Demand change when price decreases.
Elastic
Inelastic
L1. Labour productivity = Output (over a given period of time) ÷ number of -----------------------.
(a)
L2. Calculate the labour productivity.
Ali owns a sweet factory in Dubai. In March, the output was 9,000 and there were 4 workers.
12.000
2.250
1000
500
*L3. How many worker were there?
In June, the output was 10,000 and the labour productivity was 1.600.
4 workers
5 workers
6 workers
7 workers
Which of the following is NOT true with production process
firms adding value to a product
transforming raw materials into finished goods
provision of a product or service
providing only a product, not service
Which of these is a service?
jogging shoes
plumbing
readymade dress
birthday cake
What does productivity mean?
productivity is how products are made
productivity is a measure of how many workers a business has
productivity measures efficiency
productivity measures effectiveness
Which of these isn't a method of improving productivity?
employing more staff
providing pay incentives
investing in up-to-date machinery
training staff
One of the benefits of increasing productivity is:
more workers will be employed
total production will increase with the same number of workers
average costs will stay the same
fewer raw materials will be needed to produce the same level of output
Labour productivity could be increased by all of the following except:
using more technologically advanced machines
increasing the amount of automation
improved training of workers
employing more workers to produce the same level of output
Which of the following is the best definition of 'an increase in efficiency'?
higher output levels than last year
lower total costs of production
fewer workers employed but output level remains the same
10% more workers employed and output also rises by 10%
You spend $40 on 5 kilos of concrete. What is the unit price for 1 kilo?
$8
$35
$5
$0.125
The store was selling 4 chocolate bars for $2.00. How much would one chocolate bar cost?
$1.00 per bar
$2.00 per bar
$0.50 per bar
$0.25 per bar
What is an advantage of setting an operational objective?
Setting an operational objective ensures that the business makes a profit
Setting an objective means the business can achieve it's mission statement
Setting an objective means the business will produce more
Operational decisions become more focused, as the decisions are made based on achieving these objectives
Select 3 objectives that should be used to review and assess the performance of the production department:
Efficiency
Employee Satisfaction
Costs
Quality
Profitability
Select 2 external factors that can influence operational objectives:
Nature of the product
Availability of resources (i.e. staff and stock)
Competitor performance
Changing customer needs
Other internal departments
Which type of objective is not suitable for the operations/production department:
Innovation
Flexibility
Dependability
Sales Revenue
Environment
