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WorksheetsMOB - Production, Capacity, Layout
Total questions: 75
Worksheet time: 1hrs 15mins
What is the primary objective of layout strategy?
To minimize costs
To develop an effective and efficient layout
To increase employee turnover
To reduce customer interaction
Which layout type focuses on the production of a single product or group of related products?
Work cell layout
Product-oriented layout
Process-oriented layout
Fixed-position layout
What is a key consideration in good layouts?
Employee satisfaction only
Material handling equipment
Aesthetic appeal only
Cost of employee salaries
In which layout do workers and equipment come to the site of the product?
Work cell layout
Product-oriented layout
Fixed-position layout
Process-oriented layout
Which layout type is characterized by grouping similar machines and equipment together?
Product-oriented layout
Retail layout
Fixed-position layout
Process-oriented layout
Fill in the blank. Economies of scale is when as output _________, unit costs ________ in the long run.
increases; decrease
increases; increase
decreases; increase
decreases; decrease
Internal economies of scale are those that
Result from changes in production techniques
Increase due to the growth of the industry as a whole
Generate lower per unit production costs
Reduce production costs in the short run
Larger firms are better able to diversify into a range of product areas or markets and thus lessen their risk. This is an example of
Financial economies of scale
Technical economies of scale
Managerial economies of scale
Marketing economies of scale
Risk bearing economies of scale
Large firms can afford to advertise and sell in larger quantities to develop brand loyalty. This is an example of
Purchasing economies of scale
Technical economies of scale
Managerial economies of scale
Marketing economies of scale
Risk bearing economies of scale
Large firms can negotiate better interest rates on loans; this reduces the costs of borrowing for larger companies. This is an example of
Financial economies of scale
Technical economies of scale
Managerial economies of scale
Marketing economies of scale
Risk bearing economies of scale
Large firms can buy raw materials in bulk at more favourable rates. This is an example of
Purchasing economies of scale
Technical economies of scale
Managerial economies of scale
Marketing economies of scale
Risk bearing economies of scale
Fill in the blank. __________ economies of scale occur due to an increase in the scale of production within a single firm
Internal
External
Complex
Simple
Larger firms can hire specialists (e.g. managers, accountants) and are therefore able to increase productivity. This is an example of
Purchasing economies of scale
Technical economies of scale
Managerial economies of scale
Marketing economies of scale
Risk bearing economies of scale
Which of the following EOS refers to improving the production process?
Financial
Managerial
Technical
Purchasing
Machinery is likely to be efficient. what economies does it indicate?
Diseconomies of Scale result in a lower per unit production cost over the long run
True
False
External economies of scale can arise from
Bulk purchases of raw materials, parts and components at favorable prices by a particular business/firm
Purchase and use of physical/human capital by a particular business/firm
Greater availability of skilled laborers for a particular industry in a particular area
A business/firm being able to obtain lower interest rates on loans
by the firm
is true?
being equal, average fixed costs will:
Short-term capacity planning deals with which of the following factors?
Overtime budgets
Workforce Size
Inventories
All of the above
Operation at peak capacity involves:
Sustained low utilisation rates
Marginal methods of production
Maximum output under normal conditions
None of the above
Larger capacity cushions, to buffer against uncertainty in demand, may be avoided by:
High levels of skill specialisation in the workforce
High levels of inventory
High levels of production quality
High levels of labour turnover
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 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
A factory that can make 6000 units per week but actually produces 4500 units has a capacity utilisation of
25%
75%
40%
60%
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
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
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 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%
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
Mothballing means that
A business has too many resources
Leaving machines and building unused and unmaintained.
A business reduces its resources
Leaving machines and building unused but maintained.
Making a large quantity of identical products
Job
Batch
Flow
Making individual products that are bespoke (fit each customer's needs)
Job
Batch
Flow
Making different varieties of identical products. The production process is broken into stages
Job
Batch
Flow
Production method used for this
Batch
Job
Flow
Workers will be able to work at a very fast pace
Job
Flow
Workers will get bored using this method of production
Job
Batch
Flow
Productivity (output per worker per hour) will be high, so unit costs will be low.
Job
Batch
Flow
Time is wasted cleaning the machinery between switching to a different flavour/make/ model
Job
Batch
Flow
Workers are highly skilled and command high wages
Job
Batch
Flow
Cost per unit is low so you can sell the product at a low price
Job
Batch
Flow
Set up costs are high due to having to buy the automated production lines
Job
Batch
Flow
Customers have a choice of products but are products are not expensive
Job
Batch
Flow
Batch Production is likely to be used at Hershey's Chocolate Factory.
Which method of production would be used for this?
What should be the basis of grouping machines into a cell when considering using cellular manufacturing?
Cost of parts
Size of parts
Similarity of parts
Location of parts
Which layout type groups machines by the process they perform?
Product Layout
Process Layout
Fixed Position Layout
Cellular Layout
Why is it important to eliminate unnecessary movements in facility layout?
To increase employee engagement
To minimize production time or customer service time
To enhance product quality
To improve workplace aesthetics
What role does capacity planning play in process selection?
It determines employee salaries
It influences the organization of goods or services production
It focuses on marketing strategies
It enhances customer relations
In terms of facility design, what does 'fixed position layout' typically involve?
Flexible arrangements based on worker preferences
Linear setups for mass production
Situations where products cannot be moved during assembly
Grouping similar tasks together
