Chap005 - Chapter 05 - Strategic Capacity Management...

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Chapter 05 - Strategic Capacity Management Chapter 05 Strategic Capacity Management True / False Questions 1. Capacity can be defined as the ability to hold, receive, store or accommodate. TRUE Level: Easy 2. When evaluating capacity, managers need to consider both resource inputs and product outputs. TRUE Level: Easy 3. Capacity can be defined as the amount of available resource inputs relative to requirements for output over a particular period of time. TRUE Level: Easy 4. Firms that make multiple products can produce the same number of each product with a given level of resource inputs and equal amounts of time. FALSE Level: Easy 5. The capacity utilization rate is found by dividing best operating level by capacity used. FALSE Level: Easy 5-1
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Chapter 05 - Strategic Capacity Management 6. Maximum practical capacity is defined by the federal Bureau of Economic Analysis as "That output obtained within the normal operating schedule of shifts per day and days per week excluding the use of high-cost and inefficient facilities". FALSE Level: Medium 7. Maximum practical capacity is defined by the federal Bureau of Economic Analysis as "That output attained within the normal operating schedule of shifts per day and days per week including the use of high-cost inefficient facilities". TRUE Level: Easy 8. The objective of strategic capacity planning is to determine the overall capacity level of capital intensive resources (including facilities, equipment and overall labor force size) that best supports the company's short-range competitive strategy. FALSE Level: Easy 9. The objective of strategic capacity planning is to determine the overall capacity level of capital intensive resources (including facilities, equipment and overall labor force size) that best supports the company's long-range competitive strategy. TRUE Level: Easy 10. At some point, the size of a growing plant can become too large and diseconomies of scale become a capacity planning problem. TRUE Level: Easy 5-2
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11. The experience curve is states that the more experience you have in a particular activity, the less surprised you will be when something goes wrong. FALSE Level: Easy 12. When plotted on a graph, the experience curve can't be expressed as logarithm. FALSE Level: Easy 13. Economies of scale and the experience curve have opposite effects on capacity. FALSE Level: Easy 14. The point at which the scale economy curve and the experience curve intersect is called the capacity optimum. FALSE Level: Easy 15. The ultimate in plant flexibility is a one-hour-changeover time plant. FALSE Level: Easy 16. The PWP concept permits finding the best operating level for each department of the organization and thereby carries the focus concept down to the operating level. TRUE
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This note was uploaded on 07/17/2011 for the course MBA 587 taught by Professor None during the Spring '11 term at Missouri (Mizzou).

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Chap005 - Chapter 05 - Strategic Capacity Management...

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