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Unformatted text preview: ch4 Student: ___________________________________________________________________________ 1. Capacity can be defined as the ability to hold, receive, store, or accommodate. True False 2. When evaluating capacity, managers need to consider both resource inputs and product outputs. True False 3. Capacity can be defined as the amount of available resource inputs relative to requirements for output over a particular period of time. True False 4. The capacity utilization rate is found by dividing best operating level by capacity used. True False 5. The objective of strategic capacity planning is to provide an approach for determining the overall capacity level of labor-intensive resources. True False 6. 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. True False 7. 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 False 8. Best operating level is usually a multiple of the level of capacity for which a process was designed. True False 9. Best operating level is the volume of output at which average unit cost is minimized. True False 10. At some point, the size of a growing plant can become too large and diseconomies of scale become a capacity planning problem. True False 11. Long-range capacity planning requires top management participation. True False 12. Overtime and personnel transfers are solutions to capacity problems in the intermediate term. True False 13. Capacity planning is generally viewed in three time durations: Immediate, Intermediate and Indeterminate. True False 14. The basic notion of economies of scale is that as a plant gets larger and volume increases, the average cost per unit of output drops. True False 15. A piece of equipment with twice the capacity of another piece typically costs twice as much to purchase and to operate. True False 16. The problem of keeping demand sufficiently high to keep a large factory busy is a sales issue and not a diseconomy of scale. True False 17. A production facility works best when it focuses on a fairly limited set of production objectives. True False 18. A production facility develops virtuosity and works best when it focused on a widely varied set of production objectives. True False 19. Making adjustments to eliminate the variance between planned and actual output is tied into intermediate range capacity planning....
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This note was uploaded on 01/05/2012 for the course COMMERCE 398 taught by Professor Dale during the Spring '11 term at UBC.
- Spring '11