# Question 6 which of the following would tend to

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• Question 6Which of the following would tend to reduce effective capacity?Selectedgreater variety in the product linesuppliers that provide more reliable delivery performanceimproved production qualityemployees that are fully trainedgreater variety in the product linereduced changeover timesAll things being equal, product line variety reduces effective capacity.
• Question 7The owner of a greenhouse and nursery is considering whether to spend \$6,000 toacquire the licensing rights to grow a new variety of rosebush, which she could then sell
for \$6 each. Per-unit variable cost would be \$3. If her available land has design andeffective capacities of 3,000 and 2,000 rosebushes per year, respectively, and she expectsto be 80 percent efficient in her use of this land, how many rosebushes does Rose plan togrow each year on this land?
• Question 8Given the following information, what would efficiency be?Effective capacity = 80 units per dayDesign capacity = 100 units per dayUtilization = 48 percent
20 percentEfficiency = (actual output / effective capacity) × 100% = (48/80) ×100% = 60%• Question 9The owner of Firewood To Go is considering buying a hydraulic wood splitter whichsells for \$50,000. He figures it will cost an additional \$100 per cord to purchase and splitwood with this machine, while he can sell each cord of split wood for \$125. How manycords of wood would he have to split with this machine to break even?
• Question 10Which of the following is a key question in capacity planning?SelectedWhen do we need the capacity?Should we change capacity all at once, or through several small
changes?Where do we need the capacity?When do we need the capacity?Who will pay for the capacity change?Should we make the product in-house or outsource it?What kind, how much, and when is it needed are the three key questionsin capacity planning.
• Question 11The owner of a greenhouse and nursery is considering whether to spend \$6,000 toacquire the licensing rights to grow a new variety of rosebush, which she could then sellfor \$6 each. Per-unit variable cost would be \$3. How many rosebushes would she haveto produce and sell in order to make a profit of \$6,000?
• Question 12
The owner of Firewood To Go is considering buying a hydraulic wood splitter whichsells for \$50,000. He figures it will cost an additional \$100 per cord to purchase and splitwood with this machine, while he can sell each cord of split wood for \$125. If, for thismachine, design capacity is 50 cords per day, effective capacity is 40 cords per day, andactual output is expected to be 32 cords per day, what would be its efficiency?

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