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Exam 5: Strategic Capacity Planning for Products and Services

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Question 51

Multiple Choice

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How many HIV blood analyses would he have to perform in order to break even?

A) 12,000
B) 2,400
C) 3,000
D) 1,000
E) 5,000

F) C) and D)
G) B) and E)

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Question 52

Multiple Choice

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Which of these factors wouldn't be subtracted from design capacity when calculating effective capacity?

A) personal time
B) maintenance
C) scrap
D) operating hours per day
E) all of the above would be subtracted in the calculation

F) A) and B)
G) A) and C)

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Question 53

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A firm is considering three capacity alternatives: A, B, andC.Alternative A would have an annual fixed cost of $100,000 and variable costs of $22 per unit.Alternative B would have annual fixed costs of $120,000 and variable costs of $20 per unit.Alternative C would have fixed costs of $80,000 and variable costs of $30 per unit.Revenue is expected to be $50 per unit. (A) Which alternative has the lowest break-even quantity? (B) Which alternative will produce the highest profits for an annual output of 10,000 units? (C) Which alternative would require the lowest volume of output to generate an annual profit of $50,000?

What profit (loss) would there be for a quantity of 10,000?

Which of the following is not a strategy to manage service capacity?

Production units have an optimal rate of output where:

Given the following information, what would efficiency be? Effective capacity = 80 units per day Design capacity = 100 units per day Utilization = 48%

Given the following information, what would efficiency be? Effective capacity = 50 units per day Design capacity = 100 units per day Actual output = 30 units per day

Capacity planning decisions have both long-term and short-term considerations.Which of the following statements are true? (I) Long-term considerations relate to the overall level of capacity. (II) Short-term considerations relate to the probable variations in capacity requirements. (III) Short-term considerations determine the "effective capacity."

The method of financial analysis which results in an equivalent interest rate is:

Unbalanced systems are evidenced by ....

What are total revenues for the break-even quantity?

How many prisoners would they have to process annually to make a profit of $100,000 at this new location?

The current trend toward global operations has made capacity decisions much easier since we have the whole world in which to consider operations.

What would be the county's annual profit if they were to process 4,000 prisoners per year at this new location?

How many cords of wood would he have to split with this machine to make a profit of $30,000?

What would the potential profit be if he were to split 4,000 cords of wood with this machine?

The break-even quantity can be determined by dividing the fixed costs by the difference between the revenue per unit and the variable cost per unit.

The method of financial analysis which focuses on the length of time it takes to recover the initial cost of an investment is:

When buying component parts, risk does not include: