2026 QUESTIONS WITH ANSWERS
GRADED A+
◉Regional facility strategy. Answer: Requires that each production
facility has a defined marketing area and each facility produces a
complete line of products for that area. This is often done when
customer convenience and access are important, or when outbound
transportation costs are very high.
◉Product facility strategy. Answer: Means that one facility is
responsible for producing one product or product line and shipping
that product throughout the country and the world. This approach is
appropriate when the production process is complex and hard to
control, such as making ceramic heat shields for spacecraft.
◉Total Cost Formula. Answer: TC = VC(x) + FC
o VC = variable cost
o x = number of units
o FC = fixed costs.
, Total Cost = variable cost * number of units plus fixed costs.
◉Variable costs. Answer: Are those which change and can be
adjusted as business conditions change
◉Assembly Line. Answer: Process selection most appropriate to
produce high volume with little to no variation.
Uses product facility layout (i.e. car manufacture)
◉Continuous Flow. Answer: Process selection most appropriate to
produce high volume with no variation.
Uses product facility layout (i.e. oil refinery). Also called continuous
inventory flow
◉Batch Flow. Answer: Process selection most appropriate to
produce high volume with some variation.
Uses product facility layout: requires equipment or tool changes
◉Job Shop. Answer: Process selection most appropriate to produce
low volume with little to high variation.