MGT 227 EXAM 3A PRACTICE EXAM QUESTIONS AND
ANSWERS
1. Which of the following statements is incorrect?
a. Firms make capacity planning decisions that are long range, medium range, and
short range.
b. Capacity decisions are based on forecasted estimate of past demand.
c. Facilities, aggregate planning, and scheduling form a hierarchy of capacity decisions
about the planning of operations.
d. Capacity is the maximum output that can be produced over a specific period of time.
e. Estimating capacity depends on reasonable assumptions about facilities, equipment,
and workforce availability. - Answers - a. Capacity decisions are based on forecasted
estimate of past (future) demand.
1. Which of the following statements is incorrect?
a. Efficient Capacity is obtained by subtracting downtime for maintenance, shift breaks,
schedule changes, absenteeism, and other activities that decrease the capacity
available.
b. Facility planning has a long-range component that determines whether more capacity
is needed or less.
c. At the aggregate planning level, expected workforce levels and corresponding
production output levels are determined based on existing capacity.
d. Scheduling consists of short-term decisions that allocates available capacity by
assigning it to specific activities.
e. Scheduling decisions often indicate a need for revised aggregate planning, and
aggregate planning may uncover facility needs. - Answers - a. Efficient (effective)
Capacity is obtained by subtracting downtime for maintenance, shift breaks, schedule
changes, absenteeism, and other activities that decrease the capacity available.
1. Which of the following items was not listed as a type of capacity measure?
a. Number of units produced
b. Tons produced
c. Number of customers served over a specified period
d. Physical asset availability
e. Ounces per pound - Answers - a. Ounces per pound
1. Regarding utilization, which of the following statements is incorrect?
a. It is the relationship between actual output and capacity.
b. Utilization = (actual output/capacity) x 100%
c. It is a useful measure for estimating how busy a facility is.
d. In the long term, it is possible to operate above 100% utilization using such
approaches as overtime or speeding up the line. - Answers - a. In the long (short) term,
, it is possible to operate above 100% utilization using such approaches as overtime or
speeding up the line.
1. Which of the following statements is incorrect?
a. Continuous flow processes may have utilization near 100%.
b. Assembly-line processes may set planned utilization at 80% to allow for flexibility to
meet unexpected demand.
c. Batch and job shop processes generally have even higher utilization than continuous
and assembly-line processes.
d. In considering economies of scale, larger facilities are generally more economical
because fixed costs can be spread over more units of production.
e. In considering economies of scale, larger facilities are generally more economical
because the cost of buildings and equipment does not increase linearly with volume. -
Answers - a. Batch and job shop processes generally have even higher (lower)
utilization than continuous and assembly-line processes.
1. Which of the following items was not listed as a long-range facilities consideration?
a. The amount of past capacity
b. The size of facilities
c. Facilities locations
d. Types of facilities needed - Answers - a. The amount of past (current) capacity
1. Which of the following items was not listed as a factor affecting facilities strategies?
a. Predicted supply
b. Cost of facilities
c. Likely behavior of competitors
d. Alignment to business strategy
e. International considerations - Answers - a. Predicted supply (demand)
1. Which of the following statements is incorrect?
a. One large facility incurs more transportation costs to deliver goods than do two
smaller facilities.
b. Coordination costs increase in smaller facilities.
c. When considering the timing of capacity additions, a firm may choose to preempt the
competition or wait until demand develops and the need for more capacity is clear.
d. Aggregate planning is the activity of matching supply of output with demand over the
medium range (6 months to 2 years).
e. The term aggregate refers to planning for a limited number of product families at the
macro level. - Answers - a. Coordination costs increase in smaller (larger) facilities.
1. Which of the following statements is incorrect?
a. A technology-focused facility produces one family or type of product or service.
b. A market-focused facility is located in the markets they serve.
c. A process-focused facility utilizes only one or two technology-driven processes.
ANSWERS
1. Which of the following statements is incorrect?
a. Firms make capacity planning decisions that are long range, medium range, and
short range.
b. Capacity decisions are based on forecasted estimate of past demand.
c. Facilities, aggregate planning, and scheduling form a hierarchy of capacity decisions
about the planning of operations.
d. Capacity is the maximum output that can be produced over a specific period of time.
e. Estimating capacity depends on reasonable assumptions about facilities, equipment,
and workforce availability. - Answers - a. Capacity decisions are based on forecasted
estimate of past (future) demand.
1. Which of the following statements is incorrect?
a. Efficient Capacity is obtained by subtracting downtime for maintenance, shift breaks,
schedule changes, absenteeism, and other activities that decrease the capacity
available.
b. Facility planning has a long-range component that determines whether more capacity
is needed or less.
c. At the aggregate planning level, expected workforce levels and corresponding
production output levels are determined based on existing capacity.
d. Scheduling consists of short-term decisions that allocates available capacity by
assigning it to specific activities.
e. Scheduling decisions often indicate a need for revised aggregate planning, and
aggregate planning may uncover facility needs. - Answers - a. Efficient (effective)
Capacity is obtained by subtracting downtime for maintenance, shift breaks, schedule
changes, absenteeism, and other activities that decrease the capacity available.
1. Which of the following items was not listed as a type of capacity measure?
a. Number of units produced
b. Tons produced
c. Number of customers served over a specified period
d. Physical asset availability
e. Ounces per pound - Answers - a. Ounces per pound
1. Regarding utilization, which of the following statements is incorrect?
a. It is the relationship between actual output and capacity.
b. Utilization = (actual output/capacity) x 100%
c. It is a useful measure for estimating how busy a facility is.
d. In the long term, it is possible to operate above 100% utilization using such
approaches as overtime or speeding up the line. - Answers - a. In the long (short) term,
, it is possible to operate above 100% utilization using such approaches as overtime or
speeding up the line.
1. Which of the following statements is incorrect?
a. Continuous flow processes may have utilization near 100%.
b. Assembly-line processes may set planned utilization at 80% to allow for flexibility to
meet unexpected demand.
c. Batch and job shop processes generally have even higher utilization than continuous
and assembly-line processes.
d. In considering economies of scale, larger facilities are generally more economical
because fixed costs can be spread over more units of production.
e. In considering economies of scale, larger facilities are generally more economical
because the cost of buildings and equipment does not increase linearly with volume. -
Answers - a. Batch and job shop processes generally have even higher (lower)
utilization than continuous and assembly-line processes.
1. Which of the following items was not listed as a long-range facilities consideration?
a. The amount of past capacity
b. The size of facilities
c. Facilities locations
d. Types of facilities needed - Answers - a. The amount of past (current) capacity
1. Which of the following items was not listed as a factor affecting facilities strategies?
a. Predicted supply
b. Cost of facilities
c. Likely behavior of competitors
d. Alignment to business strategy
e. International considerations - Answers - a. Predicted supply (demand)
1. Which of the following statements is incorrect?
a. One large facility incurs more transportation costs to deliver goods than do two
smaller facilities.
b. Coordination costs increase in smaller facilities.
c. When considering the timing of capacity additions, a firm may choose to preempt the
competition or wait until demand develops and the need for more capacity is clear.
d. Aggregate planning is the activity of matching supply of output with demand over the
medium range (6 months to 2 years).
e. The term aggregate refers to planning for a limited number of product families at the
macro level. - Answers - a. Coordination costs increase in smaller (larger) facilities.
1. Which of the following statements is incorrect?
a. A technology-focused facility produces one family or type of product or service.
b. A market-focused facility is located in the markets they serve.
c. A process-focused facility utilizes only one or two technology-driven processes.
