OPMA Exam 2 UPDATED ACTUAL
QUESTIONS AND CORRECT ANSWERS
In operations management, capacity must be stated relative to: - CORRECT
ANSWER a period of time.
Planning for the next week is referred to as: - CORRECT ANSWER short range
capacity management.
Strategic capacity planning involves: - CORRECT ANSWER long-term production.
impacting the firm's cost structure.
capital-intensive acquisitions.
Capacity - CORRECT ANSWER is the output that a system is capable of achieving
over a period of time.
Capacity has a time dimensional aspect for operations and supply chain management. A
manager must consider capacity planning in how many time durations? - CORRECT
ANSWER Three time durations.
Capacity planning must be considered in the short-, intermediate-, and long-range.
The idea that as a plant volume increases, the average cost per unit drops is known as -
CORRECT ANSWER economies of scale.
The ability to hold, receive, store, or accommodate describes - CORRECT
ANSWER capacity.
The output level where average unit cost is minimized is known as the - CORRECT
ANSWER best operating level.
,True or false: When plant production becomes too small, diseconomies of scale may occur. -
CORRECT ANSWER False.
Reason:
Diseconomies of scale can occur for numerous reasons, but is the outcome of the
complications from managing a more extensive operation.
Which of the following contribute to the development of economies of scale?
> Higher capacity equipment typically has lower per unit costs.
> Higher production volumes can often be achieved without additional support personnel.
> Keeping high capacity equipment busy may require price discounting.
> Higher capacity equipment often requires more maintenance support. - CORRECT
ANSWER > Higher capacity equipment typically has lower per unit costs.
> Higher production volumes can often be achieved without additional support personnel.
What can be used to operationalize the focused factory concept? - CORRECT
ANSWER Plant within a plant
Reason:
A plant within a plant (PWP) can be used to find the best operating level in each department
of a focused factory.
The ability to rapidly increase or decrease production levels, or shift from one product or
service to another is known as - CORRECT ANSWER capacity flexibility.
True or false: When the size of a plant becomes too large, diseconomies of scale become a
problem. - CORRECT ANSWER False.
Reason:
, Plants that become too large are susceptible to diseconomies of scale and could lead to an
increase in cost per unit.
True or false: When changing capacity, a firm should ensure the output of one stage provides
the exact input for the next stage. - CORRECT ANSWER False.
Reason:
Perfectly matching one stage's output to the next stage's input is impossible and not desirable
due to the best operating level of each stage.
The idea that multiple products can be combined and produced at one facility at a lower cost
than they can be produced separately is known as: - CORRECT ANSWER economies
of scope.
A facility designed around a limited set of production objectives is called a: - CORRECT
ANSWER focused factory.
Capacity flexibility is achieved by using: - CORRECT ANSWER flexible plants.
flexible processes.
flexible workers.
True or false: Economies of scope can be achieved when a company focuses on a single
product. - CORRECT ANSWER False.
Reason:
Economies of scope are when products can be produced at a lower cost in combination than
they can be separately.
The two types of costs to consider when adding capacity are: - CORRECT ANSWER >
The cost of upgrading too frequently.
> The cost of downgrading too infrequently.
QUESTIONS AND CORRECT ANSWERS
In operations management, capacity must be stated relative to: - CORRECT
ANSWER a period of time.
Planning for the next week is referred to as: - CORRECT ANSWER short range
capacity management.
Strategic capacity planning involves: - CORRECT ANSWER long-term production.
impacting the firm's cost structure.
capital-intensive acquisitions.
Capacity - CORRECT ANSWER is the output that a system is capable of achieving
over a period of time.
Capacity has a time dimensional aspect for operations and supply chain management. A
manager must consider capacity planning in how many time durations? - CORRECT
ANSWER Three time durations.
Capacity planning must be considered in the short-, intermediate-, and long-range.
The idea that as a plant volume increases, the average cost per unit drops is known as -
CORRECT ANSWER economies of scale.
The ability to hold, receive, store, or accommodate describes - CORRECT
ANSWER capacity.
The output level where average unit cost is minimized is known as the - CORRECT
ANSWER best operating level.
,True or false: When plant production becomes too small, diseconomies of scale may occur. -
CORRECT ANSWER False.
Reason:
Diseconomies of scale can occur for numerous reasons, but is the outcome of the
complications from managing a more extensive operation.
Which of the following contribute to the development of economies of scale?
> Higher capacity equipment typically has lower per unit costs.
> Higher production volumes can often be achieved without additional support personnel.
> Keeping high capacity equipment busy may require price discounting.
> Higher capacity equipment often requires more maintenance support. - CORRECT
ANSWER > Higher capacity equipment typically has lower per unit costs.
> Higher production volumes can often be achieved without additional support personnel.
What can be used to operationalize the focused factory concept? - CORRECT
ANSWER Plant within a plant
Reason:
A plant within a plant (PWP) can be used to find the best operating level in each department
of a focused factory.
The ability to rapidly increase or decrease production levels, or shift from one product or
service to another is known as - CORRECT ANSWER capacity flexibility.
True or false: When the size of a plant becomes too large, diseconomies of scale become a
problem. - CORRECT ANSWER False.
Reason:
, Plants that become too large are susceptible to diseconomies of scale and could lead to an
increase in cost per unit.
True or false: When changing capacity, a firm should ensure the output of one stage provides
the exact input for the next stage. - CORRECT ANSWER False.
Reason:
Perfectly matching one stage's output to the next stage's input is impossible and not desirable
due to the best operating level of each stage.
The idea that multiple products can be combined and produced at one facility at a lower cost
than they can be produced separately is known as: - CORRECT ANSWER economies
of scope.
A facility designed around a limited set of production objectives is called a: - CORRECT
ANSWER focused factory.
Capacity flexibility is achieved by using: - CORRECT ANSWER flexible plants.
flexible processes.
flexible workers.
True or false: Economies of scope can be achieved when a company focuses on a single
product. - CORRECT ANSWER False.
Reason:
Economies of scope are when products can be produced at a lower cost in combination than
they can be separately.
The two types of costs to consider when adding capacity are: - CORRECT ANSWER >
The cost of upgrading too frequently.
> The cost of downgrading too infrequently.
