ISOM 351 EXAM 2 QUESTIONS AND CORRECT
ANSWERS
/.Long-term capacity plans deal with:
a. investments
b. workforce size
c. inventories
d.overtime budgets - Answer-✅a. investments
/.Regarding the measurement of capacity, when a firm provides a relatively small
number of standardized products and services:
a. capacity cannot be determined reliably
b. input measures are typically used
c. output measures are typically used
d. utilization becomes equal to capacity - Answer-✅c. output measures are typically
used
/.The degree to which equipment, space, or labor is being used is commonly referred to
as:
a. capacity
b. output
c.utilization
d. cushion - Answer-✅c.utilization
/.A lumber mill is capable of producing 10,000 board feet of lumber per day, when it
runs ten hours per day with minimal breaks. Over the past year, forestry legislation has
reduced the availability of raw materials, so the mill has produced an average of 4,575
board feet per day. What is the capacity of the plant?
a. 4,575 board feet/day
b. 10,000 board feet/day
c. 45.75%
d. 219% - Answer-✅b. 10,000 board feet/day
/.A lumber mill is capable of producing 10,000 board feet of lumber per day, when it
runs ten hours per day with minimal breaks. Over the past year, forestry legislation has
reduced the availability of raw materials, so the mill has produced an average of 4,575
board feet per day. What is the utilization of the plant?a. 4,575 board feet/day
b. 10,000 board feet/day
c. 219%
, d. 45.75% - Answer-✅d. 45.75%
/.Large, infrequent jumps in capacity are characteristic of companies that:
a. have an expansionist strategy
b. have a wait-and-see strategy
c. have low utilization
d. have high utilization - Answer-✅a. have an expansionist strategy
/.Which one of the following factors usually motivates a smaller capacity cushion?
a. unevenly distributed demands
b. high capital intensity
c. high penalty costs for overtime usage
d. requests for quick customer services - Answer-✅b. high capital intensity
/.Which one of the following factors usually calls for a larger capacity cushion?
a. uncertain demand
b. high capital intensity
c. more reliable equipment
d. higher worker flexibility - Answer-✅a. uncertain demand
/.If a system is well balanced, which one of the following changes usually calls for a
larger capacity cushion?
a. higher capital intensity
b. higher worker flexibility
c. requests for fast delivery times
d. higher inventories - Answer-✅c. requests for fast delivery times
/.An expansionists capacity strategy:
a. lags behind demand
b. reduces the risk of over-expansion based on overly optimistic demand forecasts
c. can preempt expansion by competitors by announcing a large capacity expansion
d. meets capacity shortfalls with overtime, temporary workers, subcontracting, stockouts
- Answer-✅c. can preempt expansion by competitors by announcing a large capacity
expansion
/.A wait-and-see capacity strategy:
a. involves small, frequent jumps in capacity
b. minimizes the chance of lost sales due to insufficient capacity
c. can result in economies of scale and a fast rate of learning, yielding reduced and
manufacturing costs
d. stays ahead of demand - Answer-✅a. involves small, frequent jumps in capacity
/.The time required to change a machine from making one product or service to the next
is called:
a. cycle time
ANSWERS
/.Long-term capacity plans deal with:
a. investments
b. workforce size
c. inventories
d.overtime budgets - Answer-✅a. investments
/.Regarding the measurement of capacity, when a firm provides a relatively small
number of standardized products and services:
a. capacity cannot be determined reliably
b. input measures are typically used
c. output measures are typically used
d. utilization becomes equal to capacity - Answer-✅c. output measures are typically
used
/.The degree to which equipment, space, or labor is being used is commonly referred to
as:
a. capacity
b. output
c.utilization
d. cushion - Answer-✅c.utilization
/.A lumber mill is capable of producing 10,000 board feet of lumber per day, when it
runs ten hours per day with minimal breaks. Over the past year, forestry legislation has
reduced the availability of raw materials, so the mill has produced an average of 4,575
board feet per day. What is the capacity of the plant?
a. 4,575 board feet/day
b. 10,000 board feet/day
c. 45.75%
d. 219% - Answer-✅b. 10,000 board feet/day
/.A lumber mill is capable of producing 10,000 board feet of lumber per day, when it
runs ten hours per day with minimal breaks. Over the past year, forestry legislation has
reduced the availability of raw materials, so the mill has produced an average of 4,575
board feet per day. What is the utilization of the plant?a. 4,575 board feet/day
b. 10,000 board feet/day
c. 219%
, d. 45.75% - Answer-✅d. 45.75%
/.Large, infrequent jumps in capacity are characteristic of companies that:
a. have an expansionist strategy
b. have a wait-and-see strategy
c. have low utilization
d. have high utilization - Answer-✅a. have an expansionist strategy
/.Which one of the following factors usually motivates a smaller capacity cushion?
a. unevenly distributed demands
b. high capital intensity
c. high penalty costs for overtime usage
d. requests for quick customer services - Answer-✅b. high capital intensity
/.Which one of the following factors usually calls for a larger capacity cushion?
a. uncertain demand
b. high capital intensity
c. more reliable equipment
d. higher worker flexibility - Answer-✅a. uncertain demand
/.If a system is well balanced, which one of the following changes usually calls for a
larger capacity cushion?
a. higher capital intensity
b. higher worker flexibility
c. requests for fast delivery times
d. higher inventories - Answer-✅c. requests for fast delivery times
/.An expansionists capacity strategy:
a. lags behind demand
b. reduces the risk of over-expansion based on overly optimistic demand forecasts
c. can preempt expansion by competitors by announcing a large capacity expansion
d. meets capacity shortfalls with overtime, temporary workers, subcontracting, stockouts
- Answer-✅c. can preempt expansion by competitors by announcing a large capacity
expansion
/.A wait-and-see capacity strategy:
a. involves small, frequent jumps in capacity
b. minimizes the chance of lost sales due to insufficient capacity
c. can result in economies of scale and a fast rate of learning, yielding reduced and
manufacturing costs
d. stays ahead of demand - Answer-✅a. involves small, frequent jumps in capacity
/.The time required to change a machine from making one product or service to the next
is called:
a. cycle time
