Essay about Net Present Value and Moderate Keywords

10076 Words Mar 31st, 2012 41 Pages
Chapter
6 |

Capacity Planning | |
TRUE/FALSE

1. Capacity is the maximum rate of output of a process. Answer: True Reference: Introduction

Difficulty: Easy

Keywords: capacity, maximum output rate

2. Capacity decisions should be made separate from strategic decisions. Answer: False Reference: Introduction Difficulty: Moderate Keywords: capacity decision, strategic decisions

3. Capacity can be expressed by output or input measures. Answer: True Reference: Planning Long-Term Capacity Difficulty: Moderate Keywords: capacity, input measures, output measures

4. Input measures of capacity are inherently more accurate than output measures of
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When a firm makes a long-term capacity decision, selecting the base case alternative means doing nothing and losing orders from any demand that exceeds current capacity, or incurring costs due to excess capacity. Answer: True Reference: A Systematic Approach to Long-Term Capacity Decisions Difficulty: Moderate Keywords: base case alternative, capacity decisions, capacity

22. Waiting line models are often used for capacity planning. Answer: True Reference: Tools for Capacity Planning Difficulty: Moderate Keywords: waiting line models, capacity planning

MULTIPLE CHOICE

23. Long-term capacity plans deal with: a. investments in new facilities. b. workforce size. c. inventories. d. overtime budgets. Answer: a Reference: Planning Long-Term Capacity Difficulty: Moderate Keywords: long-term capacity, new facilities

24. Long-term capacity decisions that confront managers include all of the following except: a. capital equipment. b. additional land. c. buildings. d. workforce size. Answer: d Reference: Capacity Planning Over Longer Time Horizons Difficulty: Moderate Keywords: long-term capacity

25. 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.

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