Chapter 4

Question 1

upper management decisions

Answer 1

invest in facilities
buy or rent new capital equipment
invest in new building or buying new land

Question 2

it’s not about deciding

Answer 2

how many employees you will need or *workforce size, it’s much longer time horizons

Question 3

output measures of capacity

Answer 3

this is what we use in our airplane game

Question 4

utilization

Answer 4

*the degree to which you equipment, space, or labor is being use

Question 5

utilization/

Answer 5

average output rate/max capacity/availability *100

Question 6

utilization/

Answer 6

average output rate/max capacity/availability *100

Question 7

output measures when

Answer 7

the firm uses high volume, standardized processes in your airplane production or made to stock production, we use words like products produced, customers served, money made, etc

Question 8

input measures when

Answer 8

the firm uses low-volume, flexible processes machine hours available, employees available, rooms available, etc

Question 9

capacity cushions

Answer 9

the amount of reserve capacity a process uses to handle sudden increases in demand or temporary losses of production capacity

Question 10

sizing capacity cushions (pg 139)

Answer 10

=100%-average utilization rate (%)

Question 11

capacity cushions vary with industry

Answer 11

what increases of decreases the need for it?

uncertainty usually means larger cushions, *greater worker flexibility and *more reliable equipment means lower ones

Question 12

customization and quick delivery

Answer 12

allows a larger utilization