Exam 2 - Chapter 10

Question 1

Short term capacity decision vs Long term Capacity decision

Answer 1

Short term capacity decision: running a second shift

Long term capacity decision: building another facility

Question 2

Setup Time vs Process Time

Answer 2

Setup time: time to setup your equipment (no value adding)

Process time: time you used to build the product (value adding)

Question 3

Complementary Goods and Services

Answer 3

can be produced or delivered using the same resources available to the firm. Ex: Jet ski sell during the spring but you can also sell Snowmobiles during the winter since both are similar products

Question 4

Theory of Constraint

Answer 4

is a set of principles that focuses on increasing total process throughput by maximizing the utilization of all bottleneck work activities and workstations

Anything that limits an organization from moving toward or achieving its goal.

Question 5

Bottleneck

Answer 5

You want to produce in huge quantities. You should focus on your bottleneck first. This needs to be at 100%. You have sufficient amount of work in process.

Question 6

Nonbottleneck

Answer 6

You don’t have to worry about this part of the assembly line.