Unit 5: PROCESS DESIGN, CAPACITY PLANNING, AND LOCATION ANALYSIS

Question 1

The Acme Manufacturing Company is operating at a maximum rate of production and meeting the demand of its customer base. Acme is

Answer 1

Operating at capacity

Question 2

layout is characterized by high consumer demand for similar goods that have few variations.

Answer 2

Product oriented

Question 3

True or false? Design capacity is the maximum achievable output of a system under ideal conditions for a short period of time.

Answer 3

True. Design capacity is the maximum achievable output of a process or system. It is based on what a service firm or a manufacturer can produce under ideal conditions for a short period of time.

Question 4

Effective capacity is based upon what a manufacturer can produce in___conditions.

Answer 4

realistic

Question 5

is a measure used to determine how much capacity is actually used on an average basis.

Answer 5

Capacity utilization

Question 6

What is the primary focus of the theory of constraints (TOC)?

Answer 6

Bottlenecks. The theory of constraints (TOC) is a 5-step process that helps a firm achieve optimal throughput by identifying the bottleneck and coordinating the system around the bottleneck’s capacity.

Question 7

True or false? Concord Enterprises has implemented a product facility strategy, which means that each of its manufacturing plants has a specified marketing area and manufactures a complete line of products for that area.

Answer 7

False. Concord has implemented a regional facility strategy not a product facility strategy. A regional facility strategy requires that each production facility has a defined marketing area and each facility produces a complete line of products for that area.

Question 8

Which of the following involves a firm having one manufacturing location to produce one product and shipping the product around the country or world?

Answer 8

Product facility strategy

Question 9

ransportation costs, government incentives, and local wage rates are____ factors that influence manufacturing location decisions.

Answer 9

Quantitative

Question 10

True or false? Although qualitative factors lack measurable, direct effects, they can be included in service location decisions if managers focus on the most relevant factors and give each factor a weight.

Answer 10

True. Qualitative factors do not usually have measurable, direct effects, but they do need to be carefully considered and integrated into the decision by management. To integrate qualitative factors into the location decision, managers should decide which factors are relevant, weigh each of the factors, and evaluate each site so that rational comparisons can be made.

Question 11

True or false? Both continuous flow and assembly line processes use dedicated facilities to produce large volumes of goods with few, if any, product differences.

Answer 11

True. Continuous flow and assembly lines are usually dedicated facilities that produce large volumes with little, if any, difference in the products.

Question 12

For a firm that wants to develop a competitive advantage as a low-cost leader by producing large volumes of similar products, a(n) _____process would be best.

Answer 12

Assembly line

Question 13

True or false? Economy of scale requires flexibility within the organization and suggests building volume to cover fixed costs by producing a variety of products on the same equipment.

Answer 13

False. Economy of scope requires flexibility within the organization to produce a variety of products.

Question 14

When a firm is engaged in capacity planning, which of the following is most important to consider?

Answer 14

Current and future market demand

Question 15

Which of the following would most likely use a product-oriented layout?

Answer 15

Mattress manufacturer

Question 16

Which of the following best defines design capacity?

Answer 16

The maximum achievable output of a process in ideal conditions

Question 17

Effective capacity is best described as maximum capacity given ________.

Answer 17

equipment failures

Question 18

Which of the following is a metric for determining how much capacity is used, on average?

Answer 18

Capacity Utilization

Question 19

By implementing the theory of constraints (TOC), an operations manager is attempting to ________.

Answer 19

achieve optimal throughput

Question 20

Dixon Manufacturing has plants in Texas, Ohio, Georgia, and Minnesota. Each manufacturing facility has a defined marketing area, and each facility produces a complete line of products for that area. Dixon has implemented a ________ strategy.

Answer 20

Regional Facility

Question 21

Carbon Computers has a manufacturing plant in Tennessee that is solely responsible for producing the firm’s line of tablets, which are shipped internationally. The firm has a second manufacturing plant in Kansas that is solely responsible for producing the firm’s line of laptops, which are also shipped around the world. Carbon Computers has implemented a ________.

Answer 21

product facility strategy

Question 22

Managers at Concord Manufacturing are in the process of evaluating locations for the firm’s next manufacturing facility. Which of the following is a qualitative factor that the managers should consider?

Answer 22

Supplier proximity

Question 23

The owners of Freedom Footwear, a retail shoe store chain, are evaluating potential locations for a new store. Although the firm has a website, the majority of its sales take place in its physical outlets. Which of the following is a qualitative factor that would be most important for the firm?

Answer 23

Proximity to customers

Question 24

________ involves determining the most appropriate method of completing a task based on technical issues and scale issues.

Answer 24

Process selection

Question 25

True or false? For a firm that wants to develop a competitive advantage as a low-cost leader, flow-oriented processes are appropriate.

Answer 25

True

Question 26

——- requires flexibility within the organization and suggests building volume to cover fixed costs by producing a variety of products on the same equipment.

Answer 26

Economy of Scope