Unit 5: PROCESS DESIGN, CAPACITY PLANNING, AND LOCATION ANALYSIS Flashcards
The Acme Manufacturing Company is operating at a maximum rate of production and meeting the demand of its customer base. Acme is
Operating at capacity
layout is characterized by high consumer demand for similar goods that have few variations.
Product oriented
True or false? Design capacity is the maximum achievable output of a system under ideal conditions for a short period of time.
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.
Effective capacity is based upon what a manufacturer can produce in___conditions.
realistic
is a measure used to determine how much capacity is actually used on an average basis.
Capacity utilization
What is the primary focus of the theory of constraints (TOC)?
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.
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.
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.
Which of the following involves a firm having one manufacturing location to produce one product and shipping the product around the country or world?
Product facility strategy
ransportation costs, government incentives, and local wage rates are____ factors that influence manufacturing location decisions.
Quantitative
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.
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.
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.
True. Continuous flow and assembly lines are usually dedicated facilities that produce large volumes with little, if any, difference in the products.
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.
Assembly line
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.
False. Economy of scope requires flexibility within the organization to produce a variety of products.
When a firm is engaged in capacity planning, which of the following is most important to consider?
Current and future market demand
Which of the following would most likely use a product-oriented layout?
Mattress manufacturer
Which of the following best defines design capacity?
The maximum achievable output of a process in ideal conditions
Effective capacity is best described as maximum capacity given ________.
equipment failures
Which of the following is a metric for determining how much capacity is used, on average?
Capacity Utilization
By implementing the theory of constraints (TOC), an operations manager is attempting to ________.
achieve optimal throughput
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.
Regional Facility
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 ________.
product facility strategy
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?
Supplier proximity
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?
Proximity to customers
________ involves determining the most appropriate method of completing a task based on technical issues and scale issues.
Process selection
True or false? For a firm that wants to develop a competitive advantage as a low-cost leader, flow-oriented processes are appropriate.
True
——- requires flexibility within the organization and suggests building volume to cover fixed costs by producing a variety of products on the same equipment.
Economy of Scope
