Term
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Definition
(True or False) The term capacity refers to the maximum quantity an operating unit can process over a given period of time. |
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Term
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Definition
(True or False) If the unit cost to buy something is less than the variable cost to make it, the decision to make or buy is based solely on the fixed costs. |
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Term
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Definition
(True or False) Increasing productivity and also quality will result in increased capacity. |
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Term
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Definition
(True or False) An example of an external factor that influences effective capacity is government safety regulations. |
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Term
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Definition
(True or False) Capacity increases are usually acquired in fairly large "chunks" rather than in smooth increments. |
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Term
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Definition
(True or False) Capacity planning requires an analysis of needs; what kind, how much and when. |
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Term
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Definition
(True or False) Capacity decisions often involve a long-term commitment of resources which, when implemented, are difficult or impossible to modify without major added costs. |
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Term
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Definition
Outsourcing some production is a means of _________ a capacity constraint. |
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Term
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what kind is needed |
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how much is needed |
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when is it needed |
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all of these |
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none of these |
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Definition
A basic question in capacity planning is
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what kind is needed |
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how much is needed |
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when is it needed |
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all of these |
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none of these |
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Term
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Definition
Which of these factors wouldn't be subtracted from design capacity when calculating effective capacity
Personal time |
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Maintenance |
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Scrap |
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Operating hours per day |
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None of these |
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Term
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Definition
A reason for the importance of capacity decisions is that capacity
imits the rate of output possible |
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affects operating costs |
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is a major determinant of initial costs |
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is a long-term commitment of resources |
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all of these |
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Term
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Definition
Which of the following is the case where capacity is measured in terms of inputs
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Hospital |
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Theater |
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Restaurant |
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All of these |
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None of these |
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Term
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Definition
The impact that a significant change in capacity will have on a key vendor is a
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operational process factor |
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process limiting factor |
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supply chain factor |
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internal factor |
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human resource factor |
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Term
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Definition
Which of the following is a factor that affects service capacity planning
The need to be near customers |
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The inability to store services |
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The degree of volatility of demand |
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The customer's willingness to wait |
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All of these |
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Term
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Definition
Given the following information, what would efficiency be? Effective capacity = 50 units per day Design capacity = 100 units per day Actual output = 30 units per day
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Term
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Definition
Capacity planning decisions have both long-term and short-term considerations. Which of the following statements are true? (I) Long-term considerations relate to the overall level of capacity. (II) Short-term considerations relate to the probable variations in capacity requirements. (III) Short-term considerations determine the "effective capacity."
All three statements are correct. |
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I and III |
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II and III |
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I and II |
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Only one of the three statements is true.
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Term
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Definition
Capacity in excess of expected demand that is intended to offset uncertainty is a:
margin protect |
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line balance |
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capacity cushion |
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timing bubble |
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none of these |
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Term
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Definition
Short-term considerations in determining capacity requirements include
demand trend |
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seasonal demand variations |
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new product development plans |
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cyclical demand variations |
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mission statements |
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Term
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Definition
Which of the following is not a criterion for developing capacity alternatives?
Attempt to smooth out capacity requirements |
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Prepare to deal with capacity in "chunks" |
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Identify the optimal operating level |
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Take a big-picture approach to capacity changes |
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Design structured, rigid systems |
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Term
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Definition
Short-term considerations in determining capacity requirements include:
demand trend |
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seasonal demand variations |
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new product development plans |
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cyclical demand variations |
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mission statements |
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Term
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Definition
Seasonal variations are often easier to deal with in capacity planning than random variations because seasonal variations tend to be:
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larger |
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predictable |
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smaller |
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controllable |
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less frequent |
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Term
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Definition
Production units have an optimal rate of output where:
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marginal costs are minimum |
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rate of output is maximum |
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total costs are minimum |
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average unit costs are minimum |
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total revenue is maximum
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Term
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Definition
At the break-even point:
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variable cost equals total revenue |
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variable cost equals fixed cost |
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total cost equals profit |
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total cost equals total revenue |
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output equals capacity
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Term
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Definition
If the output rate is increased but the average unit costs also increase we are experiencing:
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step-function scale up. |
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market share erosion. |
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diseconomies of scale. |
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economies of scale. |
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value added accounting. |
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Term
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Definition
When determining the timing and degree of capacity change, one can use the approach of:
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backordering |
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expand early strategy |
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wait-and-see strategy |
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lead time flexibility strategy |
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delayed differentiation
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Term
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Definition
The owner of a greenhouse and nursery is considering whether to spend $6,000 to acquire the licensing rights to grow a new variety of rosebush, which she could then sell for $6 each. Per-unit variable cost would be $3.
If her available land has design and effective capacities of 3,000 and 2,000 rosebushes per year respectively, and she plans to grow 1,200 rosebushes each year on this land, what will be the utilization of this land?
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Term
a. |
Maximin. |
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Reassign [image] |
b. |
Maximax. |
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New Staff [image] |
c. |
Minimax regret. |
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New Staff [image] |
d. |
Laplace. |
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New Staff or Reassign [image] |
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Definition
The director of social services of a county has learned that the state has mandated additional information requirements. This will place an additional burden on the agency. The director has identified three acceptable alternatives to handle the increased workload. One alternative is to reassign present staff members, the second is to hire and train two new workers, and the third is to redesign current practice so that workers can readily collect the information with little additional effort. An unknown factor is the caseload for the coming year when the new data will be collected on a trial basis. The estimated costs for various options and caseloads are shown in the following table:
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CASELOAD
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Moderate |
High |
Very High |
Reassign staff |
$52* |
60 |
89 |
New staff |
62 |
60 |
65 |
Redesign collection |
40 |
50 |
94 |
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*Cost in $ thousands.
Assuming that past experience has shown the probabilities of various caseloads to be unreliable, what decision would be appropriate using each of the following criteria?
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Term
a. |
Maximin. |
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Relocate [image] |
b. |
Maximax. |
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Renew [image] |
c. |
Laplace. |
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Relocate [image] |
d. |
Minimax regret. |
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Renew [image] |
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Definition
The lease of Theme Park, Inc., is about to expire. Management must decide whether to renew the lease for another 10 years or to relocate near the site of a proposed motel. The town planning board is currently debating the merits of granting approval to the motel. A consultant has estimated the net present value of Theme Park's two alternatives under each state of nature as shown on the following page.
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What course of action would you recommend using? |
Options |
Motel Approved |
Motel Rejected |
Renew |
$500,000 |
$4,000,000 |
Relocate |
6,000,000 |
200,000 |
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Term
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Definition
An advantage of a U-shaped production line is that it:
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is more compact. |
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permits better communication among employees. |
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facilitates teamwork among workers. |
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increases flexibility of work assignments. |
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all of these |
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Term
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Definition
(True or False) Flexibility can be used as a competitive strategy. |
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Term
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Definition
The term computer aided manufacturing (CAM) refers primarily to the use of robotics in process control.
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Term
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Definition
Poor layouts are found in both manufacturing and service organizations.
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Term
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Definition
Which of the following process types would be more likely to be used in the introductory phase of a product's life-cycle?
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batch |
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project |
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intermittent |
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continuous |
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job shop |
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Term
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Definition
A manufacturing cell allows the production of a wide-range of very different products.
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Term
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Definition
Which type of processing system tends to produce the most product variety?
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Project |
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Batch |
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Assembly |
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Job-Shop |
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Continuous |
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Term
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Definition
As a general rule, continuous processing systems produce products for inventory rather than for customer order.
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Term
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Definition
Which of the following is a primary concern for process selection?
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variety in products/services |
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flexibility of equipment |
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volume of output |
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all of these |
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none of these |
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Term
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Definition
A disadvantage of a product layout can be high in-process inventory costs.
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Term
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Definition
Process layouts feature departments or other functional groupings of personnel or equipment.
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Term
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Definition
The advantages of automation include: (I) Reduced output variability. (II) Reduced variable costs. (III) Machines don't strike or file grievances. (IV) Machines are always less expensive than human labor.
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I, II, and III |
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I and III |
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I and IV |
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II and IV |
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II and III |
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Term
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Definition
Process layouts allow greater flexibility in processing than product layouts.
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Term
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Definition
A possible disadvantage of a product layout is an inflexible system.
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Term
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Definition
Intermittent processing can take the form of batch processing or a job shop.
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Term
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Definition
Repetitive processing systems usually produce goods specifically for customer orders rather than for inventory.
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Term
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Definition
Numerically controlled (N/C) machine and some robots are applications of programmable automation.
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Term
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Definition
The design of service layouts, e.g., warehouse and supermarket layouts, focuses on cost minimization and product flow.
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Term
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Definition
Product layouts involve high utilization of labor and equipment.
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Term
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Definition
Avoiding bottlenecks is the primary goal of product design.
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Term
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Definition
Morale problems can be a reason for redesign of a facility layout.
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Term
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Definition
A cafeteria line would be an example of a process focused layout.
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Term
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Definition
Information technology refers to competitive data.
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Term
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Definition
A process layout is more susceptible to shutdowns caused by equipment breakdowns than a product layout.
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Term
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Definition
Mismatches between operational capabilities and market demand can have a negative impact on an organization.
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Term
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Definition
Which of the following is not a process commonly considered in making products or delivering services?
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job shop |
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repetitive |
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batch |
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continuous |
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subcontracting |
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Term
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Definition
Computer-aided manufacturing (CAM) refers to the use of computers in:
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process control |
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product design |
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decision making |
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quality control |
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data analysis |
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Term
A group of machines including supervisory computer control, automatic material handling, and possibly robots is called:
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Definition
A group of machines including supervisory computer control, automatic material handling, and possibly robots is called:
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a manufacturing cell |
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computer-integrated manufacturing |
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computer-aided manufacturing |
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a flexible manufacturing system |
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computer aided design |
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Term
An operations strategy for process selection should recognize that:
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Definition
An operations strategy for process selection should recognize that:
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engineering "white elephants" are uncommon |
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process selection seldom requires technical expertise |
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flexibility is not always the best choice |
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most technical skills can be contracted out to consultants |
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there is little need to manage technology |
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Term
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Definition
Which one of the following is not considered an important factor in service layout design?
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customer attitude and image |
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cost minimization and product flow |
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frequency of orders |
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all of these are important |
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none of these are important |
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Term
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Definition
The type of layout in which workers, materials, and equipment are moved to the product as needed is:
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product |
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process |
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mass |
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batch |
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fixed-position |
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Term
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Definition
Layout design has many objectives, one of which is ______.
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install computer terminals every 500 feet |
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hold material handling costs to 27% or less |
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use workers and space efficiently |
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reduce bottlenecks |
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move materials and workers simultaneously |
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Term
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Definition
A service organization (for example, a hospital) is likely to use a ________ layout because of variability in customer processing requirements.
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project |
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non-repetitive |
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assembly |
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flow |
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process |
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Term
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Definition
A product focused, single piece flow, pull production system would be called a:
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continuous flow |
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assembly line |
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non-repetitive process |
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cellular layout |
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job shop |
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Term
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Definition
What is it about continuous processes that make them appropriate for products in the maturity phase of their life-cycle?
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general-purpose technology |
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efficiency |
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flexibility |
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low risk |
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possible variety
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