When the average unit cost of a good or service decreases as the capacity and/or volume of throughput increases, it is called ____.

When the average unit cost of a good or service decreases as the capacity and/or volume of throughput increases, it is called ____.

a. Economies of scale
b. Diseconomies of scale
c. Cost cushioning
d. A nonphysical constraint







Answer: A

Which of the following is a short-term capacity decision?

Which of the following is a short-term capacity decision?

a. Expanding the size and number of beds in a hospital
b. Amount of warehouse space to rent for a new promotional item
c. Closing down a distribution center
d. Changing the cooking technology in a chain of fast-food restaurants








Answer: B

In service organizations, capacity is more often viewed as ____.

In service organizations, capacity is more often viewed as ____.

a. The maximum rate of output per unit time
b. Units of resource availability
c. The ability to meet any customer demand
d. The amount of overtime scheduled







Answer: B

C&M Machining is developing plans for a dedicated production line and needs to determine how many drill presses will be needed. Engineering estimates are that one drill press will be able to process 120 parts per hour. Daily demand is 2,400 parts. C&M operates one 8-hour shift per day. How many drill presses are needed to meet the capacity requirements?

C&M Machining is developing plans for a dedicated production line and needs to determine how many drill presses will be needed. Engineering estimates are that one drill press will be able to process 120 parts per hour. Daily demand is 2,400 parts. C&M operates one 8-hour shift per day. How many drill presses are needed to meet the capacity requirements?

a. 2 drills
b. 3 drills
c. 4 drills
d. 5 drills







Answer: B

Safety capacity or a capacity cushion is

Safety capacity or a capacity cushion is

a. needed for processes with little demand variability
b. provided for anticipated events
c. generally higher in a job shop
d. not appropriate for service organizations








Answer: C

The long-term capacity expansion strategy that can be called a capacity straddle strategy is

The long-term capacity expansion strategy that can be called a capacity straddle strategy is

a. One large capacity increase
b. Small capacity increases that match demand
c. Small capacity increases that lead demand
d. Small capacity increases that lag demand









Answer: B

Safety capacity is intended for all of the following except

Safety capacity is intended for all of the following except

a. power outages
b. equipment breakdowns
c. seasonal demand
d. material shortages








Answer: C

Average safety capacity (%) is computed as

Average safety capacity (%) is computed as

a. Average resource utilization (%) 100%
b. 100% average resource utilization (%)
c. [maximum safety capacity (%) + minimum safety capacity (%)]/2
d. 100% maximum resource utilization (%)







Answer: B

Which of the following is not a valid approach to gathering data for judgmental forecasting?

Which of the following is not a valid approach to gathering data for judgmental forecasting?

a. Questionnaire
b. Telephone contact
c. Personal interview
d. Company records






Answer: D

Exponential smoothing...

Exponential smoothing...

a. Works best for long-term forecasting
b. Yields a mathematically optimal solution
c. Assigns weights to past data that decay exponentially as the data gets older
d. Cannot be adapted to handle trend









Answer: C

Which of the following is not a statistical method?

Which of the following is not a statistical method?

a. Delphi
b. Exponential smoothing
c. Moving average
d. Linear regression








Answer: A

Repeatable periods of ups and downs over short periods of time are called ____.

Repeatable periods of ups and downs over short periods of time are called ____.

a. Trends
b. Seasonal patterns
c. Cyclical patterns
d. Irregular variation





Answer: B

___ forecasts are needed for planning production schedules and to assign workers to jobs.

___ forecasts are needed for planning production schedules and to assign workers to jobs.

a. Long-range
b. Intermediate-range
c. Short-range
d. Demand planning








Answer: C

Combine forecasts from approaches that are similar. A group of international experts published a set of principles of forecasting that includes all of the following except

Combine forecasts from approaches that are similar. A group of international experts published a set of principles of forecasting that includes all of the following except

a. Use quantitative rather than qualitative methods.
b. Combine forecasts from approaches that are similar.
c. Ask experts to justify their forecasts in writing.
d. Use multiple measures of forecast accuracy.






Answer: B

A tracking signal provides a method for quantifying forecast

A tracking signal provides a method for quantifying forecast

a. bias
b. error
c. accuracy
d. outliers








Answer: A

Using a smoothing constant of 0.1 in Delphi methods of forecasting. All of the following are important concepts in forecasting except

Using a smoothing constant of 0.1 in Delphi methods of forecasting. All of the following are important concepts in forecasting except

a. Determining the planning horizon length.
b. Determining the time bucket size (i.e., year, quarter, month, week, day, etc.).
c. Using a smoothing constant of 0.1 in Delphi methods of forecasting.
d. Identifying cyclical patterns.







Answer: C

Company records Which of the following is not a valid approach to gathering data for judgmental forecasting?

Company records Which of the following is not a valid approach to gathering data for judgmental forecasting?

a. Questionnaire
b. Telephone contact
c. Personal interview
d. Company records









Answer: D