An expansionist capacity strategy is NOT indicated when

1. capacity expansion is consistently ahead of demand.
2. expansion will lead to economies of scale.
3. expansion is made in large increments.
4. a preemptive marketing strategy is used.

b

In​ general, a less​ capital-intensive industry such as a hotel chain would do well with a utilization rate of

1. 30-40%.
2. ​60-70%.
3. approximately​ 18%.
4. ​100%.

b

​Waiting-line models often are used in capacity planning in order to

1. evaluate different capacity expansion alternatives when demand is uncertain.
2. understand why forecast accuracy declines as the forecasting horizon lengthens.
3. select an appropriate capacity cushion for a high​ customer-contact process.
4. analyze the payoff of a series of​ events, such as​ competitors' actions, which requires a sequence of decisions regarding capacities.

c

​Long-term capacity planning deals with which of the following​ factors?

1. Investment in new facilities
2. Inventories
3. Overtime budgets
4. Workforce size

a

​Waiting-line problems that cannot be studied with​ waiting-line models must be analyzed with which analytical​ tool?

1. simulation
2. regression analysis
3. forecasting tools
4. decision trees

a

Input measures of capacity are preferred when there

1. are flexible flow processes.
2. are service processes.
3. is low customization.
4. are​ high-volume processes.

a

When evaluating alternative capacity​ decisions, qualitative concerns exclude

1. competitive reaction.
2. cash flow.
3. technology change.
4. uncertainties about demand.

b

Which tool deals more formally with demand uncertainty and variability of capacity​ decisions?

1. ​break-even analysis
2. productivity analysis
3. preference matrix
4. ​waiting-line models

d

​Anna's landscaping business has a capacity​ gap; which alternative can best be described as​ "simply to do​ nothing"?

1. Follow-the leader strategy
2. Expansionist strategy
3. ​Wait-and-see strategy
4. ​Base-case strategy

d

Using input measures of capacity is least appropriate in which of the following​ situations?

1. significant learning effects are expected
2. the product or service mix is changing
3. productivity rates are expected to change
4. product variety and process divergence is low

d

Capacity planning requires demand forecasts for an extended period of time. Forecast accuracy tends to​ _______ as the forecasting horizon​ _______.

1. remain​ unchanged; lengthens
2. ​increase; lengthens
3. ​decline; shortens
4. ​decline; lengthens

d

A diseconomy of scale is realized when

1. the average cost per unit decreases as the​ facility's size increases.
2. it becomes cheaper to produce fewer items per production period.
3. the average cost per unit increases as the​ facility's size decreases.
4. the average cost per unit increases as the​ facility's size increases.

d

Which of the following is a principal reason that explains why economies of scale can drive costs down when output​ increases?

1. costs of purchased materials are cut
2. construction costs are reduced
3. process advantages are found
4. All of the above.

d

Chang and Chang observe that the competition is increasing the size of its warehouses. They have decided to do the same. They are following​ _______ strategy.

1. a follow the leader
2. a​ wait-and-see
3. an expansionist
4. a Theory of Constraints

a

A measure of the reserve capacity a process has to handle in unexpected increases in demand is the

1. capacity utilization rate.
2. capacity bottleneck.
3. capacity cushion.
4. capacity constraint limit.

c