Submitted by: Submitted by moonxstar
Views: 723
Words: 14381
Pages: 58
Category: Business and Industry
Date Submitted: 05/23/2013 05:09 AM
Chapter 5
Facility Capacity, Location, and Layout
True/False
1. Long-range capacity plans are usually based on the monthly sales targets.
ANSWER F
2. The first step in long-range capacity planning is estimating the capacities of the present facilities.
ANSWER T
3. Production capacity is defined as the maximum production rate of an organization.
ANSWER T
4. When a factory produces a mix of diverse products, the best way to measure capacity is to use the percentage of capacity utilization method.
ANSWER F
5. Manufacturing capacities are usually more difficult to measure and estimate than service capacities.
ANSWER F
6. A capacity cushion is an additional amount of production capacity added onto expected demand.
ANSWER T
7. Considering how much capacity competitors are likely to add is an important consideration in determining what a company should do.
ANSWER T
8. Subcontracting with other companies is one method to reducing a company's long range capacity.
ANSWER F
9. Diseconomies of scale occur as volume is increased past the best operating level.
ANSWER T
10. One of the major causes of industry overcapacity in the U.S. is the argument for larger facilities to achieve greater economies of scale.
ANSWER T
11. Two concepts that are compatible in planning production capacity are economies of scale and focused production.
ANSWER F
12. Decision trees are appropriate for multiphase decisions in an environment of certainty.
ANSWER F
13. In a decision tree, circles represent chance events and squares represent decision nodes.
ANSWER T
14. Pruning a branch of a decision tree occurs at chance events.
ANSWER F
15. The primary value of decision trees is as a useful way of organizing how operations managers think about complex multiphase decisions.
ANSWER T
16. The first decision...