FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 5: Strategic Capacity Planning for Products and Services

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 1

Short Answer

Review LaterAdd Note

Review Later

Consider the following information: $\begin{array} { l l } \text { Fixed Costs: } & \$ 15,000 \text { per year } \\\text { Variable Costs: } & \$ 1.00 \text { per unit } \\\text { Revenue: } & \$ 1.60 \text { per unit } \\\text { Design Capacity: } & 45,000 \text { units per year } \\\text { Effective Capacity: } & 40,000 \text { units per year } \\\text { Anticipated Output: } & 36,000 \text { units per year }\end{array}$ What are total costs for the break-even quantity?

Correct Answer

verified

Show Answer

Question 2

Short Answer

Review LaterAdd Note

Review Later

Consider the following information: $\begin{array} { l l } \text { Fixed Costs: } & \$ 15,000 \text { per year } \\\text { Variable Costs: } & \$ 1.00 \text { per unit } \\\text { Revenue: } & \$ 1.60 \text { per unit } \\\text { Design Capacity: } & 45,000 \text { units per year } \\\text { Effective Capacity: } & 40,000 \text { units per year } \\\text { Anticipated Output: } & 36,000 \text { units per year }\end{array}$ What are total revenues for the break-even quantity?

Correct Answer

verified

Show Answer

Question 3

True/False

Review LaterAdd Note

Increasing productivity and also quality will result in increased capacity.

The current trend toward global operations has made capacity decisions much easier since we have the whole world in which to consider operations.

Capacity decisions are usually one-time decisions; once they have been made, we know the limits of our operations.

If the output rate is increased but the average unit costs also increase, we are experiencing:

The efficiency of a productive unit is 60 percent. The unit produces an average of 20 forklift trucks per day. Determine the effective capacity of the unit.

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. How many rosebushes would she have to produce and sell in order to make a profit of $6,000?

The owner of Firewood To Go is considering buying a hydraulic wood splitter which sells for $50,000. He figures it will cost an additional $100 per cord to purchase and split wood with this machine, while he can sell each cord of split wood for $125. How many cords of wood would he have to split with this machine to break even?

Given the following data for a make-or-buy decision: $\begin{array} { l l l } \text { Alternative } & \text { Fixed Cost } & \text { Variable Cost } \\\hline \text { Buy } & \$ 0 \text { per year } & \$ 8 \text { per unit } \\\text { Make } & \$ 100,000 \text { per year } & \$ 4 \text { per unit }\end{array}$ What are total costs to buy a quantity of 15,000 units per year?

Which of the following is not a reason why capacity decisions are so important?

When determining the timing and degree of capacity change, one can use the approach of:

Given the following information, what would utilization be? Effective capacity = 20 units per day Design capacity = 60 units per day Actual output = 15 units per day

A market constraint can be overcome by:

Given the following data for a make-or-buy decision: $\begin{array} { l l l } \text { Alternative } & \text { Fixed Cost } & \text { Variable Cost } \\\hline \text { Buy } & \$ 0 \text { per year } & \$ 8 \text { per unit } \\\text { Make } & \$ 100,000 \text { per year } & \$ 4 \text { per unit }\end{array}$ For what quantity would you be indifferent between buying and making?

Which of the following would tend to reduce effective capacity?

Stating capacity in dollar amounts generally results in a consistent measure of capacity regardless of the actual units of measure.

Consider the following information: $\begin{array} { l l } \text { Fixed Costs: } & \$ 15,000 \text { per year } \\\text { Variable Costs: } & \$ 1.00 \text { per unit } \\\text { Revenue: } & \$ 1.60 \text { per unit } \\\text { Design Capacity: } & 45,000 \text { units per year } \\\text { Effective Capacity: } & 40,000 \text { units per year } \\\text { Anticipated Output: } & 36,000 \text { units per year }\end{array}$ What profit (loss) would there be for a quantity of 10,000?

Doctor J. is considering purchasing a new blood analysis machine to test for HIV; it will cost $60,000. He estimates that he could charge $25.00 for an office visit to have a patient's blood analyzed, while the actual cost of a blood analysis would be $5.00. How many HIV blood analyses would he have to perform in order to make a profit of $15,000?

According to the reading on restaurant sourcing practices, only fast-food restaurants are able to bring in outsourced foods.