Deck 11: Supply Chain Management

Question 1

Which of the following is NOT a measure of utilisation?

A) Load factor for aircraft.
B) Number of hours available for production.
C) Uptime in a factory.
D) Room occupancy level in hotels.

Answer 1

Number of hours available for production.

Question 2

Are the number of beds available in a hospital an input or output capacity measure.

A) Input measure of capacity
B) Output measure of capacity

Answer 2

Input measure of capacity

Question 3

Over-booking seats by an airline is an approach used to maximise yield.

Answer 3

True

Question 4

The following figures were reported at a management meeting for the kitchen facility of a restaurant: actual output was 62 hours, design capacity is 150 hours, and the effective capacity was
120 hours. What are the kitchen facility's utilisation and efficiency respectively?

A) 0.41 & 0.52
B) 0.38 & 0.41
C) 0.48 & 0.63
D) 0.63 & 0.57
E) 0.54 & 0.68

Question 5

Adjusting capacity to reflect the fluctuations in demand is known as:

A) Level capacity plan
B) Chase demand plan
C) Demand management

Question 6

Utilisation is:

A) Actual output/effective capacity
B) Downtime/Effective capacity
C) Uptime/Effective capacity
D) Actual output/design capacity

Question 7

Are the number of litres of beer produced by a brewery an input or output capacity measure.

A) Input measure of capacity
B) Output measure of capacity

Question 8

If the long-term outlook is good, but the short-term outlook is normal, the operation should:

A) Lay off staff
B) Hire and make for inventory, start to recruit
C) Adopt short time/idle time
D) Overtime/hire temporary workers
E) Make for inventory/adopt short time F) Hire staff

Question 9

Are the number of students graduating from a university an input or output capacity measure.

A) Input measure of capacity
B) Output measure of capacity

Question 10

If the long-term outlook is poor and the short-term outlook is poor, the operation should:

A) Overtime/hire temporary workers
B) Hire and make for inventory, start to recruit
C) Make for inventory/adopt short time
D) Adopt short time/idle time
E) Hire staff
F) Lay off staff

Question 11

Attempting to change demand to fit available capacity is known as:

A) Level capacity plan
B) Chase demand plan
C) Demand management

Question 12

An organisation that produces goods that cannot be stored is more likely to adopt which capacity plan?

A) Level capacity plan
B) Chase demand plan
C) Demand management

Question 13

The idea of a fluctuating workforce that matches demand can be regarded as unethical.

Question 14

Is the sales floor area in a retail outlet an input or output capacity measure.

A) Input measure of capacity
B) Output measure of capacity

Question 15

Ignoring the fluctuations and keeping activity levels constant is known as:

A) Level capacity plan
B) Chase demand plan
C) Demand management

Question 16

What is meant by yield management?

A) The maximisation of profit through capacity, demand and pricing policies.
B) Encouraging growth in demand during periods of low demand and restraining it during periods of high demand.
C) Expanding the operation at periods of high demand in order to yield more sales revenue.
D) Overbooking capacity to ensure that all capacity is filled at all times.

Question 17

Queueing theory describes the expected behaviour of customers in a queue.

Question 18

What is meant by the term capacity?

A) Maximum level of demand experienced over a period of time.
B) The amount of work normally undertaken over a period of time.
C) The limit of output over a period of time.
D) Maximum level of value added activity over a period of time.

Question 19

Which of the following measures is not part of determining the overall equipment effectiveness (OEE) of an individual piece of equipment.

A) Quality of the product
B) Speed or throughput rate
C) Time it is available to operate
D) Cost of the equipment

Question 20

If the long-term outlook is good, but the short-term outlook is poor, the operation should:

A) Lay off staff
B) Adopt short time/idle time
C) Hire and make for inventory, start to recruit
D) Hire staff
E) Make for inventory/adopt short time F) Overtime/hire temporary workers

Question 21

The definition of capacity incorporates both scale and time dimensions.

Question 22

In an operating system, processes A / B / C have the following maximum designed capacity: A = 1700 units / B = 1650 units / C = 1800 units. If the actual measured output is 1400 units, what is the
System efficiency?

A) 105%
B) 95%
C) 75%
D) 85%
E) 90%

Question 23

The efficiency of an operations system is measured in terms of its:

A) Effective capacity against designed capacity
B) Actual output against designed capacity
C) Designed capacity against nominal capacity
D) Effective capacity against scheduled throughput
E) Actual output against effective capacity

Question 24

What measure is an increasingly popular method of judging the effectiveness of operations equipment?

A) Fishbone analysis
B) Total production method
C) Operational effectiveness measure
D) Overall equipment effectiveness measure

Question 25

Capacity is usually expressed in terms of:

A) The design life of an operations process
B) Potential output from an operations system
C) Man-hours available without overtime
D) A production forecast
E) The Master Production Schedule

Question 26

Medium-term capacity planning and control usually involves an assessment of demand forecasts over what period?

A) 1 - 6 months
B) 2 - 18 months
C) 6 months - 2 years
D) 1 - 4 weeks

Question 27

Which of the following is NOT a measure of utilisation?

A) Uptime in a factory
B) Room occupancy level in hotels
C) Load factor for aircraft
D) Number of hours available for production

Question 28

With a 'level capacity' plan, which one of these statements is correct?

A) Processing capacity will vary according to demand.
B) Outputs are stored until required.
C) Processes are buffered through inventory.
D) Throughput rates respond to changes in demand.
E) Staff turnover is likely to be low.

Question 29

Capacity planning and control involves:

A) Dealing with fluctuations in demand over 1-7 days, but not over any longer period
B) Dealing with difficult suppliers
C) Setting capacity levels in the long term
D) Setting capacity levels over the short and medium term in aggregated terms

Question 30

Adjustments that enable operations to flex output over a short timescale are called:

A) Minor adjustment techniques
B) Mixed capacity planning
C) Flexibility capacity strategies
D) Short-term capacity adjustments

Question 31

Which of the following is the correct order of steps in capacity planning and control?

A) 1. Measure demand and capacity; 2. Select capacity plan; 3. Increase capacity to meet demand
B) 1. Measure demand and capacity; 2. Identify the alternative capacity plans; 3. Choose most appropriate capacity plan.
C) 1. Choose an appropriate capacity plan; 2. Measure demand and capacity; 3. Seek to balance supply and demand
D) 1. Identify the alternative capacity plans; 2. Choose most appropriate capacity plan; 3. Measure demand and capacity.

Question 32

Approximately how many cans is Britvic's National Distribution Centre able to hold?

A) 140 thousand
B) 14 thousand
C) 140 million
D) 1.4 billion

Question 33

Capacity levels in excess of demand could cause under-utilisation.

Question 34

In an operating system, processes A / B / C have the following maximum designed capacity: A = 1600 units / B = 1550 units / C = 1800 units. If the actual measured output is 1400 units, what is the
System efficiency?

A) 75%
B) 85%
C) 90%
D) 95%
E) 105%

Question 35

Flexibility is reduced by surplus capacity.

Question 36

Strategies concerned with introducing or deleting major increments of physical capacity are called:

A) Incremental investment strategies
B) Top-down strategies
C) Long-term capacity strategies
D) Aggregated strategies

Question 37

One micro operation acting as a constraint on capacity may be termed a:

A) Non-viable process
B) Cost centre
C) Resource limitation
D) Bottleneck

Question 38

Parts of an operation that are at their capacity 'ceiling' are:

A) High utilisation processes
B) A capacity constraint
C) Target operations
D) Cost-sinking operation

Question 39

Speed can be enhanced by provision of surplus capacity.

Question 40

The most favourable solution to non-uniform demand is probably to:

A) Always maintain excess capacity
B) Hire or lay off workers as required
C) Build up sufficient inventory to meet heavy demand
D) Employ a mixed capacity management plan
E) Use overtime or part-time workers

Question 41

What type of capacity plan focuses on adjusting capacity to meet variations in demand?

A) Aggregated capacity plan
B) Level capacity plan
C) Chase demand plan
D) Demand management

Question 42

Which of the following situations would suit yield management?

A) When the market is relatively homogeneous
B) When services can be stored
C) When the marginal cost of making a sale is relatively low
D) When capacity is relatively flexible

Question 43

The most obvious way to change demand is through:

A) Promotion
B) Dependability
C) Price
D) Delivery

Question 44

Which of the following is a method of adjusting capacity?

A) All of the below
B) Annualized hours
C) Idle time
D) Overtime

Question 45

In delivering soft drinks to market, a key challenge for a distributor is:

A) Demand seasonality
B) Supply seasonality
C) Customisation
D) Supply risk

Question 46

Which of the following is NOT a requirement of a demand forecast?

A) It gives an indication of relative uncertainty.
B) It is as accurate as possible.
C) It shows the impact of failure to deliver on customer satisfaction.
D) It is expressed in terms that are useful for capacity planning and control.

Question 47

What type of capacity plan ignores fluctuations and keeps activity constant?

A) Aggregated capacity plan
B) Level capacity plan
C) Demand management
D) Chase demand plan

Question 48

In processing frozen food, a key issue is:

A) Flexibility of batch size
B) Demand uncertainty
C) Speed to market
D) Supply seasonality

Question 49

Which of the following is an output measure of capacity?

A) Number of passengers transported by an airline each week
B) Beds available in a hospital
C) Volume of fermentation tanks for a brewery
D) Generator size for an electricity company

Question 50

In periods of high demand, an operation might buy capacity from other organisations. This is called:

A) Third party logistics
B) Subcontracting
C) Annualised hours
D) Value creation

Question 51

Hire and fire is a more effective method of adjusting capacity than overtime.

Question 52

Efficiency is measured by:

A) Actual output / Design capacity
B) Design capacity / Actual output
C) Effective capacity / Design capacity
D) Actual output / Effective capacity

Question 53

Which of the following is NOT an approach to yield management?

A) Varying service types
B) Pure service delivery
C) Over-booking
D) Price discounting

Question 54

The capacity that technical designers have in mind when they commission an operation is called:

A) Optimum capacity
B) Designed capacity
C) No-limits capacity
D) Strategic capacity

Question 55

Very high under-utilisation can make level capacity plans prohibitively expensive.