Question 1

A__________consists of dynamic methods to forecast demand, allocate perishable assets across market segments, decide when to overbook and by how much, and determine what price to charge different customer classes.

Accepted Answer

The description provided matches the functionality of a revenue management system, which is designed to optimize revenue by dynamically adjusting prices and allocation of resources based on demand and customer segments. The other options are not related to revenue management.

Question 2

A__________matches capacity additions with demand as closely as possible.

Accepted Answer

The capacity straddle strategy matches capacity additions with demand as closely as possible. This strategy involves adding capacity in small increments to meet demand without leading to oversupply or underutilization of existing capacity. Capacity lag strategy involves adding capacity after demand outstrips the current capacity, which may lead to missed sales opportunities. Capacity lead strategy involves adding capacity before the demand arises, which may lead to excess capacity and increased costs. Capacity reduction strategy refers to the reduction of capacity due to changes in demand or cost-cutting measures.

Question 3

Which of the following statements is true of a work order

Accepted Answer

A work order includes the processing requirements for a type of work, such as the materials needed, the steps to take, and the time required to complete the work. It is commonly used in manufacturing and maintenance industries. It can be defined for both goods and services. The capacity cushion is a different concept related to capacity planning in manufacturing.

Question 4

__________are achieved when the average unit cost of a good or service decreases as the capacity and/or volume of throughput increases.

Accepted Answer

Economies of scale are achieved when the average unit cost decreases with an increase in capacity and/or volume of throughput. This happens because fixed costs are spread over a larger number of units, resulting in lower per-unit costs. Option A refers to factories that have no clear focus or strategy. Option B refers to the extra capacity that a firm may keep as a buffer to handle unexpected demand fluctuations. Option C refers to a situation where average costs increase as the firm grows, possibly due to bureaucracy or inefficiencies.

Question 5

The earliest revenue management systems focused solely on__________.

Accepted Answer

The answer of The earliest revenue management systems focused solely...

Question 6

Which of the following is a way to manage capacity by adjusting short-term capacity levels

Accepted Answer

Shifting work to slack periods is a way to manage capacity by adjusting short-term capacity levels. This means that the organization can increase or decrease the volume of work during a particular period based on the available capacity. By doing so, the organization can avoid overloading the system during busy periods and can use the available capacity more efficiently. Options A, B, and C are not related to managing capacity by adjusting short-term capacity levels.

Question 7

Blyrie Inc., a sports goods manufacturing company, follows a policy that involves manufacturing only when the demand exceeds the amount of goods already manufactured. Given this information, Blyrie Inc. most likely uses a _____ to expand its capacity.

Accepted Answer

Blyrie Inc. follows a capacity lag strategy as they manufacture only when the demand exceeds the amount of goods already manufactured. A capacity lag strategy involves increasing capacity only when the demand is high, which helps to prevent overproduction and reduces inventory costs.

Question 8

In service industries, capacity is often viewed as the _____.

Accepted Answer

In service industries, capacity is often viewed as the units of resource availability, such as the number of employees, equipment, and space available to perform the service. It is the potential maximum output that a service provider can offer to its customers. The other options listed are not accurate definitions of capacity in service industries.

Question 9

A _____ is a strategy for expanding capacity that waits until demand has increased to a point where additional capacity is necessary.

Accepted Answer

Capacity lag strategy is a reactive approach to expanding capacity, where the organization waits until demand has increased to a point where additional capacity is necessary. This allows the organization to avoid overinvesting in capacity that may not be needed, but can also result in delays and backlogs if capacity is not expanded quickly enough to meet demand.

Question 10

Nonbottleneck management principles differ from bottleneck management principles because according to nonbottleneck management principles, _____.

Accepted Answer

Nonbottleneck management principles prioritize maintaining a steady flow of work throughout the entire process, including nonbottleneck resources. This means that idle time at nonbottleneck resources is acceptable if there is no work to do, as it does not impact the overall output of the process or factory. In contrast, bottleneck management principles prioritize maximizing the efficiency of bottleneck resources, and an hour lost at a bottleneck resource can significantly impact the output of the entire process or factory. Choice B is a principle of bottleneck management, not nonbottleneck management. Choice C is a principle of lean manufacturing, not specifically nonbottleneck management. Choice D is not a principle of either bottleneck or nonbottleneck management, as it does not provide specific guidance on managing resources.

Question 11

At Rues and West Bros., a spare parts manufacturing company, the most important competitive priority is quality. Only a few key spare parts are produced using similar process designs. In this scenario, Rues and West Bros. _____.

Accepted Answer

Rues and West Bros. is a focused factory because it focuses on producing a few key spare parts with a priority on quality.

Question 12

In the Theory of Constraints, a__________is one that effectively limits the capacity of the entire process.

Accepted Answer

In the Theory of Constraints, a bottleneck is the activity that effectively limits the capacity of the entire process. This means that if we can identify and address the bottleneck, we can improve the overall performance of the process. Nonbottleneck activities, on the other hand, may still be important, but they do not have as big of an impact on the overall capacity of the process. Nonphysical and core process activities are not specifically related to the concept of bottlenecks in the Theory of Constraints.

Question 13

Lumeris Inc., an automobile manufacturer, has an inflexible work schedule and requires its workers to work nine hours a day and six days a week. Its laborers do not have adequate skills to perform their job efficiently. The inflexible work schedule and inadequate labor skills are examples of _____.

Accepted Answer

Nonphysical constraints refer to limitations in processes, procedures, or policies that impact the productivity or efficiency of a business or organization. In this case, the inflexible work schedule and inadequate labor skills are examples of nonphysical constraints that are hindering Lumeris Inc.'s operations.

Question 14

Which of the following statements is true of setup time

Accepted Answer

Setup time is generally considered to be independent of the order size for manufacturing work orders. It is the time required to prepare a machine or process for production, which does not typically change based on the volume of the order being processed.

Quiz 10: Capacity Management