Question 1

A company with fixed costs of $10,000 per month has a target price of $165 for their sole product,a heat shield for masonry fireplaces.What level of output represents their break-even point if their variable cost for producing is $35 per unit?
A)between 60 and 70 units
B)between 70 and 80 units
C)between 80 and 90 units
D)between 90 and 100 units

Accepted Answer

The answer of A company with fixed costs of $10,000...

Question 2

What is the break even point for location D if Jimbo decides to charge $21 per student?
A)4,000 students
B)4,250 students
C)4,500 students
D)5,000 students

Accepted Answer

Break-even point = Fixed costs / (Selling price per unit - Variable cost per unit)= 85,000 / (21 - 15)= 85,000 / 6= 14,166.67 students

Question 3

A subdivision is planned for forty houses,each with its own in-ground swimming pool.A contractor estimates it will take him 30 hours to build the first pool and that there is a 90% learning curve associated with this process.
-How long will it take to build all of the pools?
A)17.1 hours
B)642.75
C)796.3 hours
D)1200.0 hours

Accepted Answer

The learning curve formula can be used to estimate how long it will take to build all 40 pools:

Tn = T1 * n^log(2)/log(0.9)

where Tn is the time to build the last pool (which is what we want to find), T1 is the time to build the first pool (30 hours), n is the cumulative number of pools built, and log(0.9) is the logarithm of the learning curve coefficient (which is 0.152, since there is a 90% learning curve).

For n = 40, we get:

T40 = 30 * 40^log(2)/log(0.9)
     ≈ 796.3 hours

Therefore, the best choice is C: 796.3 hours.

Question 4

Consider the system composed of four processes linked by a conveyor belt.There is no storage between these processes pictured below.Which statement is BEST 
A)The overall system output is 220 units/hr.
B)The process that determines the system's capacity is process 4.
C)If only process 3 experiences 5 minutes of unplanned downtime,the system's overall output is diminished.
D)Overall system improvement efforts should focus on process 1.

Accepted Answer

The answer of Consider the system composed of four processes...

Question 5

A lead capacity strategy has the advantage of:
A)a reduced risk of overbuilding.
B)greater productivity due to high utilization levels.
C)assuring adequate capacity during all types of growth.
D)the ability to put off large investments as long as possible.

Accepted Answer

A lead capacity strategy means building capacity before it is needed. This allows the company to have adequate capacity during all types of growth and avoid capacity shortages. This ensures that the company can meet demand and increase productivity without the risk of overbuilding or having high unused capacity. It emphasizes the importance of investing in the right amount of capacity to be prepared for future demand.

Question 6

Jimbo Elrod has obtained fixed and variable cost information for four potential locations for his professional wrestling school and summarized it in tabular form below.All values are in dollars.
 
-Jimbo evaluates levels of demand ranging from 100 to 2,500 students per year.Which location has the lowest cost for the greatest range of students throughout this continuum?
A)Location A
B)Location B
C)Location C
D)Location D

Accepted Answer

Location C has the lowest cost for the greatest range of students from 100 to 2,500, indicating it is the most cost-effective option across the entire demand spectrum.

Question 7

Which of the following statements about learning curves is BEST?
A)Learning improvements always follow a constant pattern.
B)Frequent design changes and reengineering have no effect on learning rates.
C)Underestimated learning effects may cause overestimation of capacity needs.
D)An eighty percent learning curve means that each unit takes twenty percent less time to produce than its immediate predecessor.

Accepted Answer

Underestimating learning effects can lead to overestimating the resources needed, as improvements in efficiency are not fully accounted for.

Question 8

The average waiting time on a Thursday night for a table at a popular Chinese restaurant is 30 minutes.If customers arrive at the rate of four per hour and both the service and arrival rates are Poisson distributed,what is the average service time?
A)greater than 3 but less than 4 per hour
B)greater than 4 but less than 5 per hour
C)greater than 5 but less than 6 per hour
D)Cannot be determined from the information provided.

Accepted Answer

The average waiting time is 30 minutes, which implies the system is stable. The arrival rate is 4 customers per hour. For stability, the service rate must be greater than the arrival rate. Therefore, the service rate must be greater than 4 but less than 6 per hour.

Question 9

Business at the Kwik-E-Mart is brisk,with customers arriving at a rate of six per hour on average.Ringing up purchases is an easy matter for owner/operator Apu;he can usually do so in 2 minutes.If both arrival and service rates are Poisson distributed,how many customers are in the store on average?
A)0.05
B)0.16
C)0.25
D)0.50

Accepted Answer

The system can be modeled as a M/M/1 queue, where:

- λ = 6 customers per hour (arrival rate)
- μ = 30 customers per hour (= 1/2 minutes per customer, service rate)

The utilization factor (ρ) can be calculated as:

ρ = λ/μ = 6/30 = 0.2

The average number of customers in the system (L) can be calculated as:

L = ρ/(1-ρ) = 0.2/(1-0.2) = 0.25

Therefore, the answer is C) 0.25.

Question 10

Students arrive at a professor's office every 20 minutes during final exam week according to a Poisson distribution.What is the probability that the professor's one hour afternoon nap will not be disrupted by any student arrivals?
A)0.00
B)0.05
C)0.15
D)0.45

Accepted Answer

The answer of Students arrive at a professor's office every...

Question 11

If a firm cannot make a profit regardless of output volume,then:
A)FC > VC.
B)VC > FC.
C)VC > R.
D)BEP > VC.

Accepted Answer

If a firm cannot make a profit regardless of output volume, it means that its variable costs (VC) are greater than its revenue (R) at all levels of output, since profit is calculated as revenue minus total costs (which include variable costs).

Question 12

The maximum output capability of a system,allowing for no adjustments for scheduled or unscheduled maintenance is the ________.

Accepted Answer

The answer of The maximum output capability of a system,allowing...

Question 13

The first three rooms took a four-person crew a total of 9 hours to paint.If the learning curve rate is 85%,how long will it take them to paint all 20 rooms in stately Wayne manor?
A)less than 20 hours
B)between 20 and 30 hours
C)between 31 and 40 hours
D)more than 40 hours

Accepted Answer

The learning curve rate of 85% means each subsequent room takes 85% of the time of the previous one. The time decreases, but with 20 rooms, the cumulative time will exceed 40 hours.

Question 14

An example of a variable cost is:
A)a payment to your raw materials supplier.
B)a lease payment on a piece of equipment.
C)a mortgage payment on buildings.
D)a monthly licensing fee for a software package.

Accepted Answer

A payment to a raw materials supplier is an example of a variable cost. This is because the cost of raw materials will vary depending on the amount needed to produce the product.

Question 15

A subdivision is planned for forty houses,each with its own in-ground swimming pool.A contractor estimates it will take him 30 hours to build the first pool and that there is a 90% learning curve associated with this process.
-How long will it take to build the last pool?
A)27.2 hours
B)23.9 hours
C)20.5 hours
D)17.1 hours

Accepted Answer

The learning curve effect implies that each time the number of pools doubles, the time taken per pool reduces by 10%. Using the formula for the learning curve, Tn = T1 * n^(log(learning rate)/log(2)), where T1 is the time for the first pool, n is the pool number, and the learning rate is 0.9, we find that the time for the 40th pool is approximately 17.1 hours.

Question 16

Jimbo Elrod has obtained fixed and variable cost information for four potential locations for his professional wrestling school and summarized it in tabular form below.All values are in dollars.
 
-Jimbo plans to charge the same amount for tuition regardless of where he decides to establish his school.If he believes that 700 students will matriculate each year,which location will result in the lowest total cost?
A)Location A
B)Location B
C)Location C
D)Location D

Accepted Answer

To calculate the total cost, we add the fixed cost and the variable cost for each location. 
- For Location A: 50,000 + 200(700) = 150,000
- For Location B: 75,000 + 150(700) = 180,000
- For Location C: 100,000 + 125(700) = 162,500
- For Location D: 125,000 + 100(700) = 195,000

Thus, Location B has the lowest total cost of $180,000.

Question 17

Which of these factors typically does NOT impact capacity?
A)fixed cost
B)conformance quality
C)product variations
D)actions of supply chain partners

Accepted Answer

Fixed costs do not typically impact capacity as they are incurred regardless of the level of production or capacity utilization. Capacity is more directly affected by operational factors like quality, product variations, and supply chain actions.

Question 18

Wally's Filling Station is manned by one capable attendant that can fill your tank and check your tires,oil,and water in 5 minutes.If four customers arrive each hour,and the service and arrival rates are governed by the Poisson distribution,what is the utilization of the attendant?
A)0.33
B)0.50
C)0.66
D)0.80

Accepted Answer

The answer of Wally's Filling Station is manned by one...

Question 19

Four entrepreneurial students want to open a shaved ice business during the coming summer.Maxine thinks that demand will be high and therefore they should purchase a large stand and acquire a premium ice shaving machine.Minnie feels strongly that demand will be low and that they should purchase a tarp and some basic hand tools to work the ice.Midelia is pretty sure that demand will fall in-between these two extremes,so they can get by with a shack and a used ice shaving machine.Their financial wizard of the bunch,Probableah,has estimated the costs,revenues,and likelihoods of each level of demand and created the table shown below.What is the expected profit for this venture? 
A)$1700
B)$2300
C)$2900
D)$3300

Accepted Answer

The answer of Four entrepreneurial students want to open a...

Question 20

Which of the following statements about capacity strategies is NOT correct?
A)Lead capacity strategy can be used to preempt competitors who might be planning to expand their own capacity.
B)A lag capacity strategy tends to have greater productivity due to higher utilization levels.
C)A match capacity strategy tends to avoid periods of high under- or overutilization.
D)A lag capacity strategy would be well-suited for a period of high growth.

Accepted Answer

A lag capacity strategy is more cautious, increasing capacity only after demand has been demonstrated, which might not be well-suited for a period of high growth where not meeting demand could mean lost market share. Lead and match strategies are more proactive approaches to capacity planning in periods of growth.

Quiz 6: Managing Capacity

A company with fixed costs of $10,000 per month has a target price of $165 for their sole product,a heat shield for masonry fireplaces.What level of output represents their break-even point if their variable cost for producing is $35 per unit?

What is the break even point for location D if Jimbo decides to charge $21 per student?

A subdivision is planned for forty houses,each with its own in-ground swimming pool.A contractor estimates it will take him 30 hours to build the first pool and that there is a 90% learning curve associated with this process. -How long will it take to build all of the pools?

Consider the system composed of four processes linked by a conveyor belt.There is no storage between these processes pictured below.Which statement is BEST

A lead capacity strategy has the advantage of:

Which of the following statements about learning curves is BEST?

The average waiting time on a Thursday night for a table at a popular Chinese restaurant is 30 minutes.If customers arrive at the rate of four per hour and both the service and arrival rates are Poisson distributed,what is the average service time?

Business at the Kwik-E-Mart is brisk,with customers arriving at a rate of six per hour on average.Ringing up purchases is an easy matter for owner/operator Apu;he can usually do so in 2 minutes.If both arrival and service rates are Poisson distributed,how many customers are in the store on average?

Students arrive at a professor's office every 20 minutes during final exam week according to a Poisson distribution.What is the probability that the professor's one hour afternoon nap will not be disrupted by any student arrivals?

If a firm cannot make a profit regardless of output volume,then:

The maximum output capability of a system,allowing for no adjustments for scheduled or unscheduled maintenance is the ________.

The first three rooms took a four-person crew a total of 9 hours to paint.If the learning curve rate is 85%,how long will it take them to paint all 20 rooms in stately Wayne manor?

An example of a variable cost is:

A subdivision is planned for forty houses,each with its own in-ground swimming pool.A contractor estimates it will take him 30 hours to build the first pool and that there is a 90% learning curve associated with this process. -How long will it take to build the last pool?

Which of these factors typically does NOT impact capacity?

Wally's Filling Station is manned by one capable attendant that can fill your tank and check your tires,oil,and water in 5 minutes.If four customers arrive each hour,and the service and arrival rates are governed by the Poisson distribution,what is the utilization of the attendant?

Which of the following statements about capacity strategies is NOT correct?