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(Solved): Bus 384: Test 10 Submitted 18 Jun...

Bus 384: Test 10

Submitted 18 Jun


Which of the following statements is true of a work order? 

  • a. It is also called the capacity cushion.     
  • b. It includes processing requirements for a type of work.    
  • c. It cannot be defined for services.     
  • d. It does not include resources needed for a type of work.

Avexim Pharmaceutical Laboratories is an international group of companies that manufactures an antiepileptic prescription drug in huge volumes. The setup time for manufacturing the drug is 75 minutes, the processing time is 8 minutes, and the order size is 700 units. In this case, which of the following is the total time required to meet the given production volume? 

  • a. 968 minutes     
  • b. 1300 minutes   
  • c. 4275 minutes   
  • d. 5675 minutes

Greyon Spinning Mills Inc. owns 600 spinning machines. Out of these, only 500 are used in a given year. Given this information, the utilization of spinning machines at Greyon Spinning Mills Inc. is _____. 

  • a. 0.75     
  • b. 0.83     
  • c. 1     
  • d. 1.2

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.

  •  a. capacity lead strategy     
  • b. capacity reduction strategy     
  • c. capacity straddle strategy     
  • d. capacity lag strategy

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

  • a. Varying the price of goods or services     
  • b. Adding peripheral goods and/or services
  • c. Providing reservations     
  • d. Shifting work to slack periods    

Which of the following is a way to manage capacity by shifting and stimulating demand? 

  • a. Adding peripheral goods and/or services     
  • b. Adding or sharing equipment     
  • c. Changing labor schedules    
  • d. Changing labor skill mix

In a revenue management system, forecasting, allocation, overbooking, and pricing must work in unison if the objective is to:

  •  a. manage a nonperishable asset.    
  •  b. meet the future demand of goods and services.    
  •  c. determine the single price that needs to be charged to all customers.    
  •  d. maximize the revenue generated by a perishable asset.

A doctor's office charges no-show patients $30 if they do not cancel their appointment 24 hours prior to the appointment. In this scenario, which of the following can be used by the doctor's office to handle the risk of idle service capacity?

  •  a. A capacity straddle strategy    
  •  b. A capacity lag strategy    
  •  c. A revenue management system    
  •  d. A pull system

Magnira Hotels is a leading chain of hotels. Its managers reserve 30% of the rooms available only to the members of its club. They also provide the rooms at subsidized prices to these members. In this scenario, which of the following components of revenue management system is most likely used by Magnira Hotels?

  •  a. Investment    
  •  b. Allocation    
  •  c. Capacity expansion    
  •  d. Capacity sharing

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 _____.

  •  a. physical constraints    
  •  b. nonphysical constraints    
  •  c. bottleneck activities    
  •  d. work orders


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

  •  a. idle time is acceptable if there is no work to do    
  •  b. an hour lost at a nonbottleneck resource is an hour lost for the entire process or factory output    
  •  c. large order sizes should be used to minimize setup time and maximize resource utilization    
  •  d. the input should always exceed the capacity

Long-term capacity decisions usually involve adjusting schedules or staffing levels.

  •   a. True
  •   b. False

Diseconomies of scale are known as the capacity cushion.

  •   a. True
  •   b. False

A work order is a specification of work to be performed for a customer or a client.

  •   a. True
  •   b. False

Offering complementary goods or services is an example of a short-term capacity strategy.

  •   a. True
  •   b. False

The ideas and methods surrounding a revenue management system are often called yield management.

  •   a. True
  •   b. False

The Theory of Constraints focuses on eliminating all bottleneck activities in a process.

  •   a. True
  •   b. False

______   ____________    are achieved when the average unit cost of a good or service decreases as the capacity and/or volume of throughput increases.
A ____    matches capacity additions with demand as closely as possible.
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.

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