OPMA 3306 CHAPTER 4 CONCEPTUAL QUESTIONS FROM HOMEWORK UTA OPERATIONS
MANAGEMENT STUDY GUIDE 2026/2027 | CAPACITY MANAGEMENT REVIEW
Overtime and personnel transfers are solutions to capacity problems in the intermediate term. -
ANS ✔✔False
Capacity planning is generally viewed in three time durations: Immediate, Intermediate, and
Indeterminate. - ANS ✔✔False
The problem of keeping demand sufficiently high to keep a large factory busy is a sales issue and
not a diseconomy of scale. - ANS ✔✔False
The ultimate in plant flexibility is a one-hour-changeover time plant. - ANS ✔✔False, zero-hour-
changeover
Because services cannot be stored for later use, service managers consider time as one of their
supplies or resources. - ANS ✔✔True
If the best operating level of a piece of equipment is at a rate of 400 units per hour and the
actual output during an hour is 300 units, which of the following is the capacity cushion? - ANS
✔✔100 units per hour
Capacity Cushion = Potential Output - Actual Output = 400-300 = 100
A manufacturing shop is designed to operate most efficiently at an output of 860 units per day.
In the past month, the plant averaged 690 units per day.What was its capacity utilization rate
last month? - ANS ✔✔80.2%
Capacity Utilization Rate = (Actual Output / Potential Output) X 100 = (690/860) X 100 = 80.2%
A company has a factory that is designed so that it is most efficient (average unit cost is
minimized) when producing 18,300 units of output each month. However, it has an absolute
MANAGEMENT STUDY GUIDE 2026/2027 | CAPACITY MANAGEMENT REVIEW
Overtime and personnel transfers are solutions to capacity problems in the intermediate term. -
ANS ✔✔False
Capacity planning is generally viewed in three time durations: Immediate, Intermediate, and
Indeterminate. - ANS ✔✔False
The problem of keeping demand sufficiently high to keep a large factory busy is a sales issue and
not a diseconomy of scale. - ANS ✔✔False
The ultimate in plant flexibility is a one-hour-changeover time plant. - ANS ✔✔False, zero-hour-
changeover
Because services cannot be stored for later use, service managers consider time as one of their
supplies or resources. - ANS ✔✔True
If the best operating level of a piece of equipment is at a rate of 400 units per hour and the
actual output during an hour is 300 units, which of the following is the capacity cushion? - ANS
✔✔100 units per hour
Capacity Cushion = Potential Output - Actual Output = 400-300 = 100
A manufacturing shop is designed to operate most efficiently at an output of 860 units per day.
In the past month, the plant averaged 690 units per day.What was its capacity utilization rate
last month? - ANS ✔✔80.2%
Capacity Utilization Rate = (Actual Output / Potential Output) X 100 = (690/860) X 100 = 80.2%
A company has a factory that is designed so that it is most efficient (average unit cost is
minimized) when producing 18,300 units of output each month. However, it has an absolute
