MGSC 395 Exam 2 | UPDATED Questions with 100% Verified Answers
Question:
Utilization
Answer:
The degree to which equipment,space, or labor is being used
Question:
Economies of Scale
Answer:
average unit cost of a service or good can be reduced by increasing its output rate
Question:
Diseconomies of Scale
Answer:
Occurs when the average cost perunit increases as the facility's sizeincreases
Question:
Measures of Utilization
Answer:
■■■■■■■■■■■ = ■■■■■■■ ■■■■■■ ■■■■/■■■■■■■ ■■■■■■■■ × ■■■%•
The utilization rate indicates the need for adding extracapacity or eliminating unneeded
capacity.•
Maximum capacity is the greatest level of output that aprocess can reasonably sustain for
a longer period
Question:
Economies of scale can drive cost down by
Answer:
Spreading fixed costs
Reducing construction costs
Cutting costs of purchased material
Finding process advantages
, Question:
Diseconomies of scale raises the average unit cost due to
Answer:
Complexity
Loss of Focus
Inefficiencies
Question:
Chart View of Economies & Diseconomies of Scale
Answer:
The transition from economies of scale to diseconomies of scale contains the point at
which average unit costs are at their lowest.
Question:
Expansionist Strategy
Answer:
Stays ahead of demand and can preempt the expansion of other firms
Question:
Sizing Capacity Cushions
Answer:
It measures the amount by which the average utilization (in terms of total capacity) falls
below 100 percent. Capacity cushion = 100% − Average Utilization rate (%)
The appropriate size cushion varies by industry. Large cushions when demand varies or is
uncertain• Small cushions for capital-intensive industries
Question:
Capacity Requirements
Answer:
What a process' capacity should be for some future time period to meet the demand of
customers, given the firm's desired capacity cushion.
Question:
Question:
Utilization
Answer:
The degree to which equipment,space, or labor is being used
Question:
Economies of Scale
Answer:
average unit cost of a service or good can be reduced by increasing its output rate
Question:
Diseconomies of Scale
Answer:
Occurs when the average cost perunit increases as the facility's sizeincreases
Question:
Measures of Utilization
Answer:
■■■■■■■■■■■ = ■■■■■■■ ■■■■■■ ■■■■/■■■■■■■ ■■■■■■■■ × ■■■%•
The utilization rate indicates the need for adding extracapacity or eliminating unneeded
capacity.•
Maximum capacity is the greatest level of output that aprocess can reasonably sustain for
a longer period
Question:
Economies of scale can drive cost down by
Answer:
Spreading fixed costs
Reducing construction costs
Cutting costs of purchased material
Finding process advantages
, Question:
Diseconomies of scale raises the average unit cost due to
Answer:
Complexity
Loss of Focus
Inefficiencies
Question:
Chart View of Economies & Diseconomies of Scale
Answer:
The transition from economies of scale to diseconomies of scale contains the point at
which average unit costs are at their lowest.
Question:
Expansionist Strategy
Answer:
Stays ahead of demand and can preempt the expansion of other firms
Question:
Sizing Capacity Cushions
Answer:
It measures the amount by which the average utilization (in terms of total capacity) falls
below 100 percent. Capacity cushion = 100% − Average Utilization rate (%)
The appropriate size cushion varies by industry. Large cushions when demand varies or is
uncertain• Small cushions for capital-intensive industries
Question:
Capacity Requirements
Answer:
What a process' capacity should be for some future time period to meet the demand of
customers, given the firm's desired capacity cushion.
Question:
