OMGT Final Exam Quiz 3 Study Guide | Operations Management Review, Key Concepts &
Practice Questions
____________ is the capability of a worker, machine, work center, plant, or organization to
produce output per time period. - correct answer ✔✔Capacity
True or False: In general, higher conformance quality reduces capacity since the extra care taken
during production slows the output rate. - correct answer ✔✔False
True or False: A firm is able to meet current demand. If it adopts a lead capacity strategy, then it
is probably making the assumption that demand will increase in the future. - correct answer
✔✔True
True or False: The break-even formula does not include a provision for a price break if a
customer Purchases a large quantity. - correct answer ✔✔True
A bottling machine has a theoretical capacity of 100 bottles per minute. During every ten hour
shift it operates continuously but is shut down once for 30 minutes for cleaning, inspection, and
lubrication. What is its rated capacity? - correct answer ✔✔60 min x 10 hrs = 600 min - 30 min
for cleaning = 570 min x 100 bottles per min = 5700 bottles / 600 min = 95 bottles
Which of the following is NOT an appropriate measure of capacity?
- Number of cars assembled per month
- Thickness of laminate on a desktop
- Square yards of carpet installed per hour
- Printed pages per minute - correct answer ✔✔Thickness of laminate on a desktop
A lead capacity strategy has the advantage of:
- A reduced risk of overbuilding
Practice Questions
____________ is the capability of a worker, machine, work center, plant, or organization to
produce output per time period. - correct answer ✔✔Capacity
True or False: In general, higher conformance quality reduces capacity since the extra care taken
during production slows the output rate. - correct answer ✔✔False
True or False: A firm is able to meet current demand. If it adopts a lead capacity strategy, then it
is probably making the assumption that demand will increase in the future. - correct answer
✔✔True
True or False: The break-even formula does not include a provision for a price break if a
customer Purchases a large quantity. - correct answer ✔✔True
A bottling machine has a theoretical capacity of 100 bottles per minute. During every ten hour
shift it operates continuously but is shut down once for 30 minutes for cleaning, inspection, and
lubrication. What is its rated capacity? - correct answer ✔✔60 min x 10 hrs = 600 min - 30 min
for cleaning = 570 min x 100 bottles per min = 5700 bottles / 600 min = 95 bottles
Which of the following is NOT an appropriate measure of capacity?
- Number of cars assembled per month
- Thickness of laminate on a desktop
- Square yards of carpet installed per hour
- Printed pages per minute - correct answer ✔✔Thickness of laminate on a desktop
A lead capacity strategy has the advantage of:
- A reduced risk of overbuilding
