BUS 370 EXAM 2 UPDATED ACTUAL QUESTIONS AND
CORRECT ANSWERS
Question:
1. capacity
Answer:
the capability of a worker, machine, work center, plant or organization to produce
output per time period
Question:
2. measures of capacity
Answer:
in terms of inputs, outputs, or a combo
ex: jiffy lube=oil changes per hour
law firm=billable hours
college= student hours per semester
Question:
3. theoretical capacity
Answer:
the max output capability, allowing for no adjustments for preventive maintenance
or unplanned downtime
Question:
4. rated capacity
Answer:
the long-term, expected output capability of a resource or system
Question:
5. lead capacity strategy
Answer:
a capacity strategy in which capacity is added in anticipation of BEFORE demand
Question:
6. lag capacity strategy
Answer:
a capacity strategy in which capacity is added only AFTER demand has
materialized
typically a good strategy for mature, cost sensitive products and services
, Question:
7. methods of evaluating capacity alternatives
Answer:
fixed & variable costs
indifference point
break even point
expected value
decision tree
Question:
8. total cost
Answer:
FC + VC(units)
Question:
9. indifference point
Answer:
the output level at which 2 capacity alternatives generate equal cost
Question:
10. expected value
Answer:
a calculation that summarizes the expected costs, revenues, or profits of a
capacity alternative based on several demand levels, each of which has a different
probability
step 1: calculate total cost
step 2: calculate expected value
Question:
11. decision tree
Answer:
a visual tool that decision makers use to evaluate capacity decisions to enable
users to see the interrelationships between decisions and possible outcomes
CORRECT ANSWERS
Question:
1. capacity
Answer:
the capability of a worker, machine, work center, plant or organization to produce
output per time period
Question:
2. measures of capacity
Answer:
in terms of inputs, outputs, or a combo
ex: jiffy lube=oil changes per hour
law firm=billable hours
college= student hours per semester
Question:
3. theoretical capacity
Answer:
the max output capability, allowing for no adjustments for preventive maintenance
or unplanned downtime
Question:
4. rated capacity
Answer:
the long-term, expected output capability of a resource or system
Question:
5. lead capacity strategy
Answer:
a capacity strategy in which capacity is added in anticipation of BEFORE demand
Question:
6. lag capacity strategy
Answer:
a capacity strategy in which capacity is added only AFTER demand has
materialized
typically a good strategy for mature, cost sensitive products and services
, Question:
7. methods of evaluating capacity alternatives
Answer:
fixed & variable costs
indifference point
break even point
expected value
decision tree
Question:
8. total cost
Answer:
FC + VC(units)
Question:
9. indifference point
Answer:
the output level at which 2 capacity alternatives generate equal cost
Question:
10. expected value
Answer:
a calculation that summarizes the expected costs, revenues, or profits of a
capacity alternative based on several demand levels, each of which has a different
probability
step 1: calculate total cost
step 2: calculate expected value
Question:
11. decision tree
Answer:
a visual tool that decision makers use to evaluate capacity decisions to enable
users to see the interrelationships between decisions and possible outcomes
