MGSC 395 Exam 2 | Questions & 100% Correct Answers (Verified) | Latest Update | Grade A+
Capacity : The max rate of output of a process or system What do long-term capacity plans involve? : Investments in new facilities and equip at the organizational level, and require top mgmt participation and approval bc they are not easily reversed When choosing a capacity strategy, what do managers need to consider? : How much of a cushion is needed for variable demand & should we expand capacity ahead of demand or wait until demand is more certain 2 ways capacity can be expressed : 1. output measures 2. input measures When are output measures of capacity best utilized? 2 | P a g e : When applied to individual processes within the firm or when the firm provides a relatively small number of standardized services or products When are input measures of capacity best utilized? : Low volume, flexible processes What is the problem w/ input measures? : Demand is invariably expressed as an output rate Utilzation : The degree to which a resource such as equipment, space, or the workforce is currently being used Utilization formula : U= Average output rate / Max capacity * 100% Deciding on the best level of capacity involves consideration for the __ of ___ : Efficiency of operations Economies of scal
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