OPMA 3306 EXAM 2 CHAPTER 4 6 8 UTA OPERATIONS MANAGEMENT QUESTIONS AND
ANSWERS STUDY GUIDE 2026/2027 | TEST 2 REVIEW
Capacity has a time dimensional aspect for operations and supply chain management. A
manager must consider capacity planning in how many time durations? - ANS ✔✔Three time
durations
Long range:
_____ than _____ _____. - ANS ✔✔Greater
one year
Intermediate range
The _____ _____ to _____ _____. - ANS ✔✔next 6
18 months
Short range
_____ than _____ _____. - ANS ✔✔Less
1 month
Strategic capacity planning involves:
c_____ a_____.
i_____ the f_____'s c_____ s_____.
_____ p_____. - ANS ✔✔capital-intensive acquisitions.
impacting
firm's cost structure.
long-term production.
,The output level where average unit cost is minimized is known as the - ANS ✔✔best operating
level.
The equation, Capacity used / Best operating level, represents ____________. - ANS
✔✔capacity utilization rate
In operations management, capacity must be stated relative to - ANS ✔✔a period of time.
Which of the following contribute to the development of economies of scale?
Higher capacity equipment typically has lower per unit costs.
Higher capacity equipment often requires more maintenance support.
Higher production volumes can often be achieved without additional support personnel.
Keeping high capacity equipment busy may require price discounting. - ANS ✔✔Higher capacity
equipment typically has lower per unit costs.
Higher production volumes can often be achieved without additional support personnel.
Planning for the next week is referred to as - ANS ✔✔short range capacity management.
True or false: When plant production becomes too small, diseconomies of scale may occur. -
ANS ✔✔False
The ability to hold, receive, store, or accommodate describes - ANS ✔✔capacity.
______ is the output that a system is capable of achieving over a period of time. - ANS
✔✔Capacity
,A facility designed around a limited set of production objectives is called a - ANS ✔✔focused
factory.
The capacity utilization rate is expressed as a - ANS ✔✔percentage
Capacity flexibility is achieved by using
______ ______
______ ______
______ ______ - ANS ✔✔flexible workers.
flexible processes.
flexible plants.
The idea that as a plant volume increases, the average cost per unit drops is known as - ANS
✔✔economies of scale.
True or false: Economies of scope can be achieved when a company focuses on a single product.
- ANS ✔✔False
The two types of costs to consider when adding capacity are
the c_____ of u_____ _____ f_____.
the c_____ of u_____ _____ i_____. - ANS ✔✔cost
upgrading too frequently.
cost
upgrading too infrequently.
, True or false: When the size of a plant becomes too large, diseconomies of scale become a
problem. - ANS ✔✔True
A production manager may p_____ b_____ i_____ to prevent bottlenecks and ensure
employees always have work to do. - ANS ✔✔produce buffer inventories
Which of the following can be used to operationalize the focused factory concept? - ANS
✔✔Plant within a plant
What are the two strategies an organization can use when adding in-house capacity is not cost
effective? - ANS ✔✔Outsourcing or shared capacity.
The ability to rapidly increase or decrease production levels, or shift from one product or service
to another is known as - ANS ✔✔capacity flexibility.
Capacity in excess of expected demand is known as - ANS ✔✔capacity cushion
The idea that multiple products can be combined and produced at one facility at a lower cost
than they can be produced separately is known as - ANS ✔✔economies of scope.
When building a decision tree, one should use squares to represent which of the following? -
ANS ✔✔Decision points
Which of the following are important issues to consider when changing capacity?
Ensuring economies of scale
Maintaining system balance
Use of external capacity
ANSWERS STUDY GUIDE 2026/2027 | TEST 2 REVIEW
Capacity has a time dimensional aspect for operations and supply chain management. A
manager must consider capacity planning in how many time durations? - ANS ✔✔Three time
durations
Long range:
_____ than _____ _____. - ANS ✔✔Greater
one year
Intermediate range
The _____ _____ to _____ _____. - ANS ✔✔next 6
18 months
Short range
_____ than _____ _____. - ANS ✔✔Less
1 month
Strategic capacity planning involves:
c_____ a_____.
i_____ the f_____'s c_____ s_____.
_____ p_____. - ANS ✔✔capital-intensive acquisitions.
impacting
firm's cost structure.
long-term production.
,The output level where average unit cost is minimized is known as the - ANS ✔✔best operating
level.
The equation, Capacity used / Best operating level, represents ____________. - ANS
✔✔capacity utilization rate
In operations management, capacity must be stated relative to - ANS ✔✔a period of time.
Which of the following contribute to the development of economies of scale?
Higher capacity equipment typically has lower per unit costs.
Higher capacity equipment often requires more maintenance support.
Higher production volumes can often be achieved without additional support personnel.
Keeping high capacity equipment busy may require price discounting. - ANS ✔✔Higher capacity
equipment typically has lower per unit costs.
Higher production volumes can often be achieved without additional support personnel.
Planning for the next week is referred to as - ANS ✔✔short range capacity management.
True or false: When plant production becomes too small, diseconomies of scale may occur. -
ANS ✔✔False
The ability to hold, receive, store, or accommodate describes - ANS ✔✔capacity.
______ is the output that a system is capable of achieving over a period of time. - ANS
✔✔Capacity
,A facility designed around a limited set of production objectives is called a - ANS ✔✔focused
factory.
The capacity utilization rate is expressed as a - ANS ✔✔percentage
Capacity flexibility is achieved by using
______ ______
______ ______
______ ______ - ANS ✔✔flexible workers.
flexible processes.
flexible plants.
The idea that as a plant volume increases, the average cost per unit drops is known as - ANS
✔✔economies of scale.
True or false: Economies of scope can be achieved when a company focuses on a single product.
- ANS ✔✔False
The two types of costs to consider when adding capacity are
the c_____ of u_____ _____ f_____.
the c_____ of u_____ _____ i_____. - ANS ✔✔cost
upgrading too frequently.
cost
upgrading too infrequently.
, True or false: When the size of a plant becomes too large, diseconomies of scale become a
problem. - ANS ✔✔True
A production manager may p_____ b_____ i_____ to prevent bottlenecks and ensure
employees always have work to do. - ANS ✔✔produce buffer inventories
Which of the following can be used to operationalize the focused factory concept? - ANS
✔✔Plant within a plant
What are the two strategies an organization can use when adding in-house capacity is not cost
effective? - ANS ✔✔Outsourcing or shared capacity.
The ability to rapidly increase or decrease production levels, or shift from one product or service
to another is known as - ANS ✔✔capacity flexibility.
Capacity in excess of expected demand is known as - ANS ✔✔capacity cushion
The idea that multiple products can be combined and produced at one facility at a lower cost
than they can be produced separately is known as - ANS ✔✔economies of scope.
When building a decision tree, one should use squares to represent which of the following? -
ANS ✔✔Decision points
Which of the following are important issues to consider when changing capacity?
Ensuring economies of scale
Maintaining system balance
Use of external capacity
