WGU C720 Competency 4: Process Design, Capacity
Planning and Location Analysis Questions
5 Steps of Theory of Constraints Ans✓✓✓ - Identify the system's constraint
- Exploit the system's constraint
- Subordinate everything else to the above decision
- Elevate the system's constraint
- If constraint has been broken, go back to step 1. Do not allow inertia to cause a
system's constraint
Actual Output / Design Capacity = Ans✓✓✓ Capacity Utilization
Actual Output / Effective Capacity = Ans✓✓✓ Efficiency Rate
Actual Output Ans✓✓✓ total amount produced during a given time period
Capacity Ans✓✓✓ the measure of an organization's ability to sustainably provide
customers with the demanded services or goods in the amount requested and in
a timely manner, given current resources
Capacity Planning - Adjustment Ans✓✓✓ adds or reduce capacity in small or
large amounts as consumer demand changes; triggered by major changes to
process or system
Capacity Planning - Lag Ans✓✓✓ adds capacity only after an organization is
running at full capacity or is beyond due to increase in demand.
, Capacity Planning - Lead Ans✓✓✓ adds capacity with the anticipation of an
increase in demand. This strategy is considered aggressive and is primarily used in
an effort to obtain customers from competitors by reducing the amount of lead
time and improving service levels.
Capacity Planning - Match Ans✓✓✓ adds capacity in small incremental amounts
in response to changing demands in the market
Capacity Planning Ans✓✓✓ is needed to support customer demand and maintain
production capacity as demands for products change
Capacity Planning Strategies Ans✓✓✓ - Lead
- Lag
- Match
- Adjustment
Capacity Utilization Ans✓✓✓ is a metric, or measure used to determine how
much capacity is actually being used on an average basis
Design Capacity Ans✓✓✓ the maximum achievable output of a process or system
Economies of Scale Ans✓✓✓ the ability to produce more goods at a lower cost
by better utilizing the same fixed costs
Economies of Scope Ans✓✓✓ can be expressed as "economies of scale through
product line diversification." It implies building volume necessary to cover fixed
costs by producing a variety of products on the same equipment
Planning and Location Analysis Questions
5 Steps of Theory of Constraints Ans✓✓✓ - Identify the system's constraint
- Exploit the system's constraint
- Subordinate everything else to the above decision
- Elevate the system's constraint
- If constraint has been broken, go back to step 1. Do not allow inertia to cause a
system's constraint
Actual Output / Design Capacity = Ans✓✓✓ Capacity Utilization
Actual Output / Effective Capacity = Ans✓✓✓ Efficiency Rate
Actual Output Ans✓✓✓ total amount produced during a given time period
Capacity Ans✓✓✓ the measure of an organization's ability to sustainably provide
customers with the demanded services or goods in the amount requested and in
a timely manner, given current resources
Capacity Planning - Adjustment Ans✓✓✓ adds or reduce capacity in small or
large amounts as consumer demand changes; triggered by major changes to
process or system
Capacity Planning - Lag Ans✓✓✓ adds capacity only after an organization is
running at full capacity or is beyond due to increase in demand.
, Capacity Planning - Lead Ans✓✓✓ adds capacity with the anticipation of an
increase in demand. This strategy is considered aggressive and is primarily used in
an effort to obtain customers from competitors by reducing the amount of lead
time and improving service levels.
Capacity Planning - Match Ans✓✓✓ adds capacity in small incremental amounts
in response to changing demands in the market
Capacity Planning Ans✓✓✓ is needed to support customer demand and maintain
production capacity as demands for products change
Capacity Planning Strategies Ans✓✓✓ - Lead
- Lag
- Match
- Adjustment
Capacity Utilization Ans✓✓✓ is a metric, or measure used to determine how
much capacity is actually being used on an average basis
Design Capacity Ans✓✓✓ the maximum achievable output of a process or system
Economies of Scale Ans✓✓✓ the ability to produce more goods at a lower cost
by better utilizing the same fixed costs
Economies of Scope Ans✓✓✓ can be expressed as "economies of scale through
product line diversification." It implies building volume necessary to cover fixed
costs by producing a variety of products on the same equipment
