A loan processing operation that processes an average of 3 loans per day. d. unemployment is very low. 5. When capacity is inadequate, customers can be lost. As pizza, topped with barbecue chicken, became popular at specialty restaurants, Pizza Hut and Papa John's introduced a similar pizza. C. practical capacity. In a 4-week period, it actually worked 355 hours and produced 475 standard hours of work. When fixed costs are high, one production facility will be favored. The beer facility has a system efficiency of 90 percent, and the utilization is 80 percent. Th, A certain company uses a single raw material in its production process. The actual price per pound of material is $78; the standard. Its effective capacity however is 88 repairs per day, and its actual output is 56 repairs per day. Long-term capacity decisions that confront managers include all of the following except: a. workforce size b. capital c. equipment. What. d. tends to Wonder Women Cosmetics currently has $21,900 in sales and is operating at 45% of the firm's capacity. Some impacts vary based on the energy resourcefor example, whether the power plant uses fossil fuel or a renewable resource. What is its expected output per week? \\ A) available capacity B) calculated workloads for other work centers C) the cost of exp Stating capacity in dollar amounts generally results in a consistent measure of capacity. The capacity is 0.4 unit per minut You observe a long line at C&A Bakery with customers leaving every 4 minutes. Your choice strategy is to only predict your action based on what actions they took in the past. United Industries manufactures a number of products at its highly automated factory. A loan processing operation that processes an average of 2 loans per day. Each cell has a design capacity of 250 units per day and an effective capacity of 230 units per day. If the price of capital is $120 per capital and the price of labour is $30, Economies of scale occur when {Blank}. Reid will be driving through Spain this summer. Decreases customer response times After evaluating Null Company's manufacturing process, management decides to establish standards of 2 hours of direct labor per unit of product and $15.70 per hour for the labor rate. July Aug. Sept. Oct. Nov. Dec. Retail demand 800 300 450 450 600 600 Dealer demand 600 750 900 1,050 1,200 1,3 How can firms make use of excess capacity? B. production of the 100th unit, For a certain firm, the 100th unit of output that the firm produces has a marginal revenue of $10 and a marginal cost of $7. This imitation illustrates: a. invention. Excess capacity arises when firms cannot sell all of their output at the current market price. b. manufacturing can be more labor-intensive. -most of the activities can be grouped into 4 business functions He did some research and knows that the average price of gas in Spain is approximately 1.21 euros per liter. Horizontal Integration v. Forward Integration. Location, Location, Location: Where Do We Make It? Each backpack has a gross profit of $40, a holding cost of $10, and a shortage cost of $15. The extent to which products and services are delivered at low cost, Which company sets the price in the market place? One production facility will usually be favored when a. unemployment is very low b. demand is higher than the minimum efficient scale c. fixed costs are high d. good have a low value-to-weight ratio This problem has been solved! product (or assembly-line) layout The company did not maintain any inventories, so total cos, Imagine comparing a manufacturing operation using regular lot-sizing and the same operation with a kanban/lean production approach. A manufacturer of a printed circuit boards has a design capacity of 1000 boards per day. These power plants are subject to economic, reliability, and environmental regulations by federal, tribal, state, and/or local governments. collection of computer hardware and software arranged to transmit information from one place to another, the linking of separate networks into an interconnected network, where each network retains its own identity, Enterprise resource planning (ERP) systems, software packages designed to integrate the majority of a firm's business processes, execute all transactions related to the firm's business processes being integrated, store each piece of data only once in an enterprise-wide database, allow access to data and information in real time, and operate in a client-server environment, traditional or web-based, - store all info in a single database Time spent in labor rooms varies from An aircraft manufacturer is developing a preliminary cost estimate for building a 300 MW fossil-fuel powerplant. Q = A f (1, K) = 30L + 6L^2 - 0.10L^3 (a) Is this a short run or a long run production function? C) below normal economic performance. Both items are produced at Work Center 101. The company has a lower specification limit of 23 mm and an upper specification limit of 23.6 mm. All of these facilities operate around the clock. What is its utilization if it processes an average of 45 loans per day? B any machine can be used if available ? The Megabuck Hospital Corp. is to build a state-subsidized nursing home catering to homeless patients as well as high-income patients. Calculate the max 1. Your assembly line with 12 tasks is to be balanced. Concerns regarding the visibility of all aspects of supply chains and the traceability of materials along supply chains were focused upon. A furnace repair team services an average of 10 furnaces a day. Air pollution from burning fuel often includes carbon dioxide, sulfur dioxide, nitrogen oxides, mercury, and particulate matter. Each machine requires two operators. After the incineration process is complete, the total mass of the remaining garbage can be reduced by up to 85 percent, while its volume may shrink by as much as 95 percent [5].. 6. C ? The company has an annual production rate of 292,000 units. The East Midvale Textile Company produces denim and brushed-cotton cloth. The average daily demand for component B is 750 units. In mushroom production, the principal pests are flies, mites, and . b. (a) constant returns of scale (b) economies of scale (c) diseconomies of scale (d) minimum efficient scale. 100,000 shares are maintained as treasury stock and 1,400,000 shares are currently in circulation. Improving . 11.One production facility will usually be favored when a. b. demand is higher than the minimum efficient scale. AssetsLiabilitiesBeginningoftheyear$60,000$20,000Endoftheyear105,00036,000\begin{matrix} d. None of the above. E) Output falls below minimum marginal costs. Production Facility - an overview | ScienceDirect Topics 2. minimum efficient scale and it comparison to demand, as volume increases, unit costs decreases due to economies of scale As volume increases, unit costs decrease due to economies of scale and scope and learning curve effects. A minor fender bender will cost $2,000, whereas a major accident might cost $16,000 in repairs. Assume also that the marginal physical product of the last unit of capital is 3, If there are external costs of production and firms do not have to account for these costs, then the firms will _______ and _______ compared with the efficient values. What should be the properties of the combination of chemicals and labor that minimizes production costs? The production budget for year 1 was based on 200,000 units of output. D. t Last year National Aeronautics had a FA/Sales ratio of 40%, comprised of $250 million of sales and $100 million of fixed assets. Maximizes flexibility by allocating orders among the suppliers in a dynamic way This firm is producing in the short run (remember that, A firm's production function is y=100KL where y is the output level, K is the level of capital and L is the level of labour. The effective capacity is 40 engines per day. e. a company is extremely profitable. Determine the monthly breakeven volume. Twisted nitinol-wire eyeglass framed unbend at room temperatures. One production facility will usually be favored when a. a company is extremely profitable. Risk of relying upon suppliers on important production process dimensions such as quality, delivery, and cost In a job shop, effective capacity is only 62 percent of design capacity, and actual capacity is 74 percent of effective output. C) A large and growth-oriented corporation has more clout and influence. Why? The firm operate, A firm produces a product with labor and capital as inputs, with the production function Q = LK, Let w= 1 ad r=1 be the prices of labor and capital, respectively. Determine the term being described or defined by the following statement: The difference between resources used and resources supplied. (a) a company is extremely profitable (b) demand is higher than the minimum efficient scale (c) unemployment is very low (d) fixed. A loan processing operation that processes an average of 6 loans per day. Suppose the firm can hire at a wage of $40 per hour and output can be sold at $10 per unit. b. tends to increase the unemployment rate. process layout A facility arrangement in which work flows according to the production process. The longest task is 2.4 minutes, and the total time for all tasks is 18 minutes. Long-range capacity planning should be the responsibility of: a. analysts b. middle management c. top management d. marketing management. - The best run companies usually have the best supply chain. Final Flashcards | Quizlet Allow access to data and information in real time (a) include staffing and scheduling (b) include inventory control (c) include defining product specifications (d) None of the above. Current sales are $640,000. Problem 5-1 Determine the utilization and the efficiency for each of these situations: a. What is the capacity (in customers per hour) of the bakery? Three sub-facilities are used 1) How does capacity utilization influence the intensity of rivalry? Large international firms deal in considerable volumes of goods and often must obtain a(n) _____ from a group of banks known as a syndicate.. a.call option b.commercial loan c.open account, What is chapter 7 about? 8. If the price of capital is $120 per day and the price of labor is $30 per day, what is the minimum cost of producing 1000 units of output? What are the advantages and disadvantages of incremental versus one-step expansion? 5. Product B only visits machines 1 and 3. Its effective capacity, however, is 64 repairs per day, and its actual output is 62 repairs per day. e. goods have a low value-to-weight ratio. Centralized generation facilities include fossil-fuel-fired power plants, nuclear power plants, hydroelectric dams, wind farms, and more. If storing products in a warehouse is generally considered negative since it reduces profits by increasing inventory carrying costs, why is the number and size of warehouses increasing in the United States? The forecasted demand for fudge for the next four months is 220,150,110, and 70 pounds. All rights reserved. Which of the following would be one of his responsibilities? 2) How does capacity utilization influence the extent of entry barriers? Job costing b. What are some capacity measures for each of follow a. university b.hospital c.computer d.farm. A corporation had the following assets and liabilities at the beginning and end of this year. d. Dividends were $1,250 cash per month, and the owner invested an additional$35,000 cash in exchange for common stock. component production facilities and raw materials are important considerations. The process currently is: a) Capacity constrained b) Demand constrained c) Unconstrained d) Linearly constrained. 2. It costs Garner Company $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for $35. In light of the statement, explain why capacity planning decision is important. Assume that the repetitive process of production line-1 of the company operates 16 hours per day with a cycle time of 2 minutes; while production line-2 operates 8 hours per day with cycle time of What is the maximum utilization a resource can achieve? True or false? The standard quantity requ, Supose the marginal product of labor is currently equal to its average product. a. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. The fatigue data for a steel is given below: |Stress Amplitude (MPa)|470|440|390|350|310|290|290|290 |Cycles to Failure|1x10^4|1x10^4|1x10^5|1x10^5|1x10^6|1x10^6|1x10^7|1x10^8 a. All rights reserved. the price of labor input) and r is, 1. Buying from suppliers could tempt suppliers into becoming direct competitors Chapter 13: Global Operations and Supply Chain Management - Quizlet Which of the following is a correct statement? Create an account to browse all assetstoday. The electricity generated by centralized generation is distributed through the electric power grid to multiple end-users. 2. chantyreys. 1. procurement Sample 1 Sample 2. Organizations have four approaches for capacity expansion. What scale of production minimises the ray average costs? It has received a huge order to supply water for a five-day convention that is taking place in the city. The production function for a product is given by Q = 100KL. Owner made no investments in the business, and no dividends were paid during the year. 20 terms. Createyouraccount. You decide to start a company that makes and sells backpacks. c. There is no maximum utilization. The Albert Nock Company had $210 million of sales last year, and $(A) million of fixed assets which were being operated at 0.75% of capacity. - Another consideration is the notion of the minimum efficient scale and its comparison to demand. The direct materials requirement per unit is 2 ounces. and services in-house, All activities associated with the flow and transformation of goods and services from the raw material stage to the end user, together with the corresponding flows of monetary funds and information Production Facilities means any storage, separation, treating, dehydration, artificial lift, power supply, compression, pumping, metering, monitoring, flowline, and other equipment directly associated with oil wells, gas wells or injection wells, prior to any processing plant or refinery. Match each of the following items with one or more of the denominator-level capacity concepts by putting the appropriate letter(s) by each item: |a. Do what produces the greatest good. If variable manufacturing overhead is applied to production based on direct labor hours and the direct labor efficiency is unfavorable, will the variable overhead efficiency variance be favorable or unfavorable, or could it be either? The machine can pack 500 units on $200 cost. It follows that the: A. production of the 100th unit of output increases the firm's profit by $1. (x4x)dx. A shift is 8 hours long, and the average patient requires 20 minutes in the exam room. a. A .gov website belongs to an official government organization in the United States. In small countries, or in municipalities where landfills are full and . units produced) $65,000 Total b, A low price leader would typically have: a) higher initial engineering and design costs b) higher worker skills and complex scheduling c) flexible production and extra capacity d) high volume with little or no variation, standardized work, A firm produces output, y, by using capital k and labor L, according to the production function : y = k^a.L^b. & \text{Assets} & \text{Liabilities }\\ The operation has a design capacity of 10 lo A firm is said to have excess capacity when: 1. it produces a level of output such that marginal revenue equals price. the integration and coordination of global supply chains would not be possible without information technologies such as the Internet and enterprise resource planning systems. a. As new opportunities appear around the world, sometimes it will become desirable for a company to relocate a production facility, all the activities associated with the flow and transformation of products from raw materials stage through to the end user, together with the corresponding flows of monetary funds and info; These activities are typically performed by different business organizations identified as suppliers, manufacturers, distributors, and retailers. The idea behind preventive maintenance is that the worst condition a machine should ever be in is on the day it is purchased. The environmental impacts of electricity generation can contribute to large-scale regional environmental concerns as well as localized concerns that affect the area directly surrounding a power plant. d. a company is extremely profitable. c. service is less profitable than manufacturing. Theoretical capacity |b. Many companies partake in the process of capacity and facilities planning to meet a greater demand. Kees Bridal Fashions generally orders more dresses than it thinks it will sell so that it can handle an unexpected large volume of business, should it occur. - "internal suppliers" may not have the incentive to improve their product since they do not face competition. The Advantages of Decentralized Manufacturing - Chron Derive the cost-minimizing quantities of labor and capital. In a job shop, effective capacity is only 72% of design capacity and actual output is 84% of effective output. Briefly describe three strategies for expanding capacity. When capacity is inadequate, market share can shrink. Determine the utilization and the efficiency for each of these situations: a. Unit cost is $55.75. What is the design ut Tom Swift, master scheduler at Curry Manufacturing Company, prepared the following master production schedule for one of the firm's major end products, the Kashmir Spice Pump. A computer repair service has a design capacity of 80 repairs per day. Normal costing c. Operations costing d. Proce, Suppose Camp Enterprises produces tents and faces wages in the labor market of $15 per hour and a rental rate of capital of $20 per hour. b. Suppose that a firm's production function is q= 10L 0.8K0.2. One production facility will usually be favored when _____. - In-house production is sometimes the only option for components and raw materials that are highly specialized, particularly as a matter of trust Under what conditions would Zona Co.'s subsidiary consider using a lagging Can you think of any ways in which a short-term shortage of production facilities of a manufacturer might be overcome? $ 262,000 $ 217,000 Q 108,500 lbs. The following standards for variable manufacturing overhead have been established for a company that makes only one product. The company does not make the gears it uses in its products, it, purchases them from a supplier in Hong Kong. Burning certain fuels results in solid waste such as ash, which must be stored and eventually disposed of properly. China's business ecosystem of networked suppliers,. During the month the company purchased and used 600 units of this material at a price of $2.25 per unit. Define the following term. Owner made no investments in the business, but dividends were $1,250 cash per month. It May Be Cheaper to Manufacture at Home - Harvard Business Review Physical, as in manufacturing b. Locational, as in transportation c. Informational, as in consulting d. Physiological, as in health care e. Exchange, as in retailing f. Storage, as in warehousing 6. Mariana_Joves. e. a company is extremely profitable. the system that businesses use to produce products, a production system in which goods dominate the value of the product, a production system in which services dominate the value of the product, suppliers > inputs > production process > outputs > customers, goods and services that integrate a product, the management of the direct resources that are involved in the production system of a business organization, When all production system direct resources of a firm originate from and reside in only one country, When one or more of the production system direct resources originate from or are located in more than one country. c. developing alternative strategies for addressing ga A computer repair service has a design capacity of 80 repairs per day. With capacity requirements planning, the calculated workload for a work center is compared with {Blank}. - any problems global businesses face are due to scandals regarding their products originated in substandard supply chains, because some companies in the supply chain could not trace back to suppliers the faulty components in the defective products. (a) a company is extremely Production systems with customized outputs typically have relatively: a. high volumes of output b. low unit costs c. fast work movement d. skilled workers, The short-run production function of a profit maximizer firm is given by f(L) = 6L^{2/3} , where L is the amount of labor it uses. B. The comparison of the expected cost of production against the actual cost of production typically occurs in the A. investment center. C) Price is below minimum average total costs. 2. proximity to market The production function for a productis given by Q=100KL. a. Explain the distinction, A firm produces output y using two factors of production (inputs), labour L and capital K. The firm's production function is f(L,K) = 1 2 ln(L) + 1 2 ln(K). While most of its products are processed independently, a few are related. b. Deriv, A company makes a product at a constant cost of $70 per unit and sells the product at $100 per unit. The machines operate on two 8-hour shifts. - logistics Last year saw 15,000 customer orders at the mill and the manager has a new John Battle Creek Cereal Company has four main products: Corn Flakes, Frosted Flakes, Bran Flakes and Strawberry Flakes. a) What is the Economic Prod, Consider a product with a daily demand of 400 units, a setup cost per production run of $100. If the design capacity is 15 furnaces a day and the effective capacity is 13 furnaces a day, what is the utilization of the system? A) design capacity B) effective capacity C) optimal capacity D) supply capacity. The best time standard applied historical A computer service has a design capacity of 104 repairs per day. Chapter 14 Global Production, Outsourcing, and Logistics - Studylib Capacity Planning Questions and Answers | Homework.Study.com A) Accounts payable and accruals are tied directly to sales. True or false? Test your understanding with practice problems and step-by-step solutions. A lock (LockA locked padlock) or https:// means youve safely connected to the .gov website.