1. Which of the following statements is not true about capacity management in operations?
A.When looking at capacity, operations managers need to look at both resource input and product outputs.
B.An operations management view also emphasizes the time dimension of capacity.
C.Capacity planning itself has different meaning to individuals at different levels within the operations management hierarchy.
D.The definition of capacity, in an operations management context, makes a clear distinction between efficient and inefficient use of capacity.

2. Capacity utilization rate can be computed as:
A.Capacity used - best operating level
B.Capacity used x best operating level
C.Capacity used / best operating level
D.Capacity used + best operating level
E.None of the above

3. Capacity flexibility can be achieved through:
A.Flexible plants
B.Flexible processes
C.Flexible workers
D.Strategies that use the capacity of other organizations
E.All of the above

4. Considerations in adding capacity include:
A.Maintaining system balance
B.Frequency of capacity additions
C.External sources of capacity
D.A and B
E.A and C
F.A, B, and C

5. The types of costs to consider when adding capacity are the cost of upgrading frequently and the cost of upgrading too infrequently.

6. The steps to determining capacity requirements include:
A.Using decision trees to evaluate capacity alternatives
B.Calculating equipment and labor requirements to meet product line forecasts
C.Projecting labor and equipment availabilities over the planning horizon
D.A and B
E.B and C
F.A, B, and C

7. Service capacity:
A.is highly time and location dependent
B.is subject to less volatile demand fluctuations
C.utilization directly impacts service quality
D.A and B
E.A and C
F.A, B, and C

8. The best operating level is:
A.the maximum point of the cost curve
B.the level of capacity for which average unit cost is minimized
C.maximum capacity
D.the level of capacity for which total cost is minimized
E.the level of capacity for which average unit cost is maximized

9. Skinner is cited as suggesting which of the following capacity-related concepts?
A.Capacity balance
B.Diseconomies of scale
C.Best operating level
D.Focused factory
E.None of the above

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