Master Capacity Management Techniques for Operational Efficiency

Question 1

Which of the following is NOT a fundamental step in effective capacity management?

Accepted Answer

Outsourcing production processes

Answer

Forecasting demand accurately

Answer

Scheduling production efficiently

Answer

Managing inventory levels optimally

Question 2

Which factor does NOT directly influence capacity utilization?

Accepted Answer

Employee motivation

Answer

Production rate

Answer

Demand rate

Answer

Machine downtime

Question 3

Which performance metric is primarily used to measure the efficiency of capacity utilization?

Accepted Answer

Capacity utilization rate

Answer

Throughput time

Answer

Inventory turnover ratio

Answer

Overall equipment effectiveness

Question 4

What is the process called when resources are allocated to meet customer demand?

Accepted Answer

Scheduling

Answer

Inventory management

Answer

Capacity planning

Answer

Demand planning

Question 5

What do we call the optimal inventory level that minimizes total inventory costs?

Accepted Answer

Economic order quantity

Answer

Safety stock

Answer

Cycle stock

Answer

Reorder point

Question 6

What is the fundamental objective of level scheduling?

Accepted Answer

Maintain a constant production rate

Answer

Reduce setup times

Answer

Minimize inventory levels

Answer

Maximize machine utilization

Question 7

Which of the following is not a potential consequence of overcapacity?

Accepted Answer

Improved customer satisfaction

Answer

Increased production costs

Answer

Lower product quality

Answer

Wasted resources

Question 8

In capacity management, which concept considers factors like machine downtime and setup time?

Accepted Answer

Effective capacity

Answer

Theoretical capacity

Answer

Ideal capacity

Answer

Maximum capacity

Question 9

When using capacity planning software, what is the main purpose of a 'bottleneck analysis' feature?

Accepted Answer

To identify areas within the production process that limit overall capacity.

Answer

To optimize the utilization of individual machines and workstations.

Answer

To generate detailed schedules for each production line.

Answer

To monitor inventory levels in real-time.

Question 10

In aggregate planning, which of the following approaches involves adjusting production levels to meet demand fluctuations?

Accepted Answer

Chase demand

Answer

Level capacity

Answer

Forecast demand and inventory

Answer

Schedule production and dispatch orders

Question 11

Within the framework of lean manufacturing, what is the primary function of the 'kanban' system?

Accepted Answer

Managing inventory levels

Answer

Minimizing process variations

Answer

Improving product quality

Answer

Reducing setup times

Question 12

Which of the following factors is generally NOT considered when evaluating capacity alternatives?

Accepted Answer

Employee morale

Answer

Cost

Answer

Quality

Answer

Flexibility

Question 13

When is it most appropriate for a company to consider expanding its production capacity?

Accepted Answer

When demand consistently exceeds capacity

Answer

When there is a need to reduce operating costs

Answer

When there is a shift in product mix

Answer

When employee productivity decreases

Question 14

In capacity planning, which factor is most crucial when choosing a forecasting technique?

Accepted Answer

Forecast accuracy requirements

Answer

Historical data availability

Answer

Technique's computational complexity

Answer

Implementation cost of the technique

Question 15

What is the primary purpose of capacity planning?

Accepted Answer

To ensure the organization can meet demand without exceeding its capacity.

Answer

To eliminate all potential bottlenecks in the production process.

Answer

To minimize the cost of production.

Answer

To maximize the utilization of all available resources.

Question 16

Forecasting techniques are essential for capacity management. Which of the following forecasting methods relies on historical data patterns?

Accepted Answer

Time series analysis

Answer

Regression analysis

Answer

Expert opinion

Answer

Market research

Question 17

When creating a production schedule, which factor is NOT directly relevant?

Accepted Answer

Weather conditions

Answer

Customer demand

Answer

Available machine capacity

Answer

Employee availability

Question 18

Which performance metric is commonly used to measure the efficiency of capacity utilization?

Accepted Answer

Throughput rate

Answer

Inventory turnover

Answer

Lead time

Answer

Return on investment (ROI)

Question 19

In a JIT inventory system, what is the primary objective?

Accepted Answer

Minimizing inventory levels

Answer

Maximizing production efficiency

Answer

Reducing lead times

Answer

Increasing customer satisfaction

Question 20

Which scheduling technique assigns tasks to resources based on their availability and skills?

Accepted Answer

Priority scheduling

Answer

First-come, first-served (FCFS)

Answer

Last-come, first-served (LCFS)

Answer

Shortest job first (SJF)

Question 21

Which of the following inventory models is specifically used to determine the optimal quantity to order when replenishing inventory?

Accepted Answer

Economic Order Quantity (EOQ) model

Answer

ABC analysis

Answer

Safety stock model

Answer

Lead time inventory model

Question 22

What is the primary factor that determines the overall capacity of a production system?

Accepted Answer

Equipment capacity and capabilities

Answer

Availability and skills of the workforce

Answer

Material availability and supply chain reliability

Answer

Market demand and customer orders

Question 23

What is the primary purpose of lead time in inventory management?

Accepted Answer

To buffer against demand uncertainty and variability

Answer

To allow for production scheduling and planning

Answer

To ensure customer satisfaction and minimize backorders

Answer

To reduce inventory holding costs and improve cash flow

Question 24

Which of the following is a key benefit of maintaining a safety stock in inventory management?

Accepted Answer

Reduces the risk of stockouts and ensures product availability

Answer

Increases customer satisfaction and loyalty

Answer

Lowers inventory holding costs and improves cash flow

Answer

Improves production efficiency and reduces lead times

Question 25

A company's current production capacity is 1,200 units per day. If demand increases by 25%, what is the company's updated capacity requirement?

Accepted Answer

1,500 units per day

Answer

1,000 units per day

Answer

800 units per day

Answer

1,200 units per day

Question 26

For high-volume, repetitive manufacturing processes, which scheduling technique is most suitable?

Accepted Answer

Line balancing

Answer

Critical path method (CPM)

Answer

Program evaluation and review technique (PERT)

Answer

Gantt chart

Question 27

The economic order quantity (EOQ) model is used to determine the optimal quantity of inventory to order. Which factor is NOT considered in the EOQ calculation?

Accepted Answer

Production capacity

Answer

Holding cost

Answer

Order cost

Answer

Demand rate

Question 28

Which inventory control system monitors inventory levels continuously and triggers automatic reordering?

Accepted Answer

Perpetual review system

Answer

Periodic review system

Answer

Just-in-time (JIT) system

Answer

Safety stock system

Question 29

When faced with an unexpected surge in demand, which capacity management strategy involves adjusting the workforce or outsourcing production?

Accepted Answer

Chase strategy

Answer

Level strategy

Answer

Lead strategy

Answer

Lag strategy

Question 30

To optimize profitability through capacity management, businesses should:

Accepted Answer

Accurately forecast demand and adjust capacity accordingly

Answer

Focus solely on maximizing production output

Answer

Ignore capacity constraints to meet short-term sales goals

Question 31

Which scheduling technique is most suitable for a mass production environment characterized by high volume and repetitive tasks?

Accepted Answer

Assembly line balancing

Answer

Project scheduling

Answer

Job-shop scheduling

Answer

Flexible manufacturing system

Question 32

The primary purpose of holding safety stock is to:

Accepted Answer

Mitigate uncertainties in demand and supply

Answer

Reduce production costs

Answer

Enhance customer service levels

Answer

Compensate for inventory shrinkage

Question 33

Which type of demand forecast is primarily based on historical data analysis?

Accepted Answer

Time series forecast

Answer

Expert opinion forecast

Answer

Causal forecast

Answer

Market research forecast

Question 34

Which of the following is NOT a potential benefit of capacity planning?

Accepted Answer

Increased customer dissatisfaction

Answer

Improved customer service

Answer

Lower operating expenses

Answer

Enhanced operational efficiency

Question 35

The process of breaking down a large project into smaller, more manageable tasks is referred to as:

Accepted Answer

Work breakdown structure

Answer

Resource leveling

Answer

Critical path analysis

Answer

Project network diagram

Question 36

Which of the following inventory control methods involves regular physical counts of inventory?

Accepted Answer

Periodic inventory system

Answer

Perpetual inventory system

Answer

Just-in-time inventory system

Answer

Safety stock inventory system

Question 37

The expected value of perfect information (EVPI) measures the:

Accepted Answer

Potential value of having complete and perfect information

Answer

Cost of obtaining perfect information

Answer

Accuracy of the information currently available

Question 38

A limitation of the linear programming approach to capacity planning is that it:

Accepted Answer

Assumes linear relationships between variables

Answer

Considers multiple objectives

Answer

Provides optimal solutions

Question 39

Which forecasting technique is most suitable for predicting demand patterns that exhibit a seasonal component?

Accepted Answer

Time series analysis with seasonal decomposition

Answer

Regression analysis

Answer

Exponential smoothing

Answer

Moving averages

Question 40

Which scheduling method optimizes resource utilization by assigning tasks based on their priority, resource availability, and minimizing the makespan?

Accepted Answer

Priority scheduling with resource constraints

Answer

Last-in, first-out (LIFO)

Answer

First-in, first-out (FIFO)

Answer

Random scheduling

Question 41

What is the primary objective of inventory management?

Accepted Answer

To maintain optimal inventory levels that satisfy customer demand while minimizing total inventory costs.

Answer

To eliminate the risk of stockouts.

Answer

To maximize the number of products in stock.

Question 42

Which inventory model determines the optimal reorder point and order quantity, considering factors such as demand, lead time, holding costs, and setup costs?

Accepted Answer

Economic Order Quantity (EOQ) model

Answer

Just-in-time (JIT) inventory system

Answer

Materials requirements planning (MRP)

Answer

Safety stock model

Question 43

Which capacity planning strategy involves increasing production capacity through investments in new equipment, facilities, or technology?

Accepted Answer

Capacity expansion

Answer

Capacity reduction

Answer

Demand management

Answer

Process improvement

Question 44

What is a key benefit of applying queuing theory to analyze waiting lines?

Accepted Answer

It enables the calculation of performance metrics such as average waiting time, queue length, and server utilization, facilitating data-driven decision-making.

Answer

It guarantees the elimination of waiting lines.

Question 45

Which demand management strategy aims to shift demand away from peak periods to reduce the need for additional capacity?

Accepted Answer

Load leveling

Answer

Promotions

Answer

Price discrimination

Answer

Customer education

Question 46

What is the primary purpose of holding safety stock?

Accepted Answer

To provide a buffer against unexpected variations in demand and prevent stockouts.

Answer

To reduce inventory carrying costs

Answer

To expedite order fulfillment

Question 47

Which process improvement technique involves mapping the flow of materials and information through a process to identify and eliminate non-value-added activities?

Accepted Answer

Value stream mapping

Answer

Total Quality Management (TQM)

Answer

Six Sigma

Answer

Lean manufacturing

Question 48

Which of the following is NOT a key element of effective capacity management?

Accepted Answer

Ignoring customer demand

Answer

Forecasting

Answer

Inventory management

Answer

Scheduling

Question 49

What is the primary objective of forecasting in capacity management?

Accepted Answer

Predicting future demand

Answer

Determining current capacity

Answer

Managing inventory levels

Answer

Scheduling production

Question 50

Which of the following scheduling techniques prioritizes urgent tasks over less critical ones?

Accepted Answer

Priority scheduling

Answer

First-come, first-served

Answer

Batch scheduling

Answer

Random scheduling

Question 51

What is the main purpose of safety stock in inventory management?

Accepted Answer

Buffer against unexpected demand fluctuations

Answer

Reduce ordering costs

Answer

Free up storage space

Answer

Increase inventory turnover

Question 52

Which of the following is a benefit of effective capacity management?

Accepted Answer

Reduced costs

Answer

Poor customer service

Answer

Increased production time

Answer

Excess inventory

Question 53

What is the difference between fixed and flexible capacity?

Accepted Answer

Fixed capacity is constant, while flexible capacity can be adjusted

Answer

Fixed capacity is for production, while flexible capacity is for services

Answer

Fixed capacity is low, while flexible capacity is high

Question 54

What is a key performance indicator (KPI) commonly used in capacity management?

Accepted Answer

Capacity utilization

Answer

Return on investment

Answer

Employee turnover

Answer

Customer satisfaction

Question 55

Which of the following is a common challenge in capacity management?

Accepted Answer

Balancing supply and demand

Answer

Meeting regulatory requirements

Answer

Obtaining financing

Answer

Finding qualified employees

Question 56

What is a key consideration when implementing capacity management techniques?

Accepted Answer

The specific business context and objectives

Answer

Industry best practices

Answer

Available technology