Service Operations Management (OEDL 424)-Semester IV

Service Operations Management (OEDL 424)-Semester IV

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1st Module assessment

Case Study

It is now obvious that most economies, the world over, are increasingly becoming service economies and, therefore, there is a need to manage services in the best possible way. Services are activities which are intangible in nature, therefore, standardization is one of the major issues in services. Also, services are typically delivered by employees of the service providers, therefore, there is also a need to manage the human resources. In addition, unlike in the manufacturing sector where production, distribution

and consumption are separate activities, in service sector these three are simultaneous processes. In fact services are so varied and diverse that one needs to classify them to identify selected areas which need to be managed strategically.                                                                                                                               Key Terms in service operations are :

 1. Service: An activity or series of activities rather than things which has some element of intangibility associated with it, which involves some interaction between the customer and the service provider, and does not result in a transfer of ownership.

2. Intangibility: As services are performances or actions rather than objects, they cannot be seen, felt, tasted, or touched in the same manner that we can sense tangible goods.

3. Inseparability: A service cannot be separated from the person or firm providing it.                                   4. Heterogeneity: Since most of the services are being rendered by human beings, their performances cannot be mechanized and as a result no two performances of even a single service provider are identical.

5. Perishability: Services if not consumed simply perish away                                                                                           

Que 1:  Most economies, the world over, are increasingly becoming ……………economies

Select one:

a. product

b. service

c. product or service

d. product and service

Clear my choice

Question 2. Services are activities which are………………. in nature

Select one:

a. tangible

b.  intangible

c. sometimes tangible

d. sometimes intangible

Clear my choice

Question 3.  standardization is one of the………issues in services

Select one:

a. Major

b. Minor

c. No

d. complex

Clear my choice

Question 4.  services are typically delivered by ………… of the service providers,so there is also a need to manage the human resources

Select one:

a. consumers

b. Customers

c. Management

d. employees

Clear my choice

Question 5. In the manufacturing sector where production, distribution and consumption are separate activities, in service sector these three are ……………….. processes

Select one:

a. also separate

b. simultaneous

c. different

d. unlike

Clear my choice

Question 6. services are so varied and………… that one needs to classify them to identify selected areas which need to be managed strategically

Select one:

a. Uniform

b. Diverse

c. Similar

d. same

Clear my choice

Question 7. An activity or series of activities rather than things which has some element of intangibility associated with it, which involves some interaction between the customer and the service provider, and does not result in a transfer of ownership

Select one:

a. Intangibility

b. Inseparability

c. Service

d. Perishability

Clear my choice

Question 8. As services are performances or actions rather than objects, they cannot be seen, felt, tasted, or touched in the same manner that we can sense tangible goods

Select one:

a. Intangibility

b. Inseparability

c. Service

d. Perishability

Clear my choice

Question 9. A service cannot be separated from the person or firm providing it.

Select one:

a. Intangibility

b. Inseparability

c. Service

d. Perishability

Clear my choice

Question 10.  Services if not consumed simply perish away               

Select one:

a. Intangibility

b. Inseparability

c. Service

d. Perishability

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2nd Module assessment

Case Study

Service Marketing Mix                                                                                                                                                                                  The service marketing mix is also known as an extended marketing mix and is an integral part of a service blueprint design. The service marketing mix consists of 7 P’s as compared to the 4 P’s of a product marketing mix. Simply said, the service marketing mix assumes the service as a product itself. However it adds 3 more P’s which are required for optimum service delivery.

The product marketing mix consists of the 4 P’s which are Product, Pricing, Promotions and Placement. These are discussed in my article on product marketing mix – the 4 P’s.

The extended service marketing mix places 3 further P’s which include People, Process and Physical evidence. All of these factors are necessary for optimum service delivery. Let us discuss the same in further detail.                                                                                                                                                                                                                                           1) Product

The product in service marketing mix is intangible in nature. Like physical products such as a soap or a detergent, service products cannot be measured. Tourism industry or the education industry can be an excellent example. At the same time service products are heterogenous, perishable and cannot be owned.

The service product thus has to be designed with care. Generally service blue printing is done to define the service product. For example – a restaurant blue print will be prepared before establishing a restaurant business. This service blue print defines exactly how the product (in this case the restaurant) is going to be.                                                                                                                                    

2) Place

Place in case of services determine where is the service product going to be located. The best place to open up a petrol pump is on the highway or in the city. A place where there is minimum traffic is a wrong location to start a petrol pump. Similarly a software company will be better placed in a business hub with a lot of companies nearby rather than being placed in a town or rural area. Read more about the role of business locations or Place element.

3) Promotion

Promotions have become a critical factor in the service marketing mix. Services are easy to be duplicated and hence it is generally the brand which sets a service apart from its counterpart. You will find a lot of banks and telecom companies promoting themselves rigorously.

Why is that? It is because competition in this service sector is generally high and promotions is necessary to survive. Thus banks, IT companies, and dotcoms place themselves above the rest by advertising or promotions.                                                                                                                                                                                                                                                                                                                                                              

4) Pricing

Pricing in case of services is rather more difficult than in case of products. If you were a restaurant owner, you can price people only for the food you are serving. But then who will pay for the nice ambiance you have built up for your customers? Who will pay for the band you have for music?

Thus these elements have to be taken into consideration while costing. Generally service pricing involves taking into consideration labor, material cost and overhead costs. By adding a profit mark up you get your final service pricing. You can also read about pricing strategies.

Here on we start towards the extended service marketing mix.

5) People

People is one of the elements of service marketing mix. People define a service. If you have an IT company, your software engineers define you. If you have a restaurant, your chef and service staff defines you. If you are into banking, employees in your branch and their behavior towards customers defines you. In case of service marketing, people can make or break an organization.      Thus many companies nowadays are involved into specially getting their staff trained in interpersonal skills and customer service with a focus towards customer satisfaction. In fact many companies have to undergo accreditation to show that their staff is better than the rest. Definitely a USP in case of services.

6) Process

Service process is the way in which a service is delivered to the end customer. Lets take the example of two very good companies – Mcdonalds and Fedex. Both the companies thrive on their quick service and the reason they can do that is their confidence on their processes.

On top of it, the demand of these services is such that they have to deliver optimally without a loss in quality. Thus the process of a service company in delivering its product is of utmost importance. It is also a critical component in the service blueprint, wherein before establishing the service, the company defines exactly what should be the process of the service product reaching the end customer.

7) Physical Evidence

The last element in the service marketing mix is a very important element. As said before, services are intangible in nature. However, to create a better customer experience tangible elements are also delivered with the service. Take an example of a restaurant which has only chairs and tables and good food, or a restaurant which has ambient lighting, nice music along with good seating arrangement and this also serves good food. Which one will you prefer? The one with the nice ambience. That’s physical evidence.

Several times, physical evidence is used as a differentiator in service marketing. Imagine a private hospital and a government hospital. A private hospital will have plush offices and well dressed staff. Same cannot be said for a government hospital. Thus physical evidence acts as a differentiator.

Question 1. service products are heterogenous, perishable and …………. be owned.

Select one:

a. cannot

b. can

c. always

d. sometime

Clear my choice

Question 2. The product in service marketing mix is ……………… in nature

Select one:

a. tangible

b. sometimes tangibile

c. intangible

d. occasionally tangible

Clear my choice

Question 3. a software company will be better placed in a business hub with a lot of companies ……………….. rather than being placed in a town or rural area

Select one:

a. at distinct place

b. in isolation

c. away

d. nearby

Clear my choice

Question 4. Services are …………..to be duplicated and hence it is generally the brand which sets a service apart from its counterpart

Select one:

a. difficult

b. tough

c. Easy

d. impossible

Clear my choice

Question 5

because competition in this service sector is generally high and promotions is ………………. to survive

Select one:

a. Unnecessary

b. necessary

c. not required

d. undesirable

Clear my choice

Question 6.  a restaurant blue print will be prepared ………………. establishing a restaurant business

Select one:

a. after

b. simultaniously

c. before

d. at the same time

Clear my choice

Question 7. Pricing in case of services is rather ……….. difficult than in case of products

Select one:

a. least

b. No

c. less

d. More

Clear my choice

Question 8.  People is ……………..the elements of service marketing mix

Select one:

a. not

b. only

c. Competitive response

d. One of

Clear my choice

Question 9. Many companies nowadays are involved into specially getting their staff trained in interpersonal skills and customer service with a focus towards customer ……………………

Select one:

a. dissatisfaction

b. satisfaction

c. frustration

d. Discontent

Clear my choice

Question 10. Many companies have to undergo accreditation to show that their staff is …………………. the rest. Definitely a USP in case of services.

Select one:

a. better than

b. same as

c. non competitive than

d. Similar to

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3rd Module assessment

Case Study

Process Selection and Facility Layout

1. Process selection involves making choices concerning the way an organization will produce its products or provide services to its customers. It has major implications for capacity planning, layout and work methods.

2. Managers can select from five different types of processes: job shop, batch, repetitive, continuous and projects. Job shops are used to produce a low volume of each of a large variety of products or services. Equipment flexibility must be high to handle the high variety of jobs. Batch processing involves less variety, less need for equipment flexibility, and higher volumes of each type of product. Repetitive processing has even less variety, less need for equipment flexibility, and higher volume. Continuous processing has the lowest variety, the lowest need for equipment flexibility, and the highest volume.

Job shops and batch processing are classified as intermittent systems, meaning that output frequently switches from one product or service to another. Repetitive and continuous systems are classified as continuous processing because there is little or no switching from one product to another. Projects are used for non-routine work that is intended to meet a given set of objectives in a limited time frame. Job variety is high, volume is usually low, and equipment flexibility needs can range from low to high.

3. Process selection may lead to automation or computer-aided manufacturing. [You should find it helpful to list the different types of computer-aided manufacturing, along with a brief description and advantages and limitations of each type.]

4. A key issue in process selection is the management of technology. See the discussion under the Operations Strategy section. Another key issue in process selection is flexibility.

5. There are three fundamental types of plant layout, respectively corresponding to the three different types of production operations situations.

    A product layout implies that a single product or else a single type of product, for example, automobiles, is manufactured on an assembly line, with the production tasks assigned to workstations along the line.

    A process layout involves the movement of batches of goods between departments via forklift truck, moving belt, or some other type of conveyance.

    A fixed-position layout is appropriate for a large end item such as a house or airplane, where all material is assembled to a major structure or product at a specified site.

6. A product layout such as that associated with automobile factories is a good idea when it is justified by the volume. The advantages of product layout are that it involves continuous flow of the work in process, minimum work-in-process inventory, maximum specialization, low material handling costs, efficient utilization of labor and equipment, and systematized routing, purchasing, accounting and inventory control. The disadvantages are dull repetitive jobs, inflexibility and susceptibility to frequent shutdowns.

 7. A process layout allocates floor space to work centers so as to sustain a logical flow of semi-finished goods, and minimize transportation and inventory costs. It is more flexible than product layout in the sense that a variety of products can be made without incurring extensive changeover costs. It also makes better use of the specialized skills of employees, so that incentive pay systems can be effective in enhancing productivity. Process layout is appropriate when each type of product or semi-finished goods has low volume, but there are potentially high costs for unused equipment, excess inventory, slow or irregular movement, and a need for extensive production control paperwork.

8. A fixed-position layout is appropriate for large construction projects or for assembly of very large products such as airplanes, which are difficult to move. An example of a fixed position service system is a subway, which is an economical way to move large masses of people.

9. An assembly line is balanced to smooth the flow of semi-finished goods, and to achieve the best possible utilization of both the labor force and the plant. The work is subdivided into groups of tasks, and each group is performed at some specific location along the line called a workstation. A workstation might be a single employee, or possibly a small cluster of employees, if the services of more than one person are required for the tasks.

10. The cycle time is the span of time a unit of product is at a workstation. In balancing the line, we determine both the cycle time and the number of workstations, based on the number of units of product to be produced in a working day, the total of the times of the tasks needed to make one unit of the product, and the amount of effective clock time available in a day, after allowing for rest periods, breaks and planned shutdowns of the line.

11. There are several different meanings of the term “cycle.” The minimum cycle time is the time required for the longest task. The maximum cycle time is the sum of the task times for a single unit of product. The actual cycle time is somewhere between these two extremes; it is the amount of time at the workstation with the largest sum of task times.

12. The minimum number of workstations in the product layout is the quotient of the sum of the task times for a single unit of product divided by the cycle time, rounded to the next highest integer. Assigning tasks to workstations is done with heuristics (rules of thumb):

    Consider precedence; make sure that all jobs are done in a logical sequence.

    Try to keep all stations busy all of the time by filling up the cycle time with tasks. Do not assign a station more tasks than it has time to perform.

    The greatest positional weight rule, one of several heuristics for assigning tasks to stations assigns tasks according to the greatest sum of remaining task times to a free station. Other heuristics are: most following tasks, most preceding tasks, and greatest sum of task times for tasks that precede.

13. Measures of effectiveness guide decision makers to satisfactory, but not necessarily optimum decisions on process layouts. The simplest approach involves ranking of departments or work centers according to workflow (Distance x Number of loads carried), and assigning work center locations so as to minimize the total intraplant transportation costs.

Question 1. A product layout:

Select one:

a. Is appropriate for low-volume operations.

b. Groups transforming resources into dedicated cells.

c. Involves locating the transforming resources entirely for the convenience of the transformed resources.

d. Allows a wide variety of products to be manufactured on the same equipment.

Clear my choice

Question 2. A self-service cafeteria is usually positioned as:

Select one:

a. Cell layout

b. Process layout

c. Fixed-position layout

d. Product layout

Clear my choice

Question 3. Cell layouts typically:

Select one:

a. Involve all the operations on a product being located adjacent to each other.

b. Are dominated by the transforming resources.

c. Cost more to run than other types of process layout.

d. Are the most efficient form of process layout.

Clear my choice

Question 4. From high variety to low variety, which is the correct order of layout types?

Select one:

a. Process, cell, product

b. Fixed-position, cell, process

c. Product, cell, process

d. Product, fixed-position, process

Clear my choice

Question 5. The degree and direction of flow are usually shown on a:

Select one:

a. Decision tree

b. Flow diagram

c. Flow record chart

d. QFD matrix

Clear my choice

Question 6. The layout of an operation is concerned with deciding where to put:

Select one:

a. Staff, machines, facilities and equipment

b. Equipment, staff, and machines

c. Staff and facilities

d. Facilities and machines

Clear my choice

Question 7. The layout where the equipment, machinery, plant and people move as necessary is known as:

Select one:

a. Fixed-position layout

b. Product layout

c. Cell layout

d. Process layout

Clear my choice

Question 8. Which of the following is a potential disadvantage of process layout?

Select one:

a. Easily disrupted

b. Complex flow can be difficult to control

c. Low product flexibility

d. Hard to supervise

Clear my choice

Question 9.Which of the following is a potential disadvantage of product layout?

Select one:

a. Not very robust if there is a disruption

b. Inconvenient movement of materials

c. High unit costs

d. Limited opportunities for specialisation of equipment

Clear my choice

Question 10.Which of the following is not usually considered a characteristic of a fixed-position layout?

Select one:

a. Transforming resources are grouped in cells.

b. The recipient of the process or the work being undertaken remain in the same place.

c. Fixed-position layouts are able to offer high flexibility.

d. Transforming resources often move to the work.

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4th Module assessment

Case Study

Quality Control

1. There are two principal types of ways of measuring quality: attributes (counting the number of occurrences in one or two categories) and variables (measuring a characteristic or the deviation from a standard).

2. There are two principal types of Quality Assurance: sampling inspection of incoming outgoing materials (acceptance sampling) and control charts for ongoing processes (process control).

3. Control charts differentiate between the process being in control (within an accept range of random variation) and out of control (outside the acceptable range). Process control involves making frequent small sample inspections to detect whether the process in control or out of control. Out of control means either above the upper control limit below the lower control limit. The limits for control charts are established first by obtaining 20 to 25 small samples of same size at different times from the process. This forms the basis for judging future samples.

4. The four types of control charts  are: x-bar chart for means, R charts for ranges, p-charts for fractions of defective items, and c charts for the number of defects.

5. Key managerial decisions about the uses of control charts are where in the process to use them, what size sample to take, and what type (variables or attributes) to use.

6. Run tests such as the number of runs with respect to the median, and the number of runs up and down, can be useful in checking for nonrandomness. Run tests should be used in conjunction with control charts. Both approaches test for randomness. A process that is in control will exhibit randomness in a sequence of observations; the appearance of nonrandomness suggests that the process is not random (i.e., not in control).

7. A process capability ratio provides an indication of the ability of the process to meet specifications. It is computed as the ratio of a specified dimension to the process width on that dimension. A value of 1.00 means the two are equal; the greater the value of the ratio, the more likely it is that the process output will fall within the allowable variation (specification).

Question 1. counting the number of occurrences in one or two categories is known as

Select one:

a.  variables

b. variations

c. variability

d. attributes

Clear my choice

Question 2. measuring a characteristic or the deviation from a standard is known as

Select one:

a. Variable

b. Variation

c. Veriability

d. Attribute

Clear my choice

Question 3. sampling inspection of incoming outgoing materials is known as

Select one:

a. acceptance sampling

b. rejection sampling

c. product control

d. process control

Clear my choice

Question 4. control charts for ongoing processes

Select one:

a. acceptance sampling

b. rejection sampling

c. product control

d. process control

Clear my choice

Question 5. the process being in control in “control chart” is when

Select one:

a. value is outside an accept range of random variation

b. value is within an rejection range of random variation

c. value is never  an accept range of random variation

d. value is within an accept range of random variation

Clear my choice

Question 6. the process being out of  control in “control chart” is when

Select one:

a. value is within an accept range of random variation

b. value is always in accept range of random variation

c. value is sometimes in an accept range of random variation

d. value is outside the acceptable range

Clear my choice

Question 7. which is not types of control charts

Select one:

a. d-chart

b.  x-bar chart

c. R charts

d. p-charts

Clear my choice

Question 8.  A process capability ratio provides an indication of the …………of the process to meet specifications

Select one:

a. inability

b. nonconfirmance

c. Ability

d. Capicity

Clear my choice

Question 9. The ratio of a specified dimension to the process width on that dimension, a value of 1.00 means the two are ………………

Select one:

a. Unequal

b. Unbalance

c. Equal

d. One of them

Clear my choice

Question 10. A process that is in control will exhibit randomness in a ……………….. of observations

Select one:

a. sequence

b. random

c. Complex

d. Irregular

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5th Module assessment

Case Study

Forecasting

1. Successful operations planning requires good forecasts.

2. Forecasting is imprecise, but the errors in prior forecasts are measurable.

3. There are qualitative and quantitative forecast systems.

    The qualitative systems include expert or executive opinions, sales force composites, opinion surveys and the Delphi technique. The Delphi method includes a sequence of questionnaires administered to a select group of qualified experts; the design of each questionnaire is based upon the results of the previous questionnaire.

    Quantitative forecasting methods include naïve forecasts, exponential smoothing, moving averages, and associative (regression-based) systems. A forecast system may be a combination of several of these.

    The “naive” model is a simple special case: the value for the next period is predicted to be the same as it was in the previous period. For data that has cyclical or seasonal variations, the “last period” would be the previous corresponding period, such as “the forecast for this Friday is actual demand for last Friday.” A trend version of a naive model is that the difference between the value for this period and the value for the next period will be the same as the difference between the last period and this one.

4. The accuracy of a forecast system depends upon:

    accuracy of the historical time series data

    similarity of patterns between the past and the future

    grouping or aggregation of the data series

    time lapse between the historical periods and the period for which the prediction is being made choice of a model.

5. Exponential smoothing is an adaptive forecasting technique with some advantages over other types of moving averages and other statistically based measures. These advantages include:

    the calculations are simple.

    the weighting pattern can be changed simply by changing the smoothing constant.

    Both exponential smoothing and simple moving averages smooth the data and lag changes in a time series.

6. If there is trend in the historical data, single exponentially smoothed forecasts tend to lag behind the actual values. Therefore, it is necessary to incorporate trend adjustments, with double smoothing.

7. Associative techniques involve the use of predictor (independent) variables in equation form to estimate values of the variable of interest (dependent variable). Least squares analysis is used to obtain the coefficients of the regression equation.

8. Moving averages and trend lines can be used to compute monthly, weekly or daily indexes that show how one part of a “season” compares to the average value of a time series. These seasonal indexes are used in conjunction with trend calculations to generate predictions that take account of fluctuations in demand or economic activity within a period of a year.

9. This shows how to monitor and control the accuracy of forecasts. The mean absolute deviation (MAD) is a measure of how far the actual values were from the predictions for previous periods, on the average. The tracking signal (TS) is a measure of the bias of the differences between the actual values and the predictions.

10. A forecast is deemed to be in control when forecast errors are judged to be random.

question 1. Successful operations planning requires?

Select one:

a. poor forecasts

b.  NO forecasts

c. Random forecasts

d. Good forecast

Clear my choice

Question 2.  Forecasting is imprecise, but the errors in prior forecasts are……………

Select one:

a. not measurable

b. difficult to calculate

c. unmeasurable

d.  measurable

Clear my choice

Question 3. Which one of these is not an element of a good forecast?

Select one:

a. low cost

b. In writing

c. Meaningful unit

d. Timely

Clear my choice

Question 4. Select the statement about moving averages and exponential smoothing that is not true.

Select one:

a. Both tend to lag changes in a time series.

Both tend to lag changes in a time series.

b. Both smooth data.

c.  Both involve fairly simple calculations.

d. Both can be used obtain seasonal index numbers.

Clear my choice

Question 5. Data that have large variation will result in:

Select one:

a.  a low MAD but a high MSE.

b. a high MAD but a low MSE.

c.  Both involve fairly simple calculations.

d. Both can be used obtain seasonal index numbers.

Clear my choice

Question 6. Quantitative forecasting methods does not include

Select one:

a. naïve forecasts

b. exponential smoothing,

c. sales force composites

d.  moving averages,

Clear my choice

Question 7. The accuracy of a forecast system depends upon

Select one:

a.  accuracy of the historical time series data

b.  similarity of patterns between the past and the future

c.  grouping or aggregation of the data series

d. all of them

Clear my choice

Question 8. quantitative systems does include

Select one:

a.  expert or executive opinions

b. Moving average

c. sales force composites

d.  opinion surveys

Clear my choice

Question 9. Associative techniques involve the use of……………variables in equation form to estimate values of the variable of interest

Select one:

a. none

b. random

c. dependent

d. independent

Clear my choice

Question 10. qualitative systems does not include

Select one:

a.  expert or executive opinions

b. Moving average

c. sales force composites

d.  opinion surveys

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Assignment 2

Case Study

Capacity Planning 

1. Strategically, capacity and financial decisions are made first, followed by decisions on location of the facility, design of the product, layout and work systems.

2. Capacity is the upper limit or ceiling on the load that an operating system can handle. Essentially, it is the upper limit on output.

3. If products are similar enough, capacity is measured in common units or rates of output; when products are dissimilar, capacity is in units of resources used: machine time, labor hours, etc. Capacity is not measured in dollar units, because there can be substantial changes in prices over the life cycle of the product.

4. The capacity decision involves the type of equipment or facilities to be employed in producing the product or service, how much capacity or equipment is needed, and when it is needed. These decisions are often costly and difficult to modify.

5. Effective capacity is less than the design capacity, because the system may have alternative product-mix strategies, because of changes in design of the product and quality specifications, job requirements or work rules. Actual output would usually be less than effective capacity, because of shortages, delays, bottlenecks or changes in demand.

    Efficiency is the ratio of actual output to effective capacity.

    Utilization is the ratio of actual output to design capacity.

6. Planning considerations involve long-run trends, seasonal shifts in demand, and joint and competing products and services.

7. Cost-volume (breakeven analysis, supplemented by marginal analysis on the optimum size of a plant, helps in determining the optimum design capacity, for a variety of output rates.

8. The linear breakeven model assumes that there is only one product, all production is sold, variable cost per unit of output is constant, and that there is no change in fixed costs or in per unit revenues, regardless of volume. If there are major deviations from these assumptions, a nonlinear model should be used instead of a linear one.

Question 1. Efficiency, in capacity terms, is the ratio of.

Select one:

a. actual output to effective capacity.

b. actual output to design capacity.

c. effective capacity to actual output.

d. design capacity to effective capacity.

Clear my choice

Question 2. If a customer refuses to join a queue and wait for a service, this is called:

Select one:

a. Reneging

b. Baulking

c. Queue discipline

d. Rejecting

Clear my choice

Question 3. The assumptions of cost-volume analysis include: I. The variable cost per unit is the same regardless of volume. II. Fixed costs do not change when the volume of production changes. III. Revenue per unit is the same regardless of volume.

Select one:

a. I only.

b. I and II only.

c. II only.

d. I, II and III.

Clear my choice

Question 4. What is the breakeven quantity of weekly production for this particular situation: fixed cost: $1,500 per week; variable cost: $3 per unit; revenue: $6 per unit

Select one:

a. 200

b. 500

c. 100

d. 600

Clear my choice

Question 5. What is the breakeven quantity of weekly production for this particular situation: fixed cost: $1,500 per week; variable cost: $3 per unit; revenue: $6 per unit

Select one:

a. Effective capacity is larger than design capacity.

b. Actual output is larger than effective capacity.

c. Design capacity is larger than effective capacity.

d. Actual output is larger than design capacity.

Clear my choice

Question 6. When a customer has queued for a certain period of time and becomes so fed up they leave the queue, this is called:

Select one:

a. Rejecting

b. Queue discipline

c. Reneging

d. Baulking

Clear my choice

Question 7. When all three ‘pure’ capacity plans are used in combination, this called a:

Select one:

a. Composite plan

b. Mixed plan

c. Aggregate strategy

d. Composite strategy

Clear my choice

Question 8. When capacity is relatively fixed, services are sold in advance, and the marginal cost of making a sale is relatively low, which of the following capacity plans may be most appropriate?

Select one:

a. Level capacity plan

b. Mixed plans

c. Chase demand plan

d. Yield management

Clear my choice

Question 9. Which of the following is the most difficult aspect of demand for capacity planners to deal with?

Select one:

a. Trend; that is, the long term tendency of demand for the product to increase or decrease.

b. Seasonal fluctuations in demand.

c. Cyclical fluctuations in demand.

d. Irregular variations in demand.

Clear my choice

Question 10. Which one of these does not involve developing capacity alternatives?

Select one:

a. Designing flexibility into the system.

b. Taking a “big picture” approach.

c. Smoothing capacity requirements.

d. Focusing on quantitative factors.

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