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
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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.
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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
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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
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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
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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.
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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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