Production and Operations Management

71. In general, a less capital-intensive industry such as a hotel chain would do well with a utilization rate of:

  1. Approximately 18%.
  2. 30-40%.
  3. 60-70%.
  4. 100%.
Correct answer: (C)
60-70%.

72. A facility with a design capacity of 1,000 units, an actual average of 800 units, and effective capacity of 850 units has an efficiency of ______________.

  1. 80%
  2. 50%
  3. 85%
  4. 94%
Correct answer: (D)
94%

73. The first steps of capacity planning and control do not include:

  1. Identifying the alternative capacity plans?
  2. Measuring aggregate demand and capacity?
  3. Studying the effect of queueing theory
  4. Choosing the most appropriate capacity plan?
Correct answer: (C)
Studying the effect of queueing theory

74. Someone who controls media purchases and deals with advertising agencies is ____________________.

  1. An advertising manager
  2. A brand manager
  3. A public relations manager
  4. A sales manager
Correct answer: (A)
An advertising manager

75. A measure of the reserve capacity a process has to handle in unexpected increases in demand is the:

  1. Capacity utilization rate.
  2. Capacity cushion.
  3. Capacity bottleneck.
  4. Capacity constraint limit.
Correct answer: (B)
Capacity cushion.

76. The maximum output of a system in a given period is called the

  1. Efficiency.
  2. Effective capacity.
  3. Design capacity.
  4. Break-even point.
Correct answer: (C)
Design capacity.

77. The multiple product case of determining breakeven in dollars

  1. Weights the variable cost of each product.
  2. Weights the selling price of each product.
  3. Weights the fixed cost attributable to each product.
  4. Weights the contribution of each product.
Correct answer: (D)
Weights the contribution of each product.

78. The basic break-even model

  1. Demonstrates that the break-even point increases as output volume increases.
  2. Demonstrates that fixed costs remain constant as output volume increases.
  3. Demonstrates that total revenue is fixed as output volume increases.
  4. Demonstrates that per unit variable costs vary as output volume increases.
Correct answer: (B)
Demonstrates that fixed costs remain constant as output volume increases.

79. Which of the following provides the best definition of 'information'?

  1. Computer hardware
  2. Data processed for a purpose
  3. Computer software
  4. Transaction Data
Correct answer: (B)
Data processed for a purpose

80. Which of the following decision is least likely to be supported by a management information system?

  1. Company reorganisation
  2. Analysis of performance
  3. Allocating budgets
  4. Dealing with customer enquiries
Correct answer: (A)
Company reorganisation
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