Capacity Planning Problems
Capacity Planning Problems
Capacity Planning Problems
The plant is
designed to produce 400 tumblers per hour, and there is 1 eight-
hour shift per working day. However, the plant does not operate
for the full 8 hours: the employees take two 15-minute breaks in
CAPACITY PLANNING PROBLEMS
each shift, one in the first 4 hours and one in the second 4 hours,
the first 30 minutes of the shift are spent raising the kilns to the
required temperature for firing glass. The plant usually produces
about 10,000 tumblers per five-day workweek. Answer the
following questions by adjusting the data to one eight-hour
shift.
steering wheel and two wheels. Demand for the bicycles is 500 a
Labor $60.25
Raw material 25.70
Purchased component 21.50
Variable overhead 17.50
The fixed costs total $300,000 per year. Perform a breakeven analysis
of this company.
7. Changes in capacity may lead, lag, or straddle the demand. True (Capacity
planning, moderate)
9. Fixed costs are those costs that continue even if no units are produced.
True (Break-even analysis, moderate)
10. Break-even analysis identifies the volume at which fixed costs and revenue
are equal. False (Break-even analysis, moderate)
11. Break-even analysis is a powerful analytical tool, but is useful only when
the organization produces a single product. False (Break-even analysis,
moderate)
12. A decision tree indicates at what quantity profit changes from negative to
positive. False (Break-even analysis, moderate)
13. A decision tree for analyzing capacity would have future demands or
market favorability as the decision alternatives. False (Applying decision trees
to capacity decisions, moderate)
14. One limitation of the net present value approach to investments is that
investments with identical net present values may have very different cash
flows. True (Applying investment analysis to strategy-driven investments,
moderate) 173
CHAPTER 4: FORECASTING
TRUE/FALSE
1.A naïve forecast for September sales of a product would be equal to the forecast for August.
False (Time-seriesforecasting, moderate)
2.The forecasting time horizon and the forecasting techniques used tend to vary over the life cycle of a
product.
True (What is forecasting? moderate)
3.Demand (sales) forecasts serve as inputs to financial, marketing, and personnel planning.
True (Types of forecasts, moderate)
4.Forecasts of individual products tend to be more accurate than forecasts of product families.
False (Seven steps in the forecasting system, moderate)
5.Most forecasting techniques assume that there is some underlying stability in the system.
True (Seven steps in the forecasting system, moderate)
6.The sales force composite forecasting method relies on salespersons’ estimates of expected
sales.
True (Forecasting approaches, easy)
7.A time-seriesmodel uses a series of past data points to make the forecast.
True (Forecasting approaches, moderate)
8.The quarterly "make meeting" of Lexus dealers is an example of a sales force composite
forecast.
True (Forecasting approaches, easy)
10.A naive forecast for September sales of a product would be equal to the sales in August.
True (Time-seriesforecasting, easy)
11.One advantage of exponential smoothing is the limited amount of record keeping involved.
True (Time-seriesforecasting, moderate)
12.The larger the number of periods in the simple moving average forecasting method, the greater the
method's responsiveness to changes in demand.
False (Time-seriesforecasting, moderate)
13.Forecast including trend is an exponential smoothing technique that utilizes two smoothing
constants: one for the average level of the forecast and one for its trend.
True (Time-seriesforecasting, easy)
http://www.studfiles.ru/preview/5330404/page:8/
http://content.yudu.com/Library/A30z05/OperationsManagement/reso
urces/5.htm
https://saylordotorg.github.io/text_managerial-accounting/s10-02-
cost-volume-profit-analysis-fo.html