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Multiple Choice Quiz
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1.
Efficiency, in capacity terms, is the ratio of.
A)actual output to effective capacity.
B)actual output to design capacity.
C)effective capacity to actual output.
D)design capacity to effective capacity.
E)design capacity to actual capacity.
2.
Which of the following is the most difficult aspect of demand for capacity planners to deal with?
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)Random fluctuations in demand.
E)Irregular variations in demand.
3.
Which one of these does not enhance developing capacity alternatives?
A)Designing flexibility into the system.
B)Taking a "big picture" approach.
C)Smoothing capacity requirements.
D)Identifying the optimal operating level.
E)Focusing on quantitative factors.
4.
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.


A)I only.
B)I and II only.
C)II only.
D)II and III only.
E)I, II and III.
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


A)200
B)500
C)100
D)600
E)300
6.
The efficiency ratio must be larger than the utilization ratio because:
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.
7.
Which of the following is a false statement?
A)Capacity can be increased or decreased exactly as needed.
B)Capacity decisions affect operating costs.
C)Capacity decisions tend to involve long-term commitments.
D)Excess capacity can be damaging to a company.
E)Effective capacity is affected by scheduling problems.





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