BUSOBA 3230 Exam 2 | Questions and Answers In a recent post, it was indicated that Tesla currently has the capacity to build 90k Model S/X and 400k Model 3/Y in Fremont, California, with an additional 150k capacity for Model 3s in Shanghai. Which of the following are true? (Select all that are co...
In a recent post, it was indicated that Tesla currently has the capacity to build 90k Model
S/X and 400k Model 3/Y in Fremont, California, with an additional 150k capacity for
Model 3s in Shanghai. Which of the following are true? (Select all that are correct)
These are input measures
They indicate the number of cars needed to break-even
These are productivity measures
These are output measures
They indicate the maximum number of cars that can be produced per year
They indicate the maximum utilization rate
Consider two generic strategies for expanding capacity:
Match industry examples with typical capacity expansion strategies and their associated
risks.
i. Apple
ii. Charmin
Apple- larger, infrequent increases
Charmin- small, frequent increases
Typically speaking, how are capital intensity, fixed costs, and economies of scale
related?
Higher capital intensity = greater fixed costs = greater opportunities of economies of
scale
Match the industry example with the typical demand uncertainty and capacity cushions.
restaurant
automotive industry
restaurant - high demand uncertainty, high capacity cushion
Southwest airlines has set utilization at 60% in response to COVID-19 pandemic. If an
airplane has 100 seats, how many seats will be sold?
60
, When lead time, L = 0 and demand is constant, the reorder point (ROP or R) =
_______units.
0
When is Q (order quantity) optimal?
annual holding cost = annual ordering cost
When lead time > 0 & constant and demand is constant, reorder point (ROP or R) =
R=dL
When lead-time > 0 and demand is NOT constant, reorder point (ROP or R) =
R=dL + SS
Finding the overall capacity level of capital-intensive resources to best support the firm's
long-term strategy.
Strategic capacity planning
The output that a system is capable of achieving over a period of time.
Capacity
Measure of how close the firm's current output rate is to its best operating level
(percent).
Capacity Utilization Rate
Idea that as the plant gets larger and volume increases, the average cost per unit drops.
At some point, the plant gets too large and cost per unit increases.
Economies of Scale
When multiple products can be produced at lower cost in combination than they can be
separately.
Economies of Scope
All the money that the system has invested in purchasing things it intends to sell
(Goldratt's definition)
Inventory
The demands for these items are unrelated to each other, or to activities that can be
predicted with certainty.
Independent demand
The need for an item is a direct result of the need for some other item, usually an item
of which it is a part. Also, when the demand for the item can be predicted with accuracy
due to a schedule or specific activity.
Dependent Demand
An inventory control model where the amount requisitioned is fixed and the actual
ordering is triggered by inventory dropping to a specified level of inventory.
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