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ISDS Exam 2 Chapter S7 Questions And Correct Answers
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ISDS Exam 2 Chapter S7 Questions And CorrectAnswers 2024-2025
What does the term rated capacity sometimes refer to? - ANSWER d. expected output
Effective capacity is the - ANSWER b. capacity a firm expects to achieve given the
current operating constraints
Which of the following would be considered an aggressive strategy in the demand
management of a service
where demand and capacity are not especially well matched? - ANSWER a. cheap rates
for weekend phone calls
c. Which of the following is a common way to manage capacity in the service sector?
ANSWER c. changes in staffing levels
If the demand for an organization's product or service exceeds the capacity of a new
facility, which of the following can be used to shift the demand to an existing facility?
ANSWER a. aggressive marketing
Adding a complementary product to what is currently being produced is a demand
management
strategy used when - ANSWER c. the existing product has seasonal or cyclical demand
An organization whose capacity is on that portion of the average unit cost curve that
falls as output
rises - ANSWER a. has a facility that is below optimum operating level and should build a
larger facility
, Of the four approaches to capacity expansion, the approach that "straddles" demand
a. uses incremental expansion
b. uses one-step expansion
c. in some periods leads demand, and in other periods lags
d. is most effective when demand is not growing, but is stable
e. Both a and c are correct.- ANSWER e. Both a and c are correct.
What are the four strategies for capacity expansion?- ANSWER a. average capacity with
incremental expansion
b. lead demand with incremental expansion
c. lag demand with incremental expansion
d. lead demand with one-step expansion
Which of the following is not true about capacity expansion?
a. "Average" capacity sometimes leads demand, sometimes lags it.
b. If "lagging" capacity is selected, excess demand can be met with overtime or
subcontracting.
c. Total cost comparisons are a fairly direct way of comparing the capacity alternatives.
d. Capacity can only be added in large chunks.
e. All of the above are true. - ANSWER d. Capacity can only be added in large chunks.
Break-even is the number of units at which - ANSWER e. total revenue equals total cost
Fixed Costs: - ANSWER are ordinarily constant w.r.t. volume, they can "step" upward if
volume increases result in additional fixed costs.
Which of the following costs would be incurred even if no units were produced? -
ANSWER d. building rental costs
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