MSIS 3223 Exam 2 (Ch. 5, 8, 9) Questions
With Complete Solutions
Course
MSIS 3223
1. What is the primary goal of capacity planning in operations management?
A) Minimize production costs
B) Ensure that a system can meet current and future demand
C) Maximize employee productivity
D) Reduce the number of suppliers
Answer: B) Ensure that a system can meet current and future demand
Explanation: Capacity planning involves determining the necessary production capacity to meet
demand efficiently while avoiding underutilization or overloading of resources.
2. A manufacturer operates at an effective capacity of 90% and has a design capacity of
1,200 units per day. What is the actual output if the efficiency is 85%?
Solution:
o Effective capacity = 1,200 × 0.90 = 1,080 units
o Actual output = 1,080 × 0.85 = 918 units
o Final Answer: 918 units per day
3. What is a key characteristic of an intermittent processing system?
A) High-volume, low-variety production
B) Low-volume, high-variety production
C) Continuous flow of standardized products
D) Highly automated assembly lines
Answer: B) Low-volume, high-variety production
Explanation: Intermittent processing systems, such as job shops, produce customized products
in small batches, leading to high flexibility but lower efficiency.
,4. A company uses a fixed-order quantity inventory model with a demand of 10,000 units
per year, an ordering cost of $50 per order, and a holding cost of $2 per unit per year. What
is the Economic Order Quantity (EOQ)?
Solution:
The EOQ formula is:
EOQ=2DSHEOQ = \sqrt{\frac{2DS}{H}}EOQ=H2DS
Where:
o D=10,000D = 10,000D=10,000 (annual demand)
o S=50S = 50S=50 (ordering cost)
o H=2H = 2H=2 (holding cost per unit per year)
EOQ=2(10,000)(50)2=500,000=707.11EOQ = \sqrt{\frac{2(10,000)(50)}{2}} = \sqrt{500,000}
= 707.11EOQ=22(10,000)(50)=500,000=707.11
Final Answer: 707 units
5. What is the primary purpose of Just-In-Time (JIT) manufacturing?
A) Increase inventory levels
B) Reduce waste and improve efficiency
C) Maximize supplier dependency
D) Increase setup times
Answer: B) Reduce waste and improve efficiency
Explanation: JIT minimizes waste by producing only what is needed, when it is needed,
reducing excess inventory and improving operational efficiency.
6. A production line operates for 8 hours per day and produces 1,600 units per shift. If the
cycle time per unit is 18 seconds, what is the required number of workstations to balance
the line?
Solution:
o Total available time per day = 8 × 60 × 60 = 28,800 seconds
o Cycle time per unit = 18 seconds
, o Number of workstations = Total available time ÷ (Cycle time × Total output)
Workstations=28,800(18×1,600)\text{Workstations} = \frac{28,800}{(18 ×
1,600)}Workstations=(18×1,600)28,800 =28,80028,800=1= \frac{28,800}{28,800} =
1=28,80028,800=1
Final Answer: 1 workstation
7. What is the primary difference between a push and pull production system?
A) Push systems are driven by actual demand, while pull systems rely on forecasts
B) Push systems rely on forecasts, while pull systems are driven by actual demand
C) Push systems use JIT, while pull systems use MRP
D) Push systems are more efficient than pull systems
Answer: B) Push systems rely on forecasts, while pull systems are driven by actual demand
Explanation: A push system (MRP) produces based on demand forecasts, whereas a pull
system (JIT) produces only in response to actual demand.
8. What is the break-even quantity if the fixed costs are $20,000, the selling price per unit is
$50, and the variable cost per unit is $30?
Solution:
The break-even quantity formula is:
Q=FP−VQ = \frac{F}{P - V}Q=P−VF
Where:
o F=20,000F = 20,000F=20,000 (fixed costs)
o P=50P = 50P=50 (price per unit)
o V=30V = 30V=30 (variable cost per unit)
Q=20,00050−30=20,00020=1,000 unitsQ = \frac{20,000}{50 - 30} = \frac{20,000}{20} = 1,000
\text{ units}Q=50−3020,000=2020,000=1,000 units
Final Answer: 1,000 units
With Complete Solutions
Course
MSIS 3223
1. What is the primary goal of capacity planning in operations management?
A) Minimize production costs
B) Ensure that a system can meet current and future demand
C) Maximize employee productivity
D) Reduce the number of suppliers
Answer: B) Ensure that a system can meet current and future demand
Explanation: Capacity planning involves determining the necessary production capacity to meet
demand efficiently while avoiding underutilization or overloading of resources.
2. A manufacturer operates at an effective capacity of 90% and has a design capacity of
1,200 units per day. What is the actual output if the efficiency is 85%?
Solution:
o Effective capacity = 1,200 × 0.90 = 1,080 units
o Actual output = 1,080 × 0.85 = 918 units
o Final Answer: 918 units per day
3. What is a key characteristic of an intermittent processing system?
A) High-volume, low-variety production
B) Low-volume, high-variety production
C) Continuous flow of standardized products
D) Highly automated assembly lines
Answer: B) Low-volume, high-variety production
Explanation: Intermittent processing systems, such as job shops, produce customized products
in small batches, leading to high flexibility but lower efficiency.
,4. A company uses a fixed-order quantity inventory model with a demand of 10,000 units
per year, an ordering cost of $50 per order, and a holding cost of $2 per unit per year. What
is the Economic Order Quantity (EOQ)?
Solution:
The EOQ formula is:
EOQ=2DSHEOQ = \sqrt{\frac{2DS}{H}}EOQ=H2DS
Where:
o D=10,000D = 10,000D=10,000 (annual demand)
o S=50S = 50S=50 (ordering cost)
o H=2H = 2H=2 (holding cost per unit per year)
EOQ=2(10,000)(50)2=500,000=707.11EOQ = \sqrt{\frac{2(10,000)(50)}{2}} = \sqrt{500,000}
= 707.11EOQ=22(10,000)(50)=500,000=707.11
Final Answer: 707 units
5. What is the primary purpose of Just-In-Time (JIT) manufacturing?
A) Increase inventory levels
B) Reduce waste and improve efficiency
C) Maximize supplier dependency
D) Increase setup times
Answer: B) Reduce waste and improve efficiency
Explanation: JIT minimizes waste by producing only what is needed, when it is needed,
reducing excess inventory and improving operational efficiency.
6. A production line operates for 8 hours per day and produces 1,600 units per shift. If the
cycle time per unit is 18 seconds, what is the required number of workstations to balance
the line?
Solution:
o Total available time per day = 8 × 60 × 60 = 28,800 seconds
o Cycle time per unit = 18 seconds
, o Number of workstations = Total available time ÷ (Cycle time × Total output)
Workstations=28,800(18×1,600)\text{Workstations} = \frac{28,800}{(18 ×
1,600)}Workstations=(18×1,600)28,800 =28,80028,800=1= \frac{28,800}{28,800} =
1=28,80028,800=1
Final Answer: 1 workstation
7. What is the primary difference between a push and pull production system?
A) Push systems are driven by actual demand, while pull systems rely on forecasts
B) Push systems rely on forecasts, while pull systems are driven by actual demand
C) Push systems use JIT, while pull systems use MRP
D) Push systems are more efficient than pull systems
Answer: B) Push systems rely on forecasts, while pull systems are driven by actual demand
Explanation: A push system (MRP) produces based on demand forecasts, whereas a pull
system (JIT) produces only in response to actual demand.
8. What is the break-even quantity if the fixed costs are $20,000, the selling price per unit is
$50, and the variable cost per unit is $30?
Solution:
The break-even quantity formula is:
Q=FP−VQ = \frac{F}{P - V}Q=P−VF
Where:
o F=20,000F = 20,000F=20,000 (fixed costs)
o P=50P = 50P=50 (price per unit)
o V=30V = 30V=30 (variable cost per unit)
Q=20,00050−30=20,00020=1,000 unitsQ = \frac{20,000}{50 - 30} = \frac{20,000}{20} = 1,000
\text{ units}Q=50−3020,000=2020,000=1,000 units
Final Answer: 1,000 units
