COM Capacity Planning & Resource Management 1 — Questions and Answers
Question 1: What is the primary goal of capacity planning in operations management?
- To minimize workforce costs
- To ensure that production capacity meets current and future demand (Correct answer)
- To maximize equipment utilization at all times
- To reduce inventory levels
Correct answer: To ensure that production capacity meets current and future demand
Capacity planning aims to align production capability with demand to avoid both over-capacity and under-capacity situations.
Question 2: Which term refers to the maximum output a facility can produce under ideal, theoretical conditions?
- Effective capacity
- Actual output
- Design capacity (Correct answer)
- Rated capacity
Correct answer: Design capacity
Design capacity is the theoretical maximum output achievable under perfect operating conditions with no interruptions or inefficiencies.
Question 3: Utilization rate in capacity planning is correctly calculated as:
- Effective capacity divided by design capacity
- Actual output divided by design capacity (Correct answer)
- Actual output divided by effective capacity
- Design capacity divided by actual output
Correct answer: Actual output divided by design capacity
Utilization rate = Actual output / Design capacity, expressing how much of the theoretical maximum capacity is actually being used.
Question 4: Which of the following is a SHORT-TERM strategy for managing unexpected capacity shortfalls?
- Building a new manufacturing facility
- Outsourcing production to a third party (Correct answer)
- Investing in advanced manufacturing technology
- Acquiring a competitor's plant
Correct answer: Outsourcing production to a third party
Outsourcing is a short-term tactical solution to address capacity shortfalls quickly without long-term capital investment commitments.
Question 5: In capacity planning, what does the term 'bottleneck' refer to?
- A machine that consistently runs faster than scheduled
- The process step that limits overall system throughput (Correct answer)
- A supply chain disruption causing material shortages
- An excess capacity situation within a department
Correct answer: The process step that limits overall system throughput
A bottleneck is the constraint or limiting step that restricts the overall output rate of an entire production or service system.
Question 6: Which capacity strategy involves deliberately adding capacity in advance of anticipated demand growth?
- Lag strategy
- Match strategy
- Lead strategy (Correct answer)
- Reactive strategy
Correct answer: Lead strategy
The lead strategy proactively builds capacity ahead of projected demand, reducing the risk of lost sales due to insufficient capacity.
Question 7: What is the primary purpose of a Capacity Requirements Plan (CRP)?
- To schedule employee vacation time
- To verify sufficient capacity exists to execute the master production schedule (Correct answer)
- To determine optimal inventory reorder points
- To evaluate supplier delivery performance
Correct answer: To verify sufficient capacity exists to execute the master production schedule
CRP verifies that manufacturing resources are available in sufficient quantities to fulfill the requirements specified in the master production schedule.
COM Capacity Planning & Resource Management 1
What is the primary goal of capacity planning in operations management?