2022 NEW PMP EXAM 4 PRACTICE QUESTIONS AND ANSWERS
A reason for the importance of capacity decisions is that capacity: - Limits the rate of outputs
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Affects operating costs
Is a major determinant of initial costs
Is a long-term commitment of resources
Constraints limit the performance of a process or system in achieving its goals. This is one of the categories of constraints discussed in your book: - Turnover
This statement is typically true with respect to design and effective capacity: - Design Capacity > Effective Capacity
A large gap between effective capacity and design capacity indicates that an organization is effectively using their resources. True or false? - False
At the break-even point: - Total cost equals total revenue.
CJ's Pizza in West Point, MS is looking at buying a new pizza oven. The oven has a fixed cost of $1,000 per month, variable costs are $4.50 per pizza, and revenue would be $9 per pizza. What is the break-even quantity for the new oven? - 1000/(9-4.50)=223
CJ's Pizza in West Point, MS is looking at buying a new pizza oven. The oven has a fixed cost of $1,000 per month, variable costs are $4.50 per pizza, and revenue would be $9 per pizza. What is the contribution margin for each pizza sold? - $4.50
Callaway Golf Company is considering adding a new line of Big Bertha drivers, which will require leading a new facility and equipment for $300.000 a month. Variable costs would be $225 per driver, and drivers would retail for $450 each. How many drivers must be sold in order to break even? - 300,000/(450-225)=1,334
Callaway Golf Company is considering adding a new line of Big Bertha drivers, which will require leading a new facility and equipment for $300.000 a month. Variable costs would be $225 per driver, and drivers would retail for $450 each. What would be the profit/loss if Callaway sold 2,000 drivers per month? - 2000(450-225)-300,000=$150,000 profit
Callaway Golf Company is considering adding a new line of Big Bertha drivers, which will require leading a new facility and equipment for $300.000 a month. Variable costs would be $225 per driver, and drivers would retail for $450 each. How many drivers would need to be sold for Callaway to realize a $375,000 profit? - Q=(375,000+300,000)/(450-225)=3,000
Callaway Golf Company is considering adding a new line of Big Bertha drivers, which will require leading a new facility and equipment for $300.000 a month. Variable costs would be $225 per driver, and drivers would retail for $450 each. Assuming Callaway leases the new facility, what would the minimum loss per month suffered by the company if the demand for their new driver dropped to zero? - $300,000
There are a number of ways to enhance the development of capacity strategies. Provision for future expansion in the original design would be best described as a strategy to: - Design flexibility into the system.
A landscaping operation mows an average of 16 yards per day. The operation has a design capacity of 25 yards per day and an effective capacity of 20 yards per day. What is the efficiency of the landscaping operation? - 16/20=80%
A landscaping operation mows an average of 16 yards per day. The operation has a design capacity of 25 yards per day and an effective capacity of 20 yards per day. What is the utilization of the landscaping operation? - 16/25=64%
Dollar amounts are often a poor measure of capacity. True or false? - True.
If the output rate is more than the optimal level, increasing the output rate results in increasing average per unit costs. This is an example of: - Diseconomies of scale. [Show Less]