Chapter 05 – Strategic Capacity Planning for Products and Services
73. What would be the county’s annual profit if they were to process 4,000 prisoners per year
at this new location?
74. How many prisoners would they have to process annually to break even at this new
location?
Chapter 05 – Strategic Capacity Planning for Products and Services
75. How many prisoners would they have to process annually to make a profit of $100,000 at
this new location?
76. If the holding area at this new location has design and effective capacities of 10,000 and
7,500 prisoners processed annually, respectively, and 5,000 prisoners will be processed per
year, what will be the utilization of the holding area?
Chapter 05 – Strategic Capacity Planning for Products and Services
77. If their holding area at this new location has design and effective capacities of 10,000 and
7,500 prisoners processed annually, respectively, and they plan to be 80% efficient in their
use of this space, how many prisoners does the county plan to process per year?
Doctor J. is considering purchasing a new blood analysis machine to test for HIV; it will cost
$60,000. He estimates that he could charge $25.00 for an office visit to have a patient’s blood
analyzed, while the actual cost of a blood analysis would be $5.00.
78. What would be his profit if he were to perform 5,000 HIV blood analyses?
Chapter 05 – Strategic Capacity Planning for Products and Services
79. How many HIV blood analyses would he have to perform in order to break even?
80. How many HIV blood analyses would he have to perform in order to make a profit of
$15,000?
Chapter 05 – Strategic Capacity Planning for Products and Services
81. If this new blood analysis machine has design and effective capacities of 6,000 and 5,000
blood analyses per year, respectively, and Dr. J. expects to perform 4,500 HIV blood analyses
each year, what will be the utilization of this machine?
82. If this new blood analysis machine has design and effective capacities of 6,000 and 5,000
blood analyses per year, respectively, and Dr. J. expects to be 80% efficient in his use of this
machine, how many HIV blood analyses does he plan to perform each year?
Chapter 05 – Strategic Capacity Planning for Products and Services
83. Operation X feeds into Operation Y. Operation X has an effective capacity of 55 units per
hour. Operation Y has an effective capacity of 50 units per hour. Increasing X’s effective
capacity to ensure that Y’s utilization is maximized would be an example of ________ a
constraint.
84. Operation X feeds into Operation Y. Operation X has an effective capacity of 55 units per
hour. Operation Y has an effective capacity of 50 units per hour. Finding a way to increase
Y’s effective capacity would be an example of ________ a constraint.
Chapter 05 – Strategic Capacity Planning for Products and Services
85. Which of the following makes using present value approaches in capacity decisions
difficult?
86. Suppose operation X feeds directly into operation Y. All of X’s output goes to Y, and Y
has no other operations feeding into it. X has a design capacity of 80 units per hour and an
effective capacity of 72 units per hour. Y has a design capacity of 100 units per hour. What is
Y’s maximum possible utilization?
Chapter 05 – Strategic Capacity Planning for Products and Services
87. Students at a major university must go through several registration steps. Officials have
observed that it is typically the case that the waiting line at the fee-payment station is the
longest. This would seem to suggest that the fee-payment station is the ___________ in the
student registration process.
Given the following data for a make or buy decision:
88. What are total costs to buy a quantity of 15,000 units per year?
Chapter 05 – Strategic Capacity Planning for Products and Services
89. What are total costs to make a quantity of 15,000 units per year?
90. For what quantity would you be indifferent between buying or making?
91. For what range of output would you prefer to buy?
Chapter 05 – Strategic Capacity Planning for Products and Services
92. For what range of output would you prefer to make?
93. Which alternative would you select for a quantity of 24,000 units per year?
94. What would be your total costs for the preferred alternative, for 32,000 units per year?
Chapter 05 – Strategic Capacity Planning for Products and Services
95. What would be your cost savings for the preferred alternative, for 32,000 units per year,
compared to the other alternative?
96. What is the break-even quantity (produced and sold)?
Chapter 05 – Strategic Capacity Planning for Products and Services
97. What are total revenues for the break-even quantity?
98. What are total costs for the break-even quantity?
99. What quantity would be required for a profit of $2,000?
Chapter 05 – Strategic Capacity Planning for Products and Services
100. What profit (loss) would there be for a quantity of 27,000?
101. What profit (loss) would there be for a quantity of 10,000?
102. What is the anticipated utilization?
Chapter 05 – Strategic Capacity Planning for Products and Services
103. What is the anticipated efficiency?