|1 |Which of the following is NOT a strategy for managing supply? |
| | |
|A) |Developing complementary services |
|B) |Using part-time employees |
|C) |Forecasting demand |
|D) |Scheduling employee shifts |

|2 |Which of the following is NOT a measure of the capacity of a restaurant? |
| | |
|A) |number of tables |
|B) |number of waiters |
|C) |number of items on the menu |
|D) |number of chefs |

|3 |What is meant by the term ‘capacity’? |
|A) |The limit of output over a period of time |
|B) |The amount of work normally undertaken over a period of time |
|C) |Maximum level of demand experienced over a period of time |
|D) |Maximum level of value added activity over a period of time |

|4 |Utilisation is : |
|A) |Uptime/effective capacity |
|B) |Actual output/effective capacity |
|C) |Actual output/design capacity |
|D) |Downtime/effective capacity |

|5 |What is meant by ‘yield management’? |
|A) |Overbooking capacity to ensure that all capacity is filled at all times |
|B) |The maximisation of profit through capacity, demand and pricing policies |
|C) |Expanding the operation at periods of high demand in order to yield more sales revenue |
|D) |Encouraging growth in demand during periods of low demand and restraining it during periods of high demand |

|6 |Over-booking seats by an airline is an approach used to maximise yield. |
|A) |True |
|B) |False |

|7 |Capacity levels in excess of demand could cause under-utilisation. |
|A) |True |
|B) |False |

|8 |Which of the following is NOT a measure of utilisation? |
|A) |Load factor for aircraft |
|B) |Number of hours available for production |
|C) |Productive time in a factory |
|D) |Room occupancy level in hotels |

|9 |One micro operation acting as a constraint on capacity may be termed a : |
|A) |Cost centre |
|B) |Non-viable process |
|C) |Bottleneck |
|D) |Resource limitation |

|10 |Which of the following is not a technique of demand management in services scheduling? |
|A) |Appointments |
|B) |First-come, first-served |
|C) |“early bird” discounts |
|D) |All of the above |

|11 |Which one of the following conditions favours a level strategy for manufacturing firms. |
|A) |High availability of workers |
|B) |Short shelf life of inventory |
|C) |Highly automated equipment and a make-to-stock strategy |
|D) |High inventory-holding cost |

|12 |Which one of the following conditions can make a level strategy the most attractive? |
|A) |The cost of changing the workforce levels is low |
|B) |Products complementary to the existing products can be produced easily with the given facilities |
|C) |The shelf life of the goods being produced is limited |
|D) |Inventory-holding costs are high |

|13 |Which one of the following reactive alternatives would typically be best to implement a chase strategy for |
| |a manufacturing firm? |
|A) |Use creative pricing to modify demand |
|B) |Build anticipation inventory to absorb the variability in demand |
|C) |Increase overtime to satisfy peaks in demand |
|D) |Use promotional campaigns to boost demand |

|14 |Which one of the following actions applies to a level strategy? |
|A) |Hire workers to increase production output to match increases in demand requirements. |
|B) |Build anticipation inventory to meet the variability in demand |
|C) |Decrease promotional campaigns to boost demand production output to match any decreases in demand |
| |requirements. |
|D) |Use promotional campaigns to boost demand |

|15 |Dependence on an external source of supply is found in which of the following aggregate planning |
| |strategies? |
|A) |Varying production rates through overtime or idle time |
|B) |Subcontracting |
|C) |Using part-time workers |
|D) |Back ordering during high demand periods |

|16 |Which of the following is consistent with a chase strategy? |
|A) |Vary production levels to meet demand requirements |
|B) |Vary production levels and work force to meet demand requirements |
|C) |Little or no use of inventory to meet demand requirements |
|D) |All of the above |

|17 |Adding a complementary product to what is currently being produced is a demand management strategy used |
| |when |
|A) |Demand exceeds capacity |
|B) |Capacity exceeds demand for a product which has stable demand |
|C) |The existing product has seasonal or cyclical demand |
|D) |Price increases have failed to bring about demand management |

|18 |The primary cost associated with the level production strategy is the |
|A) |Cost of subcontracting |
|B) |Cost of holding inventory |
|C) |Cost of hiring and firing workers |
|D) |Cost of overtime |

|19 |Efficiency is measure by : |
|A) |Design capacity / Actual output |
|B) |Effective capacity / Design capacity |
|C) |Actual output / Design capacity |
|D) |Actual output / Effective capacity |

|20 |What type of capacity plan focuses on adjusting capacity to meet variations in demand? |
|A) |Level capacity plan |
|B) |Aggregated capacity plan |
|C) |Chase demand plan |
|D) |Demand management |

|21 |High inventory is often associated with level capacity plans |
|A) |True |
|B) |False |

|22 |Which of the following is NOT a difference between service and manufacturing capacity management |
| | |
|A) |service quality is easier to measure |
|B) |service demand is harder to predict |
|C) |variety of services is greater |
|D) |services must be available at the right time and place |

|23 |In chase demand planning |
| | |
|A) |capacity and demand are dynamically adjusted |
|B) |capacity levels are adjusted to match demand |
|C) |capacity is made available to cover base demand only |
|D) |a constant level of output is maintained with unaltered demand |

|24 |In managing demand |
| | |
|A) |the demand pattern is changed to match available capacity |
|B) |capacity levels are adjusted to match demand |
|C) |capacity is made available to cover base demand only |
|D) |a constant level of output is maintained with unaltered demand |

|25 |Capacity planning for services is |
| | |
|A) |adjusting customer service levels to maximise profitability |
|B) |a trade-off between customer service levels and systems utilisation |
|C) |utilising capacity to maximise revenue |
|D) |a trade-off between customer service levels and revenue |

|26 |Capacity is NOT lost through |
| | |
|A) |poor demand management |
|B) |machine breakdowns |
|C) |Long set-ups |
|D) |Inadequate and poorly trained workforce |

|27 |Purpose of differential pricing is to: |
| | |
|A) |Make peak period usage unattractive |
|B) |Charge customers according to their ability to pay |
|C) |Make off-peak usage attractive |
|D) |Adjust capacity to demand |

|28 |When managing service capacity and customer demand, a manager can incorporate each of the following |
| |strategies, except: |
| | |
|A) |Smoothing customer demand by offering price incentives |
|B) |Scheduling staff to meet variations in forecasted customer demand |
|C) |Decreasing customer participation in the service process |
|D) |Promoting off-peak use of facilities |

|29 |Ways of reconciling capacity and demand includes: |
|A) |Absorbing demand |
|B) |Adjusting output to match demand |
|C) |Changing demand |
|D) |All of the above |