Course: Operations Management Date: 1 Feb 2024

Name: __________________________ Roll Number: ___________________

Quiz 2 Duration: 20 mins Maximum marks: 20

1. _____ refers to the maximum quantity an operating unit can process over a given
period of time [0.5 mark]
a. Economic lot size
b. Economic order quantity
c. Capacity
d. Throughput
Ans: c
2. In reality, effective capacity _________ design capacity [0.5 mark]
a. <
b. >
c. =
Ans: a
3. Which of the following is true? [0.5 mark]
a. Increasing the capacity of the bottleneck has no effect on throughput
b. Increasing the capacity of the bottleneck increases throughput
c. Increasing the capacity of non-bottleneck increases throughput
d. Increasing the capacity of the first stage increases the throughput
Ans: b
4. Outsourcing some part of production works when capacity is _____ demand. [0.5
mark]
a. More than
b. Less than
c. Equal to
Ans: b
5. We can observe idle time in ____________ and waiting time before __________ [0.5
mark]
a. Bottleneck, Non bottleneck
b. Non bottleneck, Bottleneck

Ans: b
6. Which of the following would tend to reduce effective capacity? [0.5 mark]
a. Reduced changeover times
b. Fully trained employees
c. Improved production quality
d. Greater variety in the same product line
Ans: d
7. Excess capacity kept intentionally to overcome uncertain situations is called as
_______ [0.5 mark]
Ans: Cushion
8. When output rate is increased at the expense of unit cost then we experience [0.5
mark]
a. Economies of scale
b. Diseconomies of scale

Ans: b

9. If output is 60 units per day when the effective capacity and design capacity is 80 and
100 units per day respectively, then efficiency will be _______ % [1 mark]
Ans: 75%
10. If output is 60 units per day when the effective capacity and design capacity is 80 and
100 units per day respectively, then utilization will be _______ % [1 mark]
Ans: 60%
11. What is the breakeven quantity when fixed cost is $1200 per week, variable cost is $2
per unit and revenue is $6 per unit? _______ [1 mark]
Ans: 300
12. The owner of the woodworks is planning to purchase a hydraulic wood splitter at the
cost of $50000. He’ll be spending $100 in splitting each log while he can sell each
split log for $125. How many logs he need to split using machine to breakeven?
____________ [1 mark]
Ans: 2000
13. The first unit took 900 hours to complete and the second unit took only 720 hours. If
this learning rate continues how much time will be taken by the fourth unit? [2 marks]
Ans: 576 hours
14. The billiard ball maker periodically places order for resin. What should be the
economic order quantity if resin is consumed in the making process at the rate of 50
kg per day, $0.04 per day per kg is spent on carrying the resin in the inventory and
$100 is spent on each order? __________ [2 marks]
Ans: 500

EOQ =
√ 2 × Daily demand ×ordering cost per order
carrying cost per day per kg
=
√
2× 50× $ 100
$ 0.04
15. A work center makes two product varieties (details are given in the table). It operates
250 days per year in an 8-hour shift. Capacity cushion of 15% is maintained. Find
number of machines? [3 marks]
Item Product Product B
A
Annual demand forecasts 2000 6000
Standard processing time (hour/unit) 0.5 0.7
Average lot size 20 30
Standard setup time (hours) 0.25 0.4

Ans: 3.1 or 4 machines

16. Consider the following process. If demand is 4 units /hour,

a. What is the hourly capacity of the process?
Ans: 5

1st workstation = 60/12=5, 2nd workstation = 60/10=6, 3rd workstation =

60*2/20=6

b. What is the utilization of each workstation?

Ans: 80%,67%,67%
c. If a labour is given layoff at workstation 3, what will be the hourly capacity of
the process? Ans: 3

Workstat PT Labo
ion ur
min/
unit
1 12 1
2 10 1
3 20 2

PT=Processing time
[5 marks]