Question 1

A product is currently made in a process-focused shop where fixed costs are $10,000 per year, and variable cost is $50 per unit. The firm sells the product for $250 per unit. What is the break-even point for this operation?

• 20 units

• 30 units

• 60 units

• 50 units

Question 2

A full-service restaurant is considering opening a new facility in a specific city. The table below shows its ratings of four factors at each of two potential sites.

Factor  Weight  Wind City  State Line

• Affluence of Local Population  .40  25  25

• Traffic Flow  .20  50  20

• Parking Availability  .10  30  40

• Growth Potential  .30  10  30

The score for Wind City is _____, and the score for State Line is _____.

• Wind City = 7.00; State Line = 7.25

• Wind City = 14; State Line = 14.50

• Wind City = 28; State Line = 29

• Wind City = 26; State Line = 27    

Question 3

ABC Cleaners' washing machines have a design capacity of 2,900 pounds a day. Because of scheduled maintenance of their equipment, management feels that only 2,500 pounds of clothes can be washed in a day. Yesterday, three employees were sick, and only 2,100 pounds of clothes were washed. What was the utilization of the washing machine yesterday?

• 25%

• 75%

• 72.4%

• 95%        

Question 4

ABC Cleaners' washing machines have a design capacity of 2,800 pounds a day. Because of scheduled maintenance of their equipment, management feels that only 2,600 pounds of clothes can be washed in a day. Yesterday, three employees were sick, and only 1,900 pounds of clothes were washed. What was the efficiency of the washing machine yesterday?

• 120%

• 73%

• 80.8%

• 107%      

Question 5

Breakeven is the number of units at which

• total revenue equals price times quantity.

• total revenue equals total cost.

• total revenue equals total fixed cost.

• total revenue equals total variable cost.          

Question 6

Actual output as a percent of design capacity is

• effective capacity.

• utilization.

• effectiveness.

• efficiency.  

Question 7

A location decision for an appliance manufacturer would tend to have a(n)

• education focus.

• labor focus.

• revenue focus.

• environmental focus.

• cost focus          

Question 8

Globalization of the location decision is the result of all of the following except

• market economics.

• higher differences in labor costs.

• ease of capital flow between countries.

• higher quality of labor overseas.

• more rapid, reliable travel and shipping.          

Question 9

Evaluating location alternatives by comparing their composite (weighted-average) scores involves

• a cost-volume analysis.

• a transportation model analysis.

• a linear regression analysis.

• a crossover analysis.

• None of the above          

Question 10

Which of the following is NOT a consideration for a good capacity decision?

• Forecast demand accurately

• Match technology increments and sales volume

• Find the worst operating size (volume)

• Build for change