Production Operations Management Quiz 2 1. -------------------- is the maximum output rate or service capacity an operation, process or facility. a. Efficiency b. Effective Capacity c. Design Capacity 2. -------------- is the rate of output actually achieved. a. Actual Output b. Design Capacity c. Utilization 3. A knowledge of economies and diseconomies of scale is ----------a. Important for operations manager b. Not Important for operations manager c. It makes no difference 4. If the output rate is less than the optimal level, increasing output rate results in -------------------- average unit cost a. Increasing b. Decreasing c. Stabilizing 5. As the output is increased, the unit cost is decreased because a. Of external factors b. Because there are more units to absorb the fixed costs c. None of the above 6. as the general capacity of the plant increased, the optimal output rate increases and the minimal cost for the optimal rate a. Decreases b. Increases c. It has no effect with the output rate 7. The primary purpose of cost- volume analysis is a. To estimate the income of an organization b. To analyze initial costs incurred under different operating conditions c. Both A and B 8. variable costs vary ---------------- with volume of output a. Inversely b. Directly 9. -------------- refers to the way, an organization chooses to produce its goods or services a. Process selection b. Capacity planning c. Cost volume analysis 10. Ice cream is an example of a. Batch processing b. Job shop c. Repetitive processing Summer 2016