ISDS 3115 Ch.7

kkeene1's version from 2011-03-30 22:38

Section 1

Question Answer
Design Capacitytheoretical maximum output of a system in a given period under ideal conditions
Expected OutputRated Capacity
Price Changesuseful when matching the level of demand to the capacity of a facility
Increasing Capacityredesign a product in order to get more throughput
Changes in CapacityMay lead, lag or straddle the demand
Fixed costcost that continue even if no units are produced
NPV Approach to Investmentsone limitation is that investments with identical NPVs may have VERY different cash flows
Effective Capacitycapacity a firm expects to achieve given the current operating constraints
Common Way to Manage Capacity in ServiceChange in staffing levels

Section 2

Question Answer
Aggressive MarketingIf demand exceeds capacity at a new facility, an organization can use this to move demand to an existing facility
Break-evenTotal Revenue=Total Cost