BUSOBA 3230 Exam 2
In a recent post, it was indicated that Tesla currently has the capacity to build 90k Model
S/X and 400k Model 3/Y in Fremont, California, with an additional 150k capacity for
Model 3s in Shanghai. Which of the following are true? (Select all that are correct)
These are input measures
They indicate the number of cars needed to break-even
These are productivity measures
These are output measures
They indicate the maximum number of cars that can be produced per year
They indicate the maximum utilization rate
Consider two generic strategies for expanding capacity:
(1) small, frequent increases
(2) larger, infrequent increases
Match industry examples with typical capacity expansion strategies and their associated
risks.
i. Apple
ii. Charmin
Apple- larger, infrequent increases
Charmin- small, frequent increases
Typically speaking, how are capital intensity, fixed costs, and economies of scale
related?
Higher capital intensity = greater fixed costs = greater opportunities of economies of
scale
Match the industry example with the typical demand uncertainty and capacity cushions.
restaurant
automotive industry
restaurant - high demand uncertainty, high capacity cushion
automotive - lower demand uncertainty, lower capacity cushion
Southwest airlines has set utilization at 60% in response to COVID-19 pandemic. If an
airplane has 100 seats, how many seats will be sold?
60