13. Blyrie Inc., a sports goods manufacturing company, follows a policy that inv

Question

13. Blyrie Inc., a sports goods manufacturing company, follows a policy that involves manufacturing only when the demand exceeds the amount of goods already manufactured. Given this information, Blyrie Inc. most likely uses a ____ to expand its capacity.

a. capacity lead strategy

b. capacity lag strategy

c. capacity straddle strategy

d. capacity reduction strategy

e. capacity increase strategy

14. Let’s consider this situation; a firm will encounter short periods of over- and under- utilization with primarily, which of the following capacity expansion approaches?

a. One large capacity increase

b. Small capacity increases that match and then immediately lags demand

c. Small capacity increases that lead demand

d. Small capacity increases that lag demand in some cases

e. Small capacity increases that match demand

15. Consider this from a capacity planning and management perspective: a doctor's office will charge no-show patients $30 if they did not cancel their appointment 24 hours ahead of the appointment primarily because:

a. insurance will pay the no-show fee anyway unless the patient did not have a viable excuse.

b. the appointment time and associated revenue is perishable, and the doctor may lose revenue.

c. the doctor's office does a poor job of forecasting demand but has to make up the cost in some manner; insurance not withstanding.

d. the no-show price of $30 can be added to medical fees for reimbursement.

Explanation / Answer

13. Option b. capacity lag strategy

Explanation: Incapacity lead strategy, more goods are produced only when the demand exceeds the already produced quantity. Under the capacity lead strategy, capacity is aggressively increased to produce more in anticipation of higher demand.

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