Essential Formulas in Operations Management Quiz

1. What are the two capacity formulas?

Efficiency = (Actual output / effective capacity) X 100, Utilization = (Design Capacity / Actual Output) X 100

Efficiency = (Effective capacity / Actual output) X 100, Utilization = (Actual Output / Design Capacity) X 100

Efficiency = (Design capacity / Actual output) X 100, Utilization = (Actual Output / Effective Capacity) X 100

Efficiency= (Actual output/ effective capacity) X 100Utilization= (Actual Output/ Design Capacity) X 100

Capacity formulas involve calculations related to actual output, effective capacity, and design capacity. It is important to understand the correct way to calculate efficiency and utilization in order to effectively manage capacities in operations.

Explanation

Capacity formulas involve calculations related to actual output, effective capacity, and design capacity. It is important to understand the correct way to calculate efficiency and utilization in order to effectively manage capacities in operations.

2. What is the formula to find the CYCLE TIME?

Cycle Time = Total output rate / Operating Time per day

Cycle Time = Desired output rate / Operating Time per day

Cycle Time= Operating Time per day / Desired output rate

Cycle Time = Operating Time per day * Desired output rate

The correct formula for Cycle Time is a division of Operating Time per day by Desired output rate to determine the time taken to complete one cycle of production.

Explanation

The correct formula for Cycle Time is a division of Operating Time per day by Desired output rate to determine the time taken to complete one cycle of production.

3. What formula is used to find the output rate?

Output= Operating time per day/ cycle time

Output = Operating time per day * cycle time

Output = Operating time per day - cycle time

Output = Operating time per day + cycle time

The output rate is calculated by dividing the operating time per day by the cycle time. This formula helps to determine how many units can be produced within a given time frame.

Explanation

The output rate is calculated by dividing the operating time per day by the cycle time. This formula helps to determine how many units can be produced within a given time frame.

4. What is the formula to find Reorder Point (ROP)?

ROP = d - LT

ROP = d / LT

ROP = d + LT

ROP= d X LT d = demand rate LT= Lead time in days or weeks

The correct formula to find Reorder Point (ROP) is ROP = d X LT where d represents the demand rate and LT represents the lead time in days or weeks. Multiplying the demand rate by the lead time gives the point at which inventory should be reordered to prevent stockouts.

Explanation

The correct formula to find Reorder Point (ROP) is ROP = d X LT where d represents the demand rate and LT represents the lead time in days or weeks. Multiplying the demand rate by the lead time gives the point at which inventory should be reordered to prevent stockouts.

5. What formula is used to find the safety stock?

ROP= Expected demand - Safety Stock

ROP= Safety Stock - Expected demand

ROP= Safety Stock / Expected demand

The correct formula to find safety stock is ROP= Expected demand during lead time + Safety Stock, which takes into account the expected demand and the additional stock required for safety measures.

Explanation

The correct formula to find safety stock is ROP= Expected demand during lead time + Safety Stock, which takes into account the expected demand and the additional stock required for safety measures.

6. What formula is used to find the total revenue?

Total revenue = R / Q

Total revenue = R - Q

Total revenue= R X Q

Total revenue = R + Q

The correct formula to find total revenue is the product of the unit price (R) and quantity (Q) sold, not addition, subtraction, or division.

Explanation

The correct formula to find total revenue is the product of the unit price (R) and quantity (Q) sold, not addition, subtraction, or division.