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Chapter 7: Layout and flow

Multiple choice questions

Try the following questions to test your knowledge of this chapter. After you have answered the
questions, click on 'Submit Answers for Grading' to get your results.

1.

The lay out where the equipment, machinery, plant and people move as
necessary is known as:
Fixed-position layout
Product layout
Cell layout
Process layout

2.

A supermarket is usually positioned as:

Cell layout
Product layout
Process layout
Fixed-position layout

3.

A self-service cafeteria is usually positioned as:

Process layout
Product layout
Fixed-position layout
Cell layout

4.

A process with high variety and low volume is likely to have a:

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Process layout
Cell layout
Fixed-position layout
Product layout

5.

Which of the following is not an advantage of a long-thin line?

Controlled flow of materials or customers
Higher mix flexibility
Simple materials handling
Lower capital requirements

6.

Which of the following is usually considered a characteristic of a product

or line layout?
This layout can easily handle high variety but low volume
This layout can easily handle high volume but low variety
Transforming resources move to the work
Transforming resources are costly to maintain
This layout tends to be very flexible

7.

A product layout:
Moves resources to the place where the operation is to be carried
out
Allows a wide variety of products to be manufactured on the same
equipment
Groups transforming resources into dedicated cells
Involves locating the transforming resources entirely for the
convenience of the transformed resources
Is appropriate for low volume operations

8.

Cell layouts typically:

Are dominated by the transforming resources
Locate transforming resources entirely for the convenience of the
transformed resources
Are the most efficient form of process layout

Involve all the operations on a product being located adjacent to

each other
Cost more to run than other types of process layout

9.

Which of the following is not usually considered a characteristic of a fixed

position layout?
Fixed position layouts are often used for large or delicate products or
services
Fixed position layouts are able to offer high flexibility
Transforming resources often move to the work
The recipient of the process or the work being undertaken remain in
the same place
Transforming resources are grouped in cells

10 .

A company has fixed costs of 200,000 per annum. It costs 3.50 to

make each of its products. At what price would the company have to sell
its products to give a break-even volume of 50,000 units?
7.50
7.00
8.25
4.50
8.00

11 .

A company has fixed costs of 300,000 per annum. It costs 5.50 to

make each of its products. At what price would the company have to sell
its products to give a break-even volume of 20,000 units?
16.00
20.00
18.50
20.50
17.25

12 .

If the manufacturing cost of a product is $4.25, and the fixed overhead of

the company is $23,000 per annum, what would the selling price have to
be with a break-even volume of 14,000 units?
$8.12
$5.89
$5.53
$4.89
$5.27

13 .

A bank intends to offer its financial services via the Internet. Customers
with a personal computer and modem can request a transaction at any
time. The bank needs to lease the equipment needed at an annual cost
of 15,000. Each transaction costs the bank 0.56p. It plans to charge
customers 0.75p for each transaction regardless of size. In order for the
service to break even, how many customers must access the system
each year?
106,357
78,947
48,797
63,127
195,647

14 .

Some of the banks staff believe that just as many customers will use the
system if the transaction charge is raised to 1. At what volume would
the service then break even?
236,954
34,091
12,110
24,726
31,912

15 .

A bank intends to offer its financial services via the Internet. Customers
with a personal computer and modem can request a transaction at any
time. The bank needs to lease the equipment needed at an annual cost
of 20,000. Each transaction costs the bank 0.32p. It plans to charge
customers 0.75p for each transaction regardless of size. In order for the
service to break even, how many customers must access the system
each year?
38,956
46,511
96,478
123,759
69,045

16 .

Some of the banks staff believe that just as many customers will use the
system if the transaction charge is raised to 1. At what volume would
the service then break even?
17,864
29,412
67,928
84,890
21,697

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