3. Operations

Capacity — Quiz

Test your understanding of capacity with 5 practice questions.

Practice Questions

Question 1

A business is operating at $60\%$ capacity utilisation. To improve its efficiency and reduce unit costs, which of the following actions would be most effective in the long term?

Question 2

A business experiences predictable seasonal peaks and troughs in demand. Which capacity management strategy is most appropriate for managing the 'trough' period to minimize costs?

Question 3

If a business has total fixed costs of $$ \$50,000 $ and produces $ 2,000 $ units at $ 80\% $ capacity utilisation, what would be the fixed cost per unit if it increased production to $ 2,500 $ units at $ 100\% $$ capacity utilisation, assuming fixed costs remain constant?

Question 4

Which of the following best describes the concept of 'optimal capacity utilisation'?

Question 5

A business is considering investing in new technology that will automate part of its production process. This decision is primarily related to which aspect of capacity management?