Cost Accounting Quiz: Identifying Constraints
20 questions · exam conditions
0:00
Identifying ConstraintsQuestion 1 of 20

A manager at a furniture factory observes the production line for a popular chair model, which flows through four stations: Cutting, Sanding, Assembly, and Finishing. The manager notes that a large pile of wooden parts consistently accumulates before the Assembly station. Operators at the Finishing station are frequently waiting for chairs to arrive. The Cutting and Sanding stations appear to be working steadily with minimal downtime and no significant buildup of work-in-process inventory before them.

Based on these qualitative observations, which station is the most likely bottleneck in the production process?

The Finishing station, because its operators are frequently idle.
The Assembly station, because work-in-process inventory is accumulating before it.
The Cutting station, because it is the first step and dictates the pace for all subsequent stations.
The Sanding station, as it must keep pace with the Cutting station to prevent delays.
← Back to quizzes

Cost Accounting Quiz

Cost Accounting Quiz: Identifying Constraints

Practice Identifying Constraints in Cost Accounting with focused quiz questions that help you check what you know, review explanations, and build confidence with test-style prompts.

What this quiz covers

This quiz focuses on Identifying Constraints, giving you a quick way to practice the rules, question types, and explanations that matter most for Cost Accounting.

How to use this quiz

Try each quiz question before looking at the correct answer. Use the explanations to review missed ideas, then come back to similar questions until the pattern feels familiar.

All questions

Question 1

A manager at a furniture factory observes the production line for a popular chair model, which flows through four stations: Cutting, Sanding, Assembly, and Finishing. The manager notes that a large pile of wooden parts consistently accumulates before the Assembly station. Operators at the Finishing station are frequently waiting for chairs to arrive. The Cutting and Sanding stations appear to be working steadily with minimal downtime and no significant buildup of work-in-process inventory before them.

Based on these qualitative observations, which station is the most likely bottleneck in the production process?

  1. The Finishing station, because its operators are frequently idle.
  2. The Assembly station, because work-in-process inventory is accumulating before it. (correct answer)
  3. The Cutting station, because it is the first step and dictates the pace for all subsequent stations.
  4. The Sanding station, as it must keep pace with the Cutting station to prevent delays.
Explanation: The primary qualitative indicator of a bottleneck is the accumulation of work-in-process (WIP) inventory just before a specific process step. The large pile of parts before the Assembly station signifies that the preceding stations (Cutting and Sanding) are producing faster than the Assembly station can process. The idleness at the Finishing station is a symptom of the bottleneck at Assembly, as it is being starved of work.

Question 2

A production process flows sequentially through four departments: Fabrication, Welding, Painting, and Assembly. The maximum processing rates for each department are as follows:

  • Fabrication: 20 units per hour
  • Welding: 4 minutes per unit
  • Painting: 18 units per hour
  • Assembly: 16 units per hour

Which department represents the bottleneck for this production process?

  1. Fabrication
  2. Welding (correct answer)
  3. Painting
  4. Assembly
Explanation: To identify the bottleneck, all processing rates must be in the same units. The rates for Fabrication, Painting, and Assembly are already in units per hour. The rate for Welding must be converted. Welding rate: 4 minutes per unit. To convert this to units per hour, divide the number of minutes in an hour by the minutes per unit: 60 minutes/hour / 4 minutes/unit = 15 units per hour. Now compare the rates:
  • Fabrication: 20 units/hour
  • Welding: 15 units/hour
  • Painting: 18 units/hour
  • Assembly: 16 units/hour
The bottleneck is the process with the lowest processing rate. The lowest rate is 15 units per hour, which corresponds to the Welding department.

Question 3

A company produces two products, Lux and Stan, and faces two potential constraints: 4,000 hours of skilled labor and 7,000 pounds of a special alloy. Production requirements per unit are:

  • Lux: 2 labor hours, 5 pounds of alloy
  • Stan: 4 labor hours, 3 pounds of alloy

Management has decided on a production plan of 600 units of Lux and 700 units of Stan.

Given this production plan, which statement accurately describes the company's constraint situation?

  1. Both skilled labor and the special alloy are binding constraints limiting further production.
  2. The special alloy is the only binding constraint; there is excess skilled labor capacity.
  3. Skilled labor is the only binding constraint; there is a surplus of the special alloy. (correct answer)
  4. Neither resource is a binding constraint; there is excess capacity for both labor and alloy.
Explanation: First, calculate the total resources required for the production plan. Skilled Labor Required:
  • Lux: 600 units * 2 hours/unit = 1,200 hours
  • Stan: 700 units * 4 hours/unit = 2,800 hours
  • Total Labor: 1,200 + 2,800 = 4,000 hours
Special Alloy Required:
  • Lux: 600 units * 5 lbs/unit = 3,000 lbs
  • Stan: 700 units * 3 lbs/unit = 2,100 lbs
  • Total Alloy: 3,000 + 2,100 = 5,100 pounds
Next, compare required resources to available resources:
  • Skilled Labor: 4,000 required vs. 4,000 available. This resource is fully utilized and is a binding constraint.
  • Special Alloy: 5,100 required vs. 7,000 available. There is a surplus of 1,900 pounds. This is not a binding constraint. Therefore, skilled labor is the only binding constraint for this specific production plan.

Question 4

A management consulting firm has 5 partners, 15 senior consultants, and 40 junior analysts. Each employee has 1,600 billable hours available per year. The firm's typical project mix requires hours from each level in a ratio of 1 partner hour to 4 senior hours to 10 junior hours. The firm has enough project demand to utilize all of its available staff hours.

Which employee level represents the firm's bottleneck for completing projects?

  1. Senior consultants, as the demand for their hours exceeds supply relative to other roles. (correct answer)
  2. Junior analysts, because they are required to perform the most hours on a typical project.
  3. Partners, because they are the fewest in number.
  4. There is no bottleneck, as the firm has staff at all required levels to complete projects.
Explanation: To find the bottleneck, we must determine how many 'project units' (defined by the 1:4:10 ratio) each staff level can support. Total Available Hours:
  • Partners: 5 * 1,600 = 8,000 hours
  • Seniors: 15 * 1,600 = 24,000 hours
  • Juniors: 40 * 1,600 = 64,000 hours
'Project Units' Supported by Each Level:
  • Partners: 8,000 hours / (1 hour/unit) = 8,000 project units
  • Seniors: 24,000 hours / (4 hours/unit) = 6,000 project units
  • Juniors: 64,000 hours / (10 hours/unit) = 6,400 project units
The senior consultants can only support 6,000 'project units', which is the lowest amount. Therefore, the availability of senior consultants is the bottleneck that limits the firm's overall output.

Question 5

A company has more than enough machine and labor capacity to meet market demand. However, an internal policy requires that all raw material be purchased from a single, certified domestic supplier to ensure quality. This supplier has a history of inconsistent delivery schedules and can only provide enough material for the company to operate at 75% of its potential capacity. Cheaper, more reliable international suppliers are available but are forbidden by the policy.

What is the primary constraint for this company?

  1. The single-supplier policy, as it artificially restricts access to necessary raw materials. (correct answer)
  2. Market demand, as no company can sell more than its customers will buy.
  3. Machine capacity, since it determines the maximum possible output.
  4. The cost of raw materials, as using a more expensive supplier limits profitability.
Explanation: The stem explicitly states that machine capacity and market demand are not limiting factors. The issue restricting output is the inability to get enough raw materials. The root cause of this material shortage is not a global scarcity but a self-imposed internal policy that forbids using other available suppliers. Therefore, the policy itself is the constraint that is preventing the company from increasing its throughput.

Question 6

A company produces Widgets and Gadgets. The production process involves a Machining department and a Finishing department. In March, a large government contract for Widgets requires extensive use of the Machining department, utilizing its full capacity, while the Finishing department operates at 70% capacity. In April, the product mix shifts to fulfilling commercial orders for Gadgets, which are less machine-intensive but require significant manual labor in the Finishing department. In April, Finishing operates at full capacity, while Machining is only 60% utilized.

Which statement best describes the constraint situation across these two months?

  1. The Machining department is the persistent bottleneck for the company.
  2. The Finishing department is the persistent bottleneck for the company.
  3. The company has no bottleneck as capacity is sufficient when averaged over the two months.
  4. The bottleneck is dynamic, shifting from Machining in March to Finishing in April. (correct answer)
Explanation: A bottleneck is a resource operating at full capacity that limits total output at a given point in time. In March, the Machining department was at full capacity, making it the bottleneck. In April, the product mix changed, and the Finishing department became the resource operating at full capacity. This demonstrates a dynamic or shifting bottleneck, where the constraint changes based on the mix of work being performed.

Question 7

A production manager is reviewing reports for three sequential departments. A financial report shows Department A has the highest labor costs. An engineering report indicates that Department B has the longest processing time per unit. An inventory report reveals a large and growing queue of work-in-process waiting for Department C.

Based on this combination of information, which department should be identified as the system's primary constraint?

  1. Department A, because its high labor costs indicate a potential inefficiency that slows production.
  2. Department B, because the longest individual processing time determines the overall pace.
  3. Department C, because the accumulation of inventory before it is a direct sign of a bottleneck. (correct answer)
  4. It cannot be determined without knowing the capacity utilization percentages for each department.
Explanation: While high costs (Dept A) and long cycle times (Dept B) are important metrics, the most direct physical evidence of a bottleneck in a sequential process is the buildup of inventory before it. The large queue in front of Department C indicates that it is not processing units as fast as Department B is feeding them to it. This makes Department C the constraint. High costs do not necessarily correlate with being a bottleneck, and longest processing time is only the bottleneck if there are no queues elsewhere.

Question 8

A product is made in a three-step process: Mixing, Molding, and Curing.

  • Mixing has the capacity to process 1,000 pounds of raw material per hour.
  • Molding receives material from Mixing. It has a capacity to process 900 pounds per hour and has a 10% scrap rate (i.e., 90% yield).
  • Curing receives molded items. It has a capacity to process 850 pounds per hour and has a 5% scrap rate (i.e., 95% yield).

Which process step is the bottleneck that limits the output of good, finished product?

  1. Mixing, because it is the first step in the sequence.
  2. The 10% scrap rate in Molding is the primary system constraint.
  3. Curing, because it has the lowest processing capacity of 850 pounds per hour.
  4. Molding, because its effective output of good product is the lowest in the system. (correct answer)
Explanation: To find the bottleneck, we must calculate the effective capacity of each step in terms of good, finished units that can flow through the entire system.
  1. Mixing: Can supply 1,000 lbs/hr to Molding. This is the maximum input to the system.
  2. Molding: Receives up to 1,000 lbs/hr from Mixing, but its own capacity is 900 lbs/hr. Thus, it can only process 900 lbs/hr. Its output of good material to Curing is 900 lbs/hr * (1 - 0.10) = 810 lbs/hr.
  3. Curing: Has a capacity of 850 lbs/hr. However, it only receives 810 lbs/hr of good material from Molding. Since its capacity is greater than the input it receives, Curing is not the bottleneck.
The flow of good material is constrained by the Molding step, which can only produce 810 lbs/hr of good product. This is less than Curing's capacity. Therefore, Molding is the bottleneck.

Question 9

A company operates three distinct machines—Grinder, Polisher, and Coater—to produce a specialized metal part. The Grinder is operating at 98% of its capacity. The Polisher is operating at 85% capacity. The Coater is operating at 92% capacity. When making short-term decisions about which customer orders to prioritize, management needs to focus on maximizing profitability.

To make the most profitable short-term decisions regarding product mix, the time required on which machine is the most critical piece of information?

  1. The Polisher, because it has the most available slack capacity for accepting new orders.
  2. The Grinder, because it is operating at the highest capacity utilization and is the bottleneck. (correct answer)
  3. The Coater, as its utilization is high and it is the final step before the product is finished.
  4. All three machines equally, as each contributes to the total cost and time of production.
Explanation: According to the Theory of Constraints, decisions regarding profitability and product mix should be based on maximizing the contribution margin per unit of the constrained resource. The constrained resource, or bottleneck, is the one with the least available capacity, which is identified by the highest utilization. The Grinder, at 98% capacity, is the bottleneck. Therefore, the time required on the Grinder is the most critical information for prioritizing orders to maximize throughput.

Question 10

A product requires two components, Component X and Component Y, which are produced in different departments. The department for Component X has a production capacity of 800 units per day. The department for Component Y has a production capacity of 950 units per day. Both components are then sent to a Final Assembly department, which has the capacity to assemble 750 finished units per day.

Where is the bottleneck in this manufacturing system?

  1. The Component X department, as its capacity is lower than the Component Y department.
  2. There is no bottleneck, as the two component departments' combined capacity exceeds assembly.
  3. The Component Y department, because it creates excess inventory that burdens the system.
  4. The Final Assembly department, as its capacity is the lowest in the entire process. (correct answer)
Explanation: This system involves parallel processes (making X and Y) that feed into a sequential process (Final Assembly). The overall system's output is limited by the slowest step in the sequence.
  • Component X capacity: 800 units/day
  • Component Y capacity: 950 units/day
  • Final Assembly capacity: 750 units/day Even though the component departments can produce 800 and 950 units respectively, the Final Assembly department can only process 750 units per day. Therefore, Final Assembly is the bottleneck as it has the lowest capacity and restricts the entire system's output.

Question 11

A laptop manufacturer can assemble 500 laptops per day. Each laptop requires one CPU, and the company's primary CPU supplier can only provide 450 CPUs per day due to a global shortage. The manufacturer has ample supply of all other components, such as memory, screens, and chassis. Market demand currently exceeds 600 laptops per day.

What is the primary constraint limiting the manufacturer's daily output?

  1. The supply of CPUs, as only 450 can be sourced daily. (correct answer)
  2. Market demand, since it is higher than the assembly capacity.
  3. Assembly line capacity, as it is limited to 500 units.
  4. The availability of other components like memory and screens.
Explanation: The constraint is the element that most severely limits the system's output. We must compare the different limits:
  • Assembly capacity: 500 units/day
  • CPU supply: 450 units/day
  • Other components: Ample supply
  • Market demand: >600 units/day The lowest limit is the CPU supply at 450 units per day. The company cannot assemble more laptops than it has CPUs for. Therefore, the external supply chain for CPUs is the bottleneck, not the internal assembly capacity or market demand.

Question 12

FlexiCo can produce up to 10,000 units of its product per month with its current equipment and staff. The marketing department has confirmed that market demand is approximately 8,000 units per month. However, a contract with FlexiCo's sole supplier for a critical component, Part Z, limits deliveries to a quantity sufficient for only 7,500 units per month.

What is the primary constraint limiting FlexiCo's monthly sales?

  1. Internal production capacity, as it represents the absolute maximum output possible.
  2. Market demand, as the company can only sell what the market is willing to purchase.
  3. The supply contract for Part Z, as it prevents production from meeting known market demand. (correct answer)
  4. Labor availability, as staffing levels are required to operate the equipment at full capacity.
Explanation: A constraint is the factor that limits the system's performance. Here, we must compare the limits imposed by production capacity, market demand, and material supply.
  • Production Capacity: 10,000 units
  • Market Demand: 8,000 units
  • Material Supply (Part Z): 7,500 units The most restrictive limit, and therefore the primary constraint, is the supply of Part Z, which caps production at 7,500 units. The company cannot meet the market demand of 8,000 units because it cannot acquire enough of the critical component. Internal capacity is not a constraint as it is well above the other limits.

Question 13

A manufacturing process consists of three sequential machines: A, B, and C. Their current capacities are 50 units/hour, 40 units/hour, and 60 units/hour, respectively. Management correctly identifies Machine B as the bottleneck. As part of a process improvement initiative, Machine B's capacity is upgraded by 30%.

After the capacity upgrade for Machine B, what is the status of the bottleneck in the process?

  1. Machine B remains the bottleneck, but the system's overall capacity has increased.
  2. Machine A becomes the new bottleneck, as it is now the slowest process. (correct answer)
  3. The bottleneck is eliminated, as all machines now have sufficient capacity.
  4. Machine C becomes the new bottleneck because it was the fastest process previously.
Explanation: First, determine the original bottleneck. The capacities are A=50, B=40, C=60. The lowest capacity is Machine B (40 units/hour), so it is the original bottleneck. Next, calculate the new capacity of Machine B after the 30% upgrade: 40 units/hour * 1.30 = 52 units/hour. The new capacities are: Machine A = 50 units/hour, Machine B = 52 units/hour, and Machine C = 60 units/hour. The new bottleneck is the process with the lowest capacity, which is now Machine A at 50 units/hour.

Question 14

A high-tech manufacturing firm uses a specialized 3D printing machine that requires a certified technician to operate. The firm has three such machines, each with a theoretical capacity of 160 hours per week. However, the firm employs only two certified technicians, each working a standard 40-hour week. The technicians cannot operate more than one machine at a time.

What is the primary operational constraint on the 3D printing process?

  1. The number of 3D printing machines, as there are only three available.
  2. The theoretical capacity of the machines, totaling 480 hours per week.
  3. The availability of certified technicians, totaling 80 hours per week. (correct answer)
  4. The maintenance schedule for the machines, which reduces their theoretical capacity.
Explanation: The constraint is the resource that limits the overall output. While the theoretical machine capacity is high (3 machines * 160 hours = 480 hours), the machines cannot run without operators. The total available operating time is limited by the technicians' hours. With two technicians each working 40 hours, the total available operator time is 2 * 40 = 80 hours per week. This is the effective capacity and the primary constraint, as it is much lower than the theoretical machine capacity.

Question 15

JKL Manufacturing operates a job shop with five work centers. During peak season analysis, the following utilization rates were observed: Machining 85%, Welding 96%, Painting 78%, Assembly 91%, and Packaging 89%. Work flows sequentially through all centers. Management notices that Welding frequently has jobs waiting, while Packaging occasionally runs out of work. Which statement best explains the constraint dynamics in this system?

  1. Machining is the constraint because it feeds all downstream operations and operates at relatively low 85% utilization
  2. Assembly creates the constraint because it operates at 91% utilization and is positioned late in the process sequence
  3. Welding is the constraint because it shows the highest utilization at 96% and has visible queues forming (correct answer)
  4. Packaging represents the constraint because it occasionally runs out of work, indicating insufficient upstream capacity
Explanation: When analyzing constraints in sequential manufacturing operations, look for bottlenecks by identifying where work accumulates and which operation limits overall system throughput. The constraint is typically the operation with the highest utilization rate that creates queues. In this sequential flow system, Welding operates at 96% utilization—the highest among all work centers—and has visible queues forming. This combination clearly identifies it as the constraint. High utilization indicates the operation is working at near-maximum capacity, while the queues demonstrate that upstream operations (Machining at 85%) can feed work faster than Welding can process it. The constraint determines the pace for the entire system. Option A incorrectly assumes that lower utilization indicates a constraint. Actually, Machining's 85% utilization suggests it has excess capacity and isn't limiting system output. Option B misunderstands constraint identification—Assembly's 91% utilization is high but not the highest, and its position in the sequence doesn't automatically make it the constraint. Option D reflects a fundamental misunderstanding: when Packaging runs out of work, it indicates insufficient input from upstream operations, meaning the constraint is earlier in the process, not at Packaging itself. Remember this key principle: in sequential operations, the constraint is the operation with the highest utilization rate where queues form. Look for the combination of maximum utilization and visible work accumulation—this pinpoints your bottleneck and system constraint.

Question 16

MNO Corporation produces custom furniture using three types of skilled labor: Carpenters (8 available, 40 hours/week each), Finishers (5 available, 40 hours/week each), and Assemblers (6 available, 40 hours/week each). The company produces two product lines: Premium chairs requiring 3 carpenter hours, 4 finisher hours, and 2 assembler hours per unit; and Deluxe tables requiring 5 carpenter hours, 2 finisher hours, and 3 assembler hours per unit.

If MNO Corporation receives orders for 50 premium chairs and 30 deluxe tables for next week, which resource constraint will prevent completion of all orders?

  1. Finisher hours represent the binding constraint, with demand exceeding weekly capacity by 60 hours (correct answer)
  2. Carpenter hours will be insufficient, with total requirements exceeding available capacity by 30 hours per week
  3. Assembler hours will create a bottleneck, requiring 40 hours more than the available weekly capacity
  4. All resource constraints can be satisfied simultaneously with the current staffing levels and work schedules
Explanation: When you encounter resource constraint problems, you're dealing with capacity planning and bottleneck analysis. The key is systematically calculating total resource requirements against available capacity to identify which constraint is binding. Let's calculate the resource needs for 50 premium chairs and 30 deluxe tables: Carpenter hours needed:
  • Premium chairs: 50 × 3 = 150 hours
  • Deluxe tables: 30 × 5 = 150 hours
  • Total: 300 hours
  • Available: 8 workers × 40 hours = 320 hours
  • Surplus: 20 hours
Finisher hours needed:
  • Premium chairs: 50 × 4 = 200 hours
  • Deluxe tables: 30 × 2 = 60 hours
  • Total: 260 hours
  • Available: 5 workers × 40 hours = 200 hours
  • Shortage: 60 hours
Assembler hours needed:
  • Premium chairs: 50 × 2 = 100 hours
  • Deluxe tables: 30 × 3 = 90 hours
  • Total: 190 hours
  • Available: 6 workers × 40 hours = 240 hours
  • Surplus: 50 hours
Answer A correctly identifies that finisher hours create the binding constraint with a 60-hour shortage. Answer B miscalculates carpenter requirements—there's actually a surplus, not a 30-hour deficit. Answer C incorrectly claims assemblers need 40 more hours when they actually have 50 hours of surplus capacity. Answer D is wrong because the finisher constraint prevents completing all orders. Study tip: Always calculate each resource requirement separately and compare against capacity. The binding constraint is whichever resource has the largest shortage relative to demand—this determines your production bottleneck.

Question 17

PQR Chemical processes materials through four stages: Mixing (180 kg/hour), Heating (150 kg/hour), Cooling (170 kg/hour), and Packaging (160 kg/hour). Due to the chemical process, any material that cannot be immediately processed in the next stage must be discarded. The plant operates 16 hours daily. Which operational constraint requires the most immediate management attention?

  1. Heating capacity represents the primary bottleneck and should be expanded to at least 170 kg/hour (correct answer)
  2. Mixing capacity should be reduced to 150 kg/hour to match the heating constraint and minimize waste
  3. Cooling capacity creates periodic bottlenecks when heating operates at full capacity for extended periods
  4. Packaging capacity limits overall throughput and requires expansion to match cooling capacity at 170 kg/hour
Explanation: When analyzing production flow problems, you need to identify bottlenecks—the stage with the lowest capacity that constrains the entire system. Since materials must flow immediately to the next stage or be discarded, the slowest process determines maximum throughput. Looking at the capacities: Mixing (180 kg/hour), Heating (150 kg/hour), Cooling (170 kg/hour), and Packaging (160 kg/hour), Heating has the lowest capacity at 150 kg/hour. This means the entire system can only process 150 kg/hour maximum, regardless of other stages' higher capacities. Any excess material from Mixing (30 kg/hour) gets discarded when it reaches Heating. Answer A correctly identifies that expanding Heating capacity to 170 kg/hour would eliminate this primary bottleneck and reduce waste. Answer B is flawed because reducing Mixing capacity doesn't address the fundamental constraint—Heating would still limit throughput to 150 kg/hour. Answer C misidentifies the problem; Cooling at 170 kg/hour can easily handle Heating's maximum output of 150 kg/hour, so no periodic bottlenecks occur. Answer D incorrectly focuses on Packaging as the limiting factor. While Packaging does constrain flow somewhat, Heating's lower capacity makes it the primary bottleneck that needs immediate attention. Study tip: In bottleneck analysis, always identify the stage with the absolute lowest capacity first. That's your primary constraint. Secondary bottlenecks only matter after you've addressed the most restrictive stage. Look for the smallest number—that's where your biggest problem lies.

Question 18

DEF Company's production process involves three sequential operations with the following characteristics: Operation 1 can process 120 units per hour, Operation 2 can process 100 units per hour, and Operation 3 can process 110 units per hour. Management is considering adding overtime capacity to one operation to increase throughput. If overtime adds 25% additional capacity to the selected operation, which strategy would provide the greatest increase in overall system throughput?

  1. Add overtime to Operation 1, increasing its capacity to 150 units per hour to create maximum buffer inventory
  2. Add overtime to Operation 2, increasing its capacity to 125 units per hour to eliminate the bottleneck constraint (correct answer)
  3. Add overtime to Operation 3, increasing its capacity to 137.5 units per hour to prevent downstream backup
  4. Add overtime equally across all operations to maintain balanced capacity and minimize work-in-process inventory
Explanation: Operation 2 is the bottleneck at 100 units/hour, limiting total system throughput. Adding 25% overtime increases it to 125 units/hour, raising system throughput from 100 to 110 units/hour (now limited by Operation 3). Choice A creates excess upstream capacity without improving throughput. Choice C improves a non-constraint operation. Choice D isn't feasible as the question asks about adding capacity to 'one operation'.

Question 19

GHI Electronics assembles smartphones using four key resources: Component sourcing (300 units/day capacity), Circuit board assembly (250 units/day), Final assembly (280 units/day), and Quality testing (240 units/day). The company currently produces 220 units per day. Market demand is strong, and the company wants to increase production to 270 units per day within 60 days.

To achieve the target production level of 270 units per day, which constraint analysis is most accurate?

  1. Component sourcing will become the binding constraint, requiring capacity expansion from 300 to at least 270 units per day
  2. Quality testing is currently the bottleneck and must be expanded to at least 270 units per day capacity to meet the target (correct answer)
  3. Circuit board assembly capacity is insufficient and needs expansion to support 270 units per day production levels
  4. Final assembly represents the most critical constraint requiring immediate capacity investment to achieve target production
Explanation: Quality testing has the lowest capacity at 240 units/day, making it the current bottleneck. To produce 270 units/day, this constraint must be relieved first. Choice A is wrong because 300 > 270, so component sourcing has adequate capacity. Choice C is wrong because circuit board assembly at 250 units/day is insufficient but not the primary constraint. Choice D is wrong because final assembly at 280 units/day exceeds the target.

Question 20

YZA Industries operates a multi-product facility with shared resources. The company produces Products Alpha, Beta, and Gamma, each requiring different combinations of three critical resources: specialized equipment time, skilled labor hours, and raw material inputs. Management has identified that skilled labor availability varies significantly due to training requirements and worker certification levels.

During capacity planning analysis, YZA discovers that skilled labor operates at 94% utilization while specialized equipment runs at 78% and raw materials are readily available. However, skilled labor productivity decreases by 15% when utilization exceeds 95% due to worker fatigue. Which constraint management strategy is most appropriate?

  1. Increase skilled labor capacity immediately since it operates near the critical 95% threshold for productivity decline
  2. Focus on specialized equipment utilization improvements since it represents the largest underutilized resource at 22% slack
  3. Maintain current operations since skilled labor hasn't yet reached the 95% productivity decline threshold
  4. Implement cross-training programs to increase labor flexibility before utilization reaches the 95% productivity threshold (correct answer)
Explanation: At 94% utilization, skilled labor is approaching the 95% threshold where productivity decline occurs. Cross-training increases flexibility and effective capacity without immediately adding headcount. Choice A addresses symptoms but not root flexibility issues. Choice B focuses on a non-constraint resource. Choice C ignores the proximity to the productivity decline threshold and the need for proactive management.