Certified Production & Operations Manager (POM) Practice Exam

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Given an effective capacity of 20 units, design capacity of 60 units, and actual output of 15 units per day, what would the utilization be?

  1. 1/3

  2. 1/2

  3. 1/4

  4. 3/4

The correct answer is: 1/4

To determine the utilization of the system, you can use the formula for utilization, which is the ratio of actual output to design capacity. Utilization is calculated as follows: \[ \text{Utilization} = \frac{\text{Actual Output}}{\text{Design Capacity}} \] In this scenario, the actual output is 15 units and the design capacity is 60 units. Plugging these values into the formula gives: \[ \text{Utilization} = \frac{15}{60} = \frac{1}{4} \] This means that the system is utilizing one-fourth of its designed capacity, which is why the correct answer reflects that specific value. Understanding utilization is important because it provides insights into how effectively a system’s capacity is being used relative to what it could potentially handle at its maximum design level. This metric is crucial in operational management, as it helps identify areas where improvements can be made to increase efficiency.