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CMA Intermediate · Operations Management and Strategic Management · Introduction to Operations Management

A packaged-foods company in Nashik is deciding how much of its monthly production should be made to order and how much made for stock, and how many shifts to run next quarter. Under the classical classification of operations management decision areas, these decisions mainly belong to which area?

Decisions on how much to produce, whether for stock or to order, and how many shifts to run fall under capacity and production planning. Product design, location and layout deal with product features, site choice and internal arrangement, not with matching output to demand.

  1. AProduct design decisions
  2. BCapacity and production planning decisionsCorrect
  3. CFacility location decisions
  4. DPlant layout decisions

Explanation

Deciding how much to produce, for stock or to order, and how many shifts to run is about matching output to demand, which is capacity and production planning. Product design concerns the features of what is made. Location and layout concern where the plant stands and how resources are arranged inside it, which are not at issue here.

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