Lesson 8.8.1

8.8.1 Capacity utilisation Quiz: OCR Business, Unit 8

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 8.8.1, Capacity utilisation: 20 multiple choice questions for the OCR Business (H431), Unit 8: Operations, written with Revision Ninja.

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The 20 questions

  1. Which formula calculates the capacity utilisation percentage of a business?

    • Target output / maximum output
    • Actual output / target output
    • Maximum output / actual output
    • Actual output / maximum output

  2. A factory capable of producing 5,000 units per month actually produces 4,000 units. What is its capacity utilisation?

    • 80%
    • 20%
    • 75%
    • 125%

  3. Which term describes matching a business's production capacity to changing customer demand?

    • Capacity management
    • Supply chain management
    • Stock control
    • Lean production

  4. What is a major risk for a factory operating at 100% capacity utilisation over a long period?

    • High unit costs
    • Excess idle resources
    • Machine breakdowns
    • Low worker motivation

  5. A hotel chain downsizes by closing underperforming branches to cut fixed costs. What is this process called?

    • Capital expenditure
    • Rationalisation
    • Kaizen
    • Subcontracting

  6. Which method allows a firm to temporarily increase capacity without buying new equipment?

    • Redundancy
    • Subcontracting
    • Automation
    • Rationalisation

  7. What is the term for the minimum level of inventory held to protect against sudden demand spikes?

    • Reorder level
    • Lead time stock
    • Buffer stock
    • Maximum stock

  8. What term describes the time taken between placing an inventory order and receiving delivery?

    • Reorder time
    • Lead time
    • Buffer time
    • Cycle time

  9. Usage is 50 units daily with a 4-day lead time. Without buffer stock, what is the reorder level?

    • 54 units
    • 200 units
    • 12.5 units
    • 400 units

  10. Which system uses visual signals or cards to control inventory flow in lean production?

    • Kaizen
    • Poka-yoke
    • Andon
    • Kanban

  11. Which stock control method aims to hold zero stock by receiving supplies only when needed?

    • Just in Time
    • Just in Case
    • Economic Order Quantity
    • Fixed time reordering

  12. On a stock control chart, what does a sudden vertical rise in the stock line represent?

    • Stock usage
    • Stock reorder point
    • Stock delivery
    • Buffer stock allocation

  13. What does the Economic Order Quantity model seek to minimise?

    • Maximum capacity utilisation
    • Total inventory costs
    • Total marketing expenses
    • Labour turnover rates

  14. What is the biggest operational risk when operating a Just in Time system?

    • Supply chain disruption
    • Obsolete stock buildup
    • Excess storage costs
    • High warehouse rent

  15. How can a seasonal ski resort improve capacity utilisation during off-peak summer months?

    • Price discounting
    • Increasing buffer stock
    • Raising average prices
    • Capacity rationalisation

  16. Which operational strategy focuses on eliminating waste while maintaining customer value?

    • Buffer management
    • Mass customization
    • Batch production
    • Lean production

  17. A manufacturing plant achieves productive efficiency when it operates at which point on its average cost curve?

    • Marginal cost point
    • Highest point
    • Break-even point
    • Lowest point

  18. Which technology allows flexible manufacturing by using computers to control machine tools?

    • CRM
    • CAD
    • EDI
    • CAM

  19. What occurs when a firm's average costs rise as its scale of output expands?

    • Productive efficiency
    • Diseconomies of scale
    • Economies of scale
    • Capacity utilisation

  20. Which electronic technology uses radio waves to track inventory automatically throughout the supply chain?

    • RFID
    • CAD
    • CAM
    • EPOS

All OCR Business quizzes