Certified Production & Operations Manager (POM) Practice Exam

Has the trend toward global operations simplified capacity decisions?

1. True

2. False

The correct answer is: False

The trend toward global operations has not simplified capacity decisions; in fact, it has added layers of complexity. Global operations often mean dealing with a range of suppliers, varying lead times, and more complicated logistics networks. Companies must navigate different regulatory environments, cultural differences, and fluctuating demand across multiple regions, which can all impact capacity planning. Capacity decisions become more intricate due to the need to consider factors such as time zones, transportation costs, and regional market demand. Moreover, firms may have to align their capacities with international supply chains, which can lead to variations in production capacity requirements based on global market dynamics. Effective capacity management in a global context requires comprehensive analysis and often necessitates the use of advanced planning technologies to forecast and align capabilities across different geographical locations. All these factors combined illustrate that rather than simplifying the process, the shift to global operations has made capacity decisions significantly more complex.