Oper Mgmt Ch 11 – Flashcards
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Aggregate planning is intermediate-range capacity planning that typically covers a time horizon of one to three months. True False
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FALSE
Aggregate planning covers the mid-term, typically two to 12 months.
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The goal of aggregate planning is to achieve a production plan that attempts to balance the organization's resources and meet expected demand. True False
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TRUE
This is the goal of aggregate planning.
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Aggregate planners are concerned with the quality and quantity of expected demand. True False
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FALSE
Aggregate planners are concerned with the quantity and timing of expected demand.
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Aggregate planning is used to establish general levels of employment, output, and inventories over an intermediate-range of time. True False
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TRUE
This is the domain of aggregate planning.
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The assignment of work to specific machines and people are examples of aggregate planning. True False
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FALSE
Assigning work to specific machines or people is an example of detailed scheduling.
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The output from aggregate planning is a detailed business plan covering the next 2 to 12 months. True False
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FALSE
The output is an aggregate production plan.
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Demand can be altered in aggregate planning by promotion and producing additional product using overtime. True False
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FALSE
These are supply options.
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Capacity can be modified in aggregate planning by promotion and producing additional product using overtime. True False
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FALSE
Promotions do not modify capacity.
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Organizations facing seasonal changes in demand are prevented from using aggregate planning techniques. True False
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FALSE
Aggregate planning can accommodate seasonal changes in demand.
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Seasonality in demand has the advantage of leveling out requirements for our product or service. True False
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FALSE
Seasonality increases variation in requirements.
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A level capacity strategy is also known as a chase demand strategy. True False
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FALSE
Level and chase strategies are opposite approaches.
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An advantage of a "chase" strategy for aggregate planning is that inventories can be kept relatively low. True False
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TRUE
The chase strategy keeps inventories low.
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Linear programming models yield the optimal solution. True False
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TRUE
Linear programming models can find an optimal solution if one exists.
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Ultimately the overriding factor in choosing a strategy in aggregate planning is overall cost. True False
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TRUE
The task of aggregate planning is to strike a balance between demand and capacity at minimum cost.
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Aggregate planners commonly use trial-and-error methods in developing aggregate plans. True False
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TRUE
Trial-and-error approaches can lead to good solutions.
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The use of tables and charts in aggregate planning usually enables planners to arrive at an optimal plan. True False
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FALSE
Such solutions may be good solutions, but they're usually not optimal.
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Aggregate planners typically use mathematical techniques such as linear programming and linear decision rules for planning. True False
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FALSE
Both qualitative and quantitative approaches are used in aggregate planning.
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Disaggregating an aggregate plan leads to a master schedule. True False
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TRUE
This is an output of the aggregate planning process.
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The master schedule indicates the quantity and timing for delivery of a product, but not the dates production will need to start. True False
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TRUE
Required start dates depend on products' lead times.
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Departmental budgeting is an example of aggregate planning. True False
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TRUE
The challenge is to get requirements into balance with resources.
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Master schedulers are employed primarily by service organizations. True False
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FALSE
Master schedulers are primarily employed in manufacturing.
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Subcontracting 'in' would apply to periods in which our organization has excess capacity. True False
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TRUE
Subcontracting in would be selling some available capacity.
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Available-to-promise in the first week is equal to beginning inventory plus MPS quantity, if any, less committed customer orders before the next MPS quantity. True False
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TRUE
This is the ATP calculation for the first week.
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A time fence in the master schedule is used to prevent unauthorized people from making changes to the schedule. True False
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FALSE
Time fences are used to ensure that full consideration is given when schedule changes are being considered.
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After the first period of the planning horizon, available-to-promise is computed only for those periods in which there is an MPS quantity. True False
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TRUE
After the first week, ATP values will only occur in periods in which there are MPS quantities.
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In the master production schedule, production is planned for the next period whenever the available-to-promise quantity becomes negative. True False
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FALSE
Production is planned to be complete in the period in which the projected on-hand becomes negative.
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Which of the following best describes aggregate planning?
A. the link between intermediate term planning and short term operating decisions
B. a collection of objective planning tools
C. make or buy decisions
D. an attempt to respond to predicted demand within the constraints set by product, process and location decisions
E. manpower planning
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D. an attempt to respond to predicted demand within the constraints set by product, process and location decisions
A workable balance between demand and these constraints is sought.
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Accommodating peak demands and effectively using labor resources during periods of low demand would be the goal of aggregate planners in ...
A. Manufacturing
B. Military
C. Archeology
D. Libraries
E. Financial Services
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E. Financial Services
These are the considerations in aggregate planning for service firms.
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Aggregate planning is capacity planning for:
A. the long range
B. the intermediate range
C. the short range
D. typically one to three months
E. typically one or more years
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B. the intermediate range
The intermediate range typically runs from two to 12 months.
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One area to which aggregate planning decisions relate is:
A. job sequencing
B. customer order quantities
C. inventory levels
D. location
E. layout
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C. inventory levels
Different aggregate planning strategies affect inventory levels differently.
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Which of the following is an input to aggregate planning?
A. beginning inventory
B. forecasts for each period of the schedule
C. customer orders
D. all of the above
E. quantity discounts
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D. all of the above
All except quantity discounts are aggregate planning inputs.
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Essentially, the output of aggregate planning is the:
A. marketing plan
B. production plan
C. rough-cut capacity plan
D. assignment plan
E. material requirements plan
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B. production plan
The production plan largely results from the aggregate planning effort.
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In doing "aggregate planning" for a firm producing paint, the aggregate planners would most likely deal with:
A. just gallons of paint, without concern for the different colors and sizes
B. gallons of paint, but be concerned with the different colors to be produced
C. gallons, quarts, pints, and all the different sizes to be produced
D. all the different sizes and all the different colors by size
E. none of the above
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A. just gallons of paint, without concern for the different colors and sizes
The principle of aggregation is reflected in this answer.
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Aggregate planning requires which of the following information?
A. a forecast of expected demand
B. current levels of inventory
C. (a) and (b)
D. policies regarding employment levels
E. all of the above
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E. all of the above
All of these are inputs into the aggregate planning process.
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Aggregate planners attempt to balance:
A. demand and inventories
B. demand and costs
C. capacity and inventories
D. capacity and costs
E. capacity and demand
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E. capacity and demand
Capacity and demand are roughly balanced in aggregate planning.
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Which of the following is not an input to the aggregate planning process?
A. resources available
B. demand forecast
C. policies on work force changes
D. master production schedules
E. cost information
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D. master production schedules
The master production schedule is an output of the aggregate planning process.
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Which one of the following would not be considered a decision option for purposes of aggregate planning?
A. inventory levels
B. manpower levels
C. pricing
D. production costs
E. promotion
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D. production costs
Production costs would be a critical variable, but they would not be a decision variable.
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Which of the following is not a basic option for altering the availability of capacity in a service environment?
A. overtime
B. hiring/layoff
C. part time
D. inventory
E. All of these are basic capacity options.
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D. inventory
Inventory is typically not an option in services.
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Which one of the following is not a basic option for altering demand?
A. promotion
B. backordering
C. pricing
D. subcontracting
E. All are demand options.
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D. subcontracting
Subcontracting is an option for altering capacity.
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One option for altering the pattern of demand is:
A. backorders
B. overtime
C. part-time workers
D. inventories
E. subcontracting
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A. backorders
Backordering shifts demand to later time periods.
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Which of the following would not be a strategy associated with adjusting aggregate capacity to meet expected demand?
A. subcontract
B. vary the size of the workforce
C. vary the intensity of workforce utilization
D. allow inventory levels to vary
E. use backorders
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E. use backorders
Backorders do not involve adjusting capacity.
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One option for altering the availability of manufacturing capacity is:
A. pricing
B. promotion
C. backorders
D. inventories
E. none of the above apply to manufacturing capacity
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D. inventories
Inventory involves using capacity from earlier periods to satisfy demand in later periods.
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One option for altering the availability of capacity is:
A. use of overtime or slack time
B. pricing
C. promotion
D. backorders
E. none of the above
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A. use of overtime or slack time
Overtime or slack time alters the availability of capacity.
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In order to use the "level capacity strategy," variations in demand are met by:
A. varying output during regular time without changing employment levels
B. varying output during regular time by changing employment levels
C. (a) and (b)
D. using combination of inventories, overtime, part time, and back orders
E. price adjustments
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D. using combination of inventories, overtime, part time, and back orders
A combination of inventories, overtime, part time, and back orders is the level strategy.
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In using the "chase strategy" variations in demand could be met by:
A. varying output during regular time without changing employment levels
B. varying output during regular time by changing employment levels
C. (a) and (b)
D. varying inventory levels
E. price increases
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B. varying output during regular time by changing employment levels
Changing employment levels to vary output is representative of a chase strategy.
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Uncommitted inventory is called ...
A. Available-to-promise inventory
B. Free inventory
C. Safety stock
D. Lead time inventory
E. Obsolete inventory
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A. Available-to-promise inventory
Uncommitted inventory is available-to-promise.
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Aggregate planners seek to match supply and demand:
A. at minimum overall cost
B. by staying within company policy
C. (a) and (b)
D. keeping inventories at a minimum
E. all of the above
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C. (a) and (b)
Aggregate plans minimize costs but conform to company policies.
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In practice, the more commonly used techniques for aggregate planning are:
A. mathematical techniques
B. informal trial-and-error techniques
C. (a) and (b) about equally
D. simulation models
E. linear programming optimization
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B. informal trial-and-error techniques
Trial-and-error techniques are more commonly used.
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The main disadvantage(s) of informal techniques used for aggregate planning is(are):
A. they are expensive to do
B. they may not result in the best plan
C. they take a long time to do
D. they require use of a computer
E. lack of formal education of the planners
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B. they may not result in the best plan
Informal solutions may not be costly or difficult, but they may be less likely to offer up the best plan.
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Linear programming to produce an aggregate plan:
A. will produce the best plan if accurate inputs are used
B. is the most widely used technique
C. (a) and (b)
D. will produce a plan that may not be the best plan
E. requires an excel spread sheet
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A. will produce the best plan if accurate inputs are used
If inputs are valid and accurate, linear programming will give an optimal solution.
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Simulation to produce an aggregate plan:
A. will produce the best plan
B. is the most widely used technique
C. both (a) and (b)
D. will produce a plan that may not be the best plan
E. requires a minimum of 4 iterations to be accurate
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D. will produce a plan that may not be the best plan
Simulation is not guaranteed to produce an optimal plan.
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Which term is most closely associated with the term disaggregation?
A. subcontracting
B. master schedule
C. diversity
D. varying inventory levels
E. firing and laying off
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B. master schedule
The aggregate plan is disaggregated into the master schedule.
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The direct result of disaggregating the aggregate plan is the:
A. marketing plan
B. production plan
C. rough-cut capacity plan
D. master schedule
E. material requirements plan
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D. master schedule
The aggregate plan is disaggregated into the master schedule.
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Moving from the aggregate plan to a master production schedule requires:
A. rough cut capacity planning
B. disaggregation
C. sub-optimization
D. strategy formulation
E. chase strategies
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B. disaggregation
The aggregate plan is disaggregated into the master schedule.
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That portion of projected inventory which enables marketing to make realistic commitments about delivery dates for new orders is:
A. beginning inventory
B. safety stock inventory
C. available-to-promise inventory
D. high margin inventory
E. none of the above
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C. available-to-promise inventory
Available-to-promise values are calculated to help marketing make realistic commitments.
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Proactive and Reactive aggregate planning strategies are best associated with:
A. Input and Output
B. Make and Buy
C. Quantitative and Qualitative
D. Exact and Approximate
E. Demand and Capacity options
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E. Demand and Capacity options
Demand and capacity are the targets of proactive and reactive aggregate planning strategies.
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When the opportunity cost of lost revenue is relatively high, _________ become(s) relatively more attractive.
A. Layoffs
B. Backorders
C. Excess capacity
D. Disaggregation
E. Both B and C
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C. Excess capacity
The excess capacity costs diminish in relation to the potential lost revenue.
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The more __________ demand is, the more the aggregate plan will tend to reflect the ____________ strategy.
A. Stable; Level
B. Aggregated; Outsourcing
C. Variable; Chase
D. Complex; Uncommitted
E. Both A and C
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E. Both A and C
These pure strategies reflect particular underlying demand patterns.
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In a service setting, the aggregate plan results in a time-phased projection of __________ requirements.
A. customer
B. staff
C. inventory
D. subcontracting
E. outsourcing
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B. staff
Staff requirements are the focus of aggregate planning in services.
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Which of the following differs between aggregate planning in services and aggregate planning in manufacturing?
A. uncertainty in demand
B. costs of storing inventory
C. the perishability of capacity
D. cost of overtime
E. cost of hiring
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C. the perishability of capacity
Capacity is inherently perishable in services.
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At XYZ Corp., the aggregate planning unit reflects the fact that 50% of its output is product version A, 30% is version B, and 20% is version C. Suppose that over the coming year forecasted total demand (in planning units) is for 10,400 units. Once the production plan is disaggregated, what will the weekly forecast for version A be (assume 52 weeks per year)?
A. 1000
B. 200
C. 400
D. 100
E. 50
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D. 100
Divide 5,200 (annual demand) by 52 weeks.
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A master production schedule quantity of 300 units will arrive in week 6. Weekly demand over weeks 3 through 10 is forecasted at 50 units. At present, orders have been booked in various quantities in weeks 1, 2, 3 and 4. What is the available to promise for week 6?
A. 50
B. 6
C. 300
D. 100
E. Cannot be determined without projected on-hand information
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C. 300
No orders are booked after week 4, so all 300 units arriving in week 6 are available-to-promise in week 6.
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Which of the following steps is necessary to ensure that a master schedule is valid?
A. worker scheduling
B. order promising
C. inventory counting
D. order booking
E. rough-cut capacity planning
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E. rough-cut capacity planning
Rough-cut capacity planning insures that the master schedule is reasonably feasible.
