question

Aggregate planning is capacity planning that typically covers a time horizon of one to three months.

answer

FALSE Aggregate planning covers the mid-term, typically two to 12 months.

question

The goal of aggregate planning is to achieve a production plan that attempts to balance the organization's resources and meet expected demand.

answer

TRUE This is the goal of aggregate planning.

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Aggregate planners are concerned with the quality and quantity of expected demand.

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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.

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TRUE This is the domain of aggregate planning.

question

The assignment of work to specific machines and people are examples of aggregate planning.

answer

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.

answer

FALSE The output is a master schedule.

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Demand can be altered in aggregate planning by promotion and producing additional product using overtime.

answer

FALSE These are supply options.

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Capacity can be modified in aggregate planning by promotion and producing additional product using overtime.

answer

FALSE Promotions do not modify capacity.

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Organizations facing seasonal changes in demand are prevented from using aggregate planning techniques.

answer

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.

answer

FALSE Seasonality increases variation in requirements.

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A level capacity strategy is also known as a chase demand strategy.

answer

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.

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TRUE The chase strategy keeps inventories low.

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Linear programming models yield the optimal solution.

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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.

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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.

answer

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.

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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.

answer

FALSE Both qualitative and quantitative approaches are used in aggregate planning.

question

Disaggregating an aggregate plan leads to a master schedule.

answer

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.

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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.

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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.

answer

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.

answer

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.

answer

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.

answer

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.

answer

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.

answer

FALSE Production is planned to be complete in the period in which the projected on-hand becomes negative.

question

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

answer

D. an attempt to respond to predicted demand within the constraints set by product, process, and location decisions

question

Effectively using labor resources during periods of peak demand and low demand would be the goal of aggregate planners in: A. manufacturing. B. military. C. archeology. D. libraries. E. financial services.

answer

E. financial services.

question

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.

answer

B. the intermediate range.

question

One area to which aggregate planning decisions relate is: A. job sequencing B. customer order quantities C. inventory levels D. location E. layout

answer

C. inventory levels

question

Which of the following is an input to aggregate planning? A. ending inventory B. demand forecasts for each period C. customer levels D. setup costs E. quantity discounts

answer

B. demand forecasts for each period

question

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.

answer

B. production plan.

question

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. all of the different colors targeted for different markets.

answer

A. just gallons of paint, without concern for the different colors and sizes.

question

Aggregate planning requires which of the following information? (I) a forecast of expected demand (II) current levels of inventory (III) policies regarding employment levels A. II only B. I and II only C. I and III only D. I, II, and III E. II and III only

answer

D. I, II, and III

question

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.

answer

E. capacity and demand.

question

Which of the following is not an input to the aggregate planning process? A. resources available B. demand forecast C. policies on workforce changes D. master production schedules E. cost information

answer

D. master production schedules

question

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

answer

D. production costs

question

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 the choices are options.

answer

D. inventory

question

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.

answer

D. subcontracting

question

One option for altering the pattern of demand is: A. back orders. B. overtime. C. part-time workers. D. inventories. E. subcontracting.

answer

A. back orders.

question

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 back orders.

answer

E. Use back orders.

question

One option for altering the availability of manufacturing capacity is: A. pricing. B. promotion. C. back orders. D. inventories. E. yield management.

answer

D. inventories.

question

One option for altering the availability of capacity is: A. use of overtime or slack time. B. pricing. C. promotion. D. back orders. E. rigidly fixing work schedules.

answer

A. use of overtime or slack time.

question

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. varying output by changing overtime levels. D. using combination of inventories, overtime, part time, and back orders. E. price adjustments.

answer

D. using combination of inventories, overtime, part time, and back orders.

question

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. varying output with and without changing employment levels. D. varying inventory levels. E. price increases.

answer

B. varying output during regular time by changing employment levels.

question

Uncommitted inventory is called: A. available-to-promise inventory. B. free inventory. C. safety stock. D. lead time inventory. E. obsolete inventory.

answer

A. available-to-promise inventory.

question

Aggregate planners seek to match supply and demand: A. at minimum overall cost. B. by changing company policy. C. by minimizing layoffs. D. keeping inventories at a minimum. E. by minimizing hires.

answer

A. at minimum overall cost.

question

In practice, the more commonly used techniques for aggregate planning are: A. mathematical techniques. B. informal trial-and-error techniques. C. transportation models. D. simulation models. E. linear programming optimization.

answer

B. informal trial-and-error techniques.

question

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 the use of a computer. E. the lack of formal education of the planners.

answer

B. they may not result in the best plan.

question

Inventory information for firm ABC: What is the expected inventory at the end of April 2008? A. 350 B. 250 C. 150 D. 50 E. 80

answer

B. 250 The ending inventory equals the beginning plus production minus expected demand.

question

Inventory information for firm ABC: What was the inventory at the end of March 2008? A. 350 B. 250 C. 150 D. 50 E. 400

answer

C. 150 Beginning inventory equals the ending inventory plus demand minus production.

question

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. is easy to implement. D. will produce a plan that may not be the best plan. E. requires an Excel spreadsheet.

answer

A. will produce the best plan if accurate inputs are used.

question

Simulation to produce an aggregate plan: A. will produce the best plan. B. is the most widely used technique. C. is easy to implement. D. will produce a plan that may not be the best plan. E. requires a minimum of four iterations to be accurate.

answer

D. will produce a plan that may not be the best plan.

question

Which of the following is most closely associated with disaggregation? A. subcontracting B. master schedule C. diversity D. varying inventory levels E. firing and laying off

answer

B. master schedule

question

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.

answer

D. master schedule.

question

Moving from the aggregate plan to a master production schedule requires: A. rough-cut capacity planning. B. disaggregation. C. suboptimization. D. strategy formulation. E. chase strategies.

answer

B. disaggregation.

question

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. master production schedule arrivals.

answer

C. available-to-promise inventory.

question

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.

answer

E. demand and capacity options.

question

Using dynamic pricing in response to capacity variability to ensure that perishable inventory is not wasted is known as: A. yield management. B. profit minimization. C. capacity loading. D. demand optimization. E. perishability avoidance.

answer

A. yield management.

question

Which of the following are typically in play in a circumstance in which yield management is worthwhile? (I) Perishable capacity (II) Ample finished goods storage (III) Demand variability (IV) Low holding costs A. I, II, and IV only B. I and III only C. III only D. II and III only E. II, III, and IV only

answer

B. I and III only

question

Aggregate planning for services is more difficult than aggregate planning for manufacturing because __________ and __________ are more difficult to predict. A. capacity availability; customer tastes B. holding costs; overtime costs C. demand; capacity availability D. capacity change costs; holding costs E. hiring costs; holding costs

answer

C. demand; capacity availability

question

One thing that makes aggregate planning in services easier than aggregate planning in manufacturing is: A. inventory is cheaper to hold. B. labor availability is more predictable. C. inventory is less perishable. D. labor is more flexible. E. demand is less variable.

answer

D. labor is more flexible

question

Aggregate planning in the case of a high-volume product output business such as a restaurant is directed toward: A. smoothing the service rate. B. reducing the size of the workforce. C. making the kitchen and waitstaff more flexible. D. coming up with a fixed staffing level. E. making weekly work schedules more stable.

answer

A. smoothing the service rate.

question

A company's product line consists of 40 percent Product A, 40 percent Product B, and 20 percent Product C. The aggregate plan calls for total production that averages 1,100 units per quarter. Quarter 1 production will be 800 units, quarter 2 production will be 1,400 units, and quarter 3 production will be 1,200 units. How many units of Product A will be produced in quarter 4? A. 320 units B. 400 units C. 440 units D. 480 units E. 560 units

answer

B. 400 units Total production in quarter 4 will be 1,000 units (4,400 - 3,400). Forty percent of 1,000 units is 400.

question

When the opportunity cost of lost revenue is relatively high, _________ become(s) relatively more attractive. A. layoffs B. back orders C. excess capacity D. disaggregation E. minimal inventory

answer

C. excess capacity

question

The more __________ demand is, the more the aggregate plan will tend to reflect the ____________ strategy. A. stable; level B. aggregated; outsourcing C. variable; level D. complex; uncommitted

answer

A. stable; level

question

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

answer

B. staff

question

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

answer

C. the perishability of capacity

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