question

Aggregate planning is intermediate-range 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.

question

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

answer

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

question

Aggregate planning is used to establish general levels of employment, output, and inventories over an intermediate-range of time.

answer

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.

question

The output from aggregate planning is a detailed business plan covering the next 2 to 12 months.

answer

FALSE The output is an aggregate production plan.

question

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

answer

FALSE These are supply options.

question

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

answer

FALSE Promotions do not modify capacity.

question

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

answer

FALSE Aggregate planning can accommodate seasonal changes in demand.

question

Seasonality in demand has the advantage of leveling out requirements for our product or service.

answer

FALSE Seasonality increases variation in requirements.

question

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

answer

FALSE Level and chase strategies are opposite approaches.

question

An advantage of a "chase" strategy for aggregate planning is that inventories can be kept relatively low.

answer

TRUE The chase strategy keeps inventories low.

question

Linear programming models yield the optimal solution.

answer

TRUE Linear programming models can find an optimal solution if one exists.

question

Ultimately the overriding factor in choosing a strategy in aggregate planning is overall cost.

answer

TRUE The task of aggregate planning is to strike a balance between demand and capacity at minimum cost.

question

Aggregate planners commonly use trial-and-error methods in developing aggregate plans.

answer

TRUE Trial-and-error approaches can lead to good solutions.

question

The use of tables and charts in aggregate planning usually enables planners to arrive at an optimal plan.

answer

FALSE Such solutions may be good solutions, but they're usually not optimal.

question

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.

question

The master schedule indicates the quantity and timing for delivery of a product, but not the dates production will need to start.

answer

TRUE Required start dates depend on products' lead times.

question

Departmental budgeting is an example of aggregate planning.

answer

TRUE The challenge is to get requirements into balance with resources.

question

Master schedulers are employed primarily by service organizations.

answer

FALSE Master schedulers are primarily employed in manufacturing.

question

Subcontracting 'in' would apply to periods in which our organization has excess capacity.

answer

TRUE Subcontracting in would be selling some available capacity.

question

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.

question

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.

question

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.

question

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 A workable balance between demand and these constraints is sought.

question

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

answer

E. Financial Services These are the considerations in aggregate planning for service firms.

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 The intermediate range typically runs from two to 12 months.

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 Different aggregate planning strategies affect inventory levels differently.

question

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

answer

D. all of the above All except quantity discounts are aggregate planning inputs.

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 The production plan largely results from the aggregate planning effort.

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. none of the above

answer

A. just gallons of paint, without concern for the different colors and sizes The principle of aggregation is reflected in this answer.

question

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

answer

E. all of the above All of these are inputs into the aggregate planning process.

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 Capacity and demand are roughly balanced in aggregate planning.

question

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

answer

D. master production schedules The master production schedule is an output of the aggregate planning process.

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 Production costs would be a critical variable, but they would not be a decision variable.

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 these are basic capacity options.

answer

D. inventory Inventory is typically not an option in services.

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 Subcontracting is an option for altering capacity.

question

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

answer

A. backorders Backordering shifts demand to later time periods.

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 backorders

answer

E. use backorders Backorders do not involve adjusting capacity.

question

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

answer

D. inventories Inventory involves using capacity from earlier periods to satisfy demand in later periods.

question

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

answer

A. use of overtime or slack time Overtime or slack time alters the availability of capacity.

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. (a) and (b) 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 A combination of inventories, overtime, part time, and back orders is the level strategy.

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. (a) and (b) D. varying inventory levels E. price increases

answer

B. varying output during regular time by changing employment levels Changing employment levels to vary output is representative of a chase strategy.

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 Uncommitted inventory is available-to-promise.

question

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

answer

C. (a) and (b) Aggregate plans minimize costs but conform to company policies.

question

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

answer

B. informal trial-and-error techniques Trial-and-error techniques are more commonly used.

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

answer

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.

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. (a) and (b) D. will produce a plan that may not be the best plan E. requires an excel spread sheet

answer

A. will produce the best plan if accurate inputs are used If inputs are valid and accurate, linear programming will give an optimal solution.

question

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

answer

D. will produce a plan that may not be the best plan Simulation is not guaranteed to produce an optimal plan.

question

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

answer

B. master schedule The aggregate plan is disaggregated into the 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 The aggregate plan is disaggregated into the master schedule.

question

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

answer

B. disaggregation The aggregate plan is disaggregated into the master schedule.

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. none of the above

answer

C. available-to-promise inventory Available-to-promise values are calculated to help marketing make realistic commitments.

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 Demand and capacity are the targets of proactive and reactive aggregate planning strategies.

question

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

answer

C. Excess capacity The excess capacity costs diminish in relation to the potential lost revenue.

question

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

answer

E. Both A and C These pure strategies reflect particular underlying demand patterns.

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 Staff requirements are the focus of aggregate planning in services.

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 Capacity is inherently perishable in services.

question

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

answer

E. 50 Divide 5,200 (annual demand) by 52 weeks.

question

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

answer

C. 300 No orders are booked after week 4, so all 300 units arriving in week 6 are available-to-promise in week 6.

question

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

answer

E. rough-cut capacity planning Rough-cut capacity planning insures that the master schedule is reasonably feasible.

Operations Management – Chapter 11 – Flashcards

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards