Question 1

Aggregate planning for service firms that provide intangible output deals mainly with

Accepted Answer

A)  smoothing the production rate and finding the optimal size of the workforce. 
B)  capital investment decisions. 
C)  centralized purchasing. 
D)  centralized production. 
E)  planning for human resource requirements and managing demand. 
A)  smoothing the production rate and finding the optimal size of the workforce. 
B)  capital investment decisions. 
C)  centralized purchasing. 
D)  centralized production. 
E)  planning for human resource requirements and managing demand. E

Question 2

________ work with a few variables at a time and are easy to understand and use.

Accepted Answer

Graphical methods

Question 3

In aggregate planning, the amount of overtime and the size of the workforce are both adjustable elements of capacity.

Accepted Answer

A) True 
 B)False  True

Question 4

Which of the following statements about aggregate planning is true?

Accepted Answer

A)  Advertising/promotion is a way of manipulating product or service supply. 
B)  Work station loading and job assignments are examples of aggregate planning. 
C)  Overtime/idle time is a way of manipulating product or service demand. 
D)  Aggregate planning uses the adjustable part of capacity to meet production requirements. 
E)  Aggregate planning is also known as aggregate sequencing. 
A)  Advertising/promotion is a way of manipulating product or service supply. 
B)  Work station loading and job assignments are examples of aggregate planning. 
C)  Overtime/idle time is a way of manipulating product or service demand. 
D)  Aggregate planning uses the adjustable part of capacity to meet production requirements. 
E)  Aggregate planning is also known as aggregate sequencing.

Question 5

One reason complex models have not found widespread use and application is that

Accepted Answer

A)  managers are lazy. 
B)  managers cannot understand how they work. 
C)  the models are inaccurate. 
D)  good models are time-consuming and managers must often react swiftly to dynamic demand. 
E)  the statement is false; complex models are widely used and accepted. 
A)  managers are lazy. 
B)  managers cannot understand how they work. 
C)  the models are inaccurate. 
D)  good models are time-consuming and managers must often react swiftly to dynamic demand. 
E)  the statement is false; complex models are widely used and accepted.

Question 6

A small private university normally charges the same price-$300-per credit-hour for all courses and for all students. While the university is pretty near capacity in the fall and spring, it finds that its classrooms are only about 50% occupied during the summer session. A student of operations management (who has recently read this chapter) wonders if yield management might be useful to both the university and its students alike. This student, with help from some economics majors, estimates a demand curve for summer course enrollment. Points on this demand curve include 6000 credit-hours at the current rate of $300, 9,000 credit hours at $210, 12,000 credit-hours at $180. Based on this demand curve, what price point would best serve the university, if its objective is the greatest revenue for the summer session?

Accepted Answer

The student must consider that since 600

Question 7

Osprey Machine Works has the following demand requirements and other data for the upcoming four quarters.
 $\begin{array}{|l|l|l|l|}
\hline\text { Quarter } & \text { Demand } & \text { Previous quarter's output } & 2500 \text { units } \
\hline 1 & 2300 & \text { Beginning inventory } & 200 \text { units } \
\hline 2 & 2400 & \text { Stockout (backorder) cost } & \$ 50 \text { per unit } \
\hline 3 & 2600 & \text { Inventory holding cost } & \text { \$10 per unit at } \
&&&\text { end of quarter }\
\hline4 & 2100 & \text { Hiring workers } & \$ 4 \text { per unit } \
\hline & & \text { Laying off workers } & \text { \$8 per unit } \
\hline & & \text { Unit cost } & \text { \$30 per unit } \
\hline && \text { Overtime } & \text { \$10 extra per unit } \
\hline
\end{array}$ What is the total cost of pursuing a level aggregate plan over the coming year?

Accepted Answer

Requirements total 9400 units,

Question 8

Developing a mix of ________ products is a widely used demand smoothing technique.

Accepted Answer

The answer of Developing a mix of ________ products is...

Question 9

Washington Laundry Products, Inc., makes commercial and industrial laundry machines (the kinds hotels use), and has these aggregate demand requirements for the next six months. The firm has regular capacity for 200 units, and overtime capacity for 40 more. Currently, subcontracting can supply up to 100 units per month, but the subcontracting firm may soon be unavailable. $\begin{array}{|l|l|l|l|l|}
\hline \text { Month } & \text { Demand } & & {\text { Costs and other data }} \
\hline 1 & 220 && \text { Previous output level } & 150 \text { units } \
\hline 2 & 160 && \text { Beginning inventory } & 100 \text { units } \
\hline 3 & 200 && \text { Stockout cost } & \$ 250 \text { per unit } \
\hline 4 & 210 && \text { Inventory holding cost } & \begin{array}{l}
\$ 100 \text { per unit } \
\text { at end of } \
\text { month }
\end{array} \
\hline 5 & 200 && \text { Unit Cost, regular time } & \$ 1,200 \text { per } \
&&&&\text { unit }\
\hline  & 190 && \text { Subcontracting } & \$ 2,000 \text { per } \
6 &&&& \text { unit } \
\hline&&&\text { Unit Cost, overtime } & \$ 1,500 \text { per } \
&&&&\text { unit }\
\hline &&&\text { Hiring workers } & \$ 200 \text { per unit } \
\hline &&&\text { Laying off workers } & \$ 500 \text { per unit }\
\hline
\end{array}$ Which is cheaper: to produce level, incurring back orders and inventory charges; or to produce a base quantity of 120, using first, overtime, then subcontracting, to meet demand?

Accepted Answer

The cost of the level strategy is $1,326

Question 10

What four things are needed to develop an aggregate plan?

Accepted Answer

To develop an aggregate plan, you need a

Question 11

The aggregate planning process usually includes expediting and dispatching of individual products.

Accepted Answer

A) True 
 B)False

Question 12

In aggregate planning, which one of the following is not a basic option for altering demand?

Accepted Answer

A)  promotion 
B)  subcontracting 
C)  back ordering 
D)  pricing 
E)  level scheduling 
A)  promotion 
B)  subcontracting 
C)  back ordering 
D)  pricing 
E)  level scheduling

Question 13

Which of these aggregate planning strategies adjusts capacity to match demand?

Accepted Answer

A)  back ordering 
B)  using part-time workers 
C)  counterseasonal product mixing 
D)  changing price 
E)  leveling inventory purchasing 
A)  back ordering 
B)  using part-time workers 
C)  counterseasonal product mixing 
D)  changing price 
E)  leveling inventory purchasing

Question 14

The use of part-time workers as an aggregate planning option may be less costly than using full-time workers, but may also reduce quality levels.

Accepted Answer

A) True 
 B)False

Question 15

________ is a complex aggregate planning technique, using models that may be difficult to build and for managers to understand.

Accepted Answer

The answer of ________ is a complex aggregate planning technique,...

Question 16

Explain the fundamental difference between the "capacity options" and the "demand options" of aggregate planning strategies.

Accepted Answer

Capacity options do not try to change th

Question 17

Yield management is most likely to be used in which one of the following situations?

Accepted Answer

A)  a fast food restaurant with wide demand fluctuations during the day 
B)  a dental clinic that wants to fill its appointment book 
C)  a firm with a good counterseasonal product mix 
D)  a shipping company that can change its fleet size easily 
E)  an airline attempting to fill "perishable" seats at maximum revenue 
A)  a fast food restaurant with wide demand fluctuations during the day 
B)  a dental clinic that wants to fill its appointment book 
C)  a firm with a good counterseasonal product mix 
D)  a shipping company that can change its fleet size easily 
E)  an airline attempting to fill "perishable" seats at maximum revenue

Question 18

Identify some firms that provide yield management software.

Accepted Answer

NCR's Teradata, SPS,

Question 19

________ involves capacity decisions that determine the allocation of classes of resources in order to maximize profit or yield.

Accepted Answer

The answer of ________ involves capacity decisions that determine the...

Question 20

A professional services firm is investigating yield management as a means of taking advantage of unused capacity. Analysts for this firm estimate a demand curve for the firm's service, which is sold by the hour. Points on this demand curve include 9000 hours at the current rate of $60 per hour, 9500 hours at $55, 10,000 hours at $50, and 10,500 hours at $45. Based on this demand curve, what price point would be best for the firm, if its objective is maximum revenue?

Accepted Answer

The yields of these price points are as

Exam 13: Aggregate Planning

Aggregate planning for service firms that provide intangible output deals mainly with

________ work with a few variables at a time and are easy to understand and use.

In aggregate planning, the amount of overtime and the size of the workforce are both adjustable elements of capacity.

Which of the following statements about aggregate planning is true?

One reason complex models have not found widespread use and application is that

Developing a mix of ________ products is a widely used demand smoothing technique.

What four things are needed to develop an aggregate plan?

The aggregate planning process usually includes expediting and dispatching of individual products.

In aggregate planning, which one of the following is not a basic option for altering demand?

Which of these aggregate planning strategies adjusts capacity to match demand?

The use of part-time workers as an aggregate planning option may be less costly than using full-time workers, but may also reduce quality levels.

________ is a complex aggregate planning technique, using models that may be difficult to build and for managers to understand.

Explain the fundamental difference between the "capacity options" and the "demand options" of aggregate planning strategies.

Yield management is most likely to be used in which one of the following situations?

Identify some firms that provide yield management software.

________ involves capacity decisions that determine the allocation of classes of resources in order to maximize profit or yield.

Operations and Productivity

Operations Strategy in a Global Environment

Project Management

Forecasting

Design of Goods and Services

Managing Quality

Process Strategy and Sustainability

Location Strategies

Layout Strategies

Human Resources, Job Design, and Work Measurement

Supply-Chain Management

Inventory Management

Material Requirements Planning Mrp and Erp

Short-Term Scheduling

Lean Operations

Maintenance and Reliability

Decision-Making Tools

Linear Programming

Transportation Models

Waiting-Line Models

Learning Curves

Simulation

Supply Chain Management Analytics

Sustainability in the Supply Chain

Statistical Process Control

Capacity and Constraint Management

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