Question 1

Which of the following would most likely fall under the scope of only an operations manager?

Accepted Answer

A)  research and development 
B)  new product plans 
C)  capital investments 
D)  facility location and expansion 
E)  setting inventory levels 
A)  research and development 
B)  new product plans 
C)  capital investments 
D)  facility location and expansion 
E)  setting inventory levels

Question 2

One of the four things needed for aggregate planning is a logical overall unit for measuring sales and output.

Accepted Answer

A) True 
 B)False

Question 3

Most people would argue that a service firm must follow chase or mixed strategies. On the other hand, most state agencies, which are clearly service-oriented, are not at all able to "chase" demand. Discuss how they manipulate demand to allow the level strategy to be used.

Accepted Answer

This is a critical-thinking item for stu

Question 4

Osprey Fabrication has the following aggregate demand requirements and other data for the upcoming four quarters.
 $\begin{array}{|l|l|l|l|}
\hline\text { Quarter } & \text { Demand } & \text { Previous quarter's output } & 1300 \text { units } \
\hline 1 & 1400 & \text { Beginning inventory } & 0 \text { units } \
\hline 2 & 1200 & \text { Stockout cost } & \$ 50 \text { per unit } \
\hline & & & \$ 10 \text { per unit at end of } \
3 & 1600 & \text { Enventory holding cost } & \text { guarter } \
\hline 4 & 1500 & \text { Hiring workers } & \$ 40 \text { per unit } \
\hline & & \text { Laving off workers } & \$ 80 \text { per unit } \
\hline & & \text { Subcontractingcost } & \$ 60 \text { per unit } \
\hline & & \text { Unit cost } & \$ 30 \text { per unit } \
\hline & &\text { Overtine } & \$ 15 \text { extra per unit }\
\hline
\end{array}$ Which of the following production plans is better: Plan A-chase demand by hiring and layoffs; Plan B-pure level strategy, or Plan C-1350 level with the remainder by subcontracting?

Accepted Answer

Plan A will cost $215,000, Plan B will c

Question 5

One question that operations managers must ask when generating an aggregate plan is what factors are likely to influence demand and by how much.

Accepted Answer

A) True 
 B)False

Question 6

A firm uses the pure chase strategy of aggregate planning. It produced 900 units in the last period. Demand in the next period is estimated at 1200, and demand over the next six periods (its aggregate planning horizon) is estimated to average 1000 units. In following the chase strategy, the firm will?

Accepted Answer

Hire worke

Question 7

Mixed strategies in aggregate planning utilize inventory, workforce, and production rate changes over the planning horizon.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is not associated with manipulation of product or service demand?

Accepted Answer

A)  price cuts or discounts 
B)  promotion 
C)  subcontracting 
D)  counterseasonal products or services 
E)  advertising 
A)  price cuts or discounts 
B)  promotion 
C)  subcontracting 
D)  counterseasonal products or services 
E)  advertising

Question 9

Which of the following aggregate planning methods does not work if hiring and layoffs are possible?

Accepted Answer

A)  the linear decision rule 
B)  simulation 
C)  the management coefficients model 
D)  the transportation method 
E)  graphical methods 
A)  the linear decision rule 
B)  simulation 
C)  the management coefficients model 
D)  the transportation method 
E)  graphical methods

Question 10

The management coefficients model is a formal planning model built around a manager's experience and performance.

Accepted Answer

A) True 
 B)False

Question 11

Because service firms do not inventory their output, pure chase strategy is not appropriate.

Accepted Answer

A) True 
 B)False

Question 12

Aggregate planning would entail which of the following production aspects at BMW for a 12 month period?

Accepted Answer

A)  number of cars with a hi-fi stereo system to produce 
B)  number of two-door vs. four-door cars to produce 
C)  number of green cars to produce 
D)  total number of cars to produce 
E)  number of cars to e exported 
A)  number of cars with a hi-fi stereo system to produce 
B)  number of two-door vs. four-door cars to produce 
C)  number of green cars to produce 
D)  total number of cars to produce 
E)  number of cars to e exported

Question 13

Among the mathematical approaches to aggregate planning, ________ is good at working with inventories, holding costs, overtime, and subcontracting, but not with hiring and layoffs.

Accepted Answer

the transp

Question 14

An electronics manufacturer makes video security systems for parking lots. Demand estimates for the next four quarters are 15, 9, 23, and 17 units. Prepare an aggregate plan that uses inventory, regular time, overtime, and back orders. Subcontracting is not allowed. Regular time capacity is 12 units for quarters 1 and 2, 15 units for quarters 3 and 4. Overtime capacity is 6 units per quarter. Regular time cost is $20,000 per system, while overtime cost is $30,000 per unit. Back order cost is $2000 per system per quarter; inventory holding cost is $500 per unit per quarter. Beginning inventory is zero.
Complete the table of data inputs for solving this aggregate planning problem with the transportation method. Specifically, how many sources are there, and how many destinations? What is the supply from each source, and the demand of each destination? What is the cost of each source-destination pair?

Accepted Answer

There are eight sources: regular time an

Question 15

Aggregate planning is capacity planning for

Accepted Answer

A)  the long range. 
B)  the intermediate range. 
C)  the short range. 
D)  typically one to three months. 
E)  typically three or more years. 
A)  the long range. 
B)  the intermediate range. 
C)  the short range. 
D)  typically one to three months. 
E)  typically three or more years.

Question 16

A firm's demand in the next four quarters (its aggregate planning horizon) is forecast to be 190, 160, 150, and 200 units. Last quarter, the firm produced 150 units. If it uses level scheduling, the firm will hire/layoff workers?

Accepted Answer

Hire workers to perm

Question 17

A manager is applying the transportation model of linear programming to solve an aggregate planning problem. Demand in period 1 is 100 units and in period 2 demand is 150 units. The manager has 125 hours of regular employment available for $10/hour each period. In addition, 50 hours of overtime are available for $15/hour each period. If holding costs are $2 per unit each period, how many hours of regular employment should be used in period 1 (assume demand must be met in both periods 1 and 2 for the lowest possible cost and that production is 1 unit per hour)?

Accepted Answer

A)  100 
B)  125 
C)  150 
D)  50 
E)  175 
A)  100 
B)  125 
C)  150 
D)  50 
E)  175

Question 18

Which of the following statements about aggregate planning is false?

Accepted Answer

A)  Hiring, layoffs, overtime, and subcontracting are methods of manipulating capacity. 
B)  Aggregate planning produces a plan detailing which products are made and in what quantities. 
C)  Yield management is a way of manipulating product or service demand. 
D)  Aggregate planning uses the adjustable part of capacity to meet production requirements. 
E)  The transportation method is an optimizing technique for aggregate planning. 
A)  Hiring, layoffs, overtime, and subcontracting are methods of manipulating capacity. 
B)  Aggregate planning produces a plan detailing which products are made and in what quantities. 
C)  Yield management is a way of manipulating product or service demand. 
D)  Aggregate planning uses the adjustable part of capacity to meet production requirements. 
E)  The transportation method is an optimizing technique for aggregate planning.

Question 19

The only objective of aggregate planning is to minimize the cost of matching capacity to demand over the planning period.

Accepted Answer

A) True 
 B)False

Question 20

Byron's Manufacturing makes tables. Demand for the next four months and capacities of the plant are shown in the table below. Unit cost on regular time is $40. Overtime cost is 150% of regular time cost. Subcontracting is available in substantial quantity at $75 per unit. Holding costs are $5 per table per month; back orders cost the firm $10 per unit per month. Byron's management believes that the transportation algorithm can be used to optimize this scheduling problem. The firm has 50 units of beginning inventory and anticipates no ending inventory.
 $$\begin{array} { | l | l | l | l | l | } 
\hline & \text { March } & \text { April } & \text { May } & \text { Tune } \
\hline \text { Demand } & 400 & 600 & 600 & 700 \
\hline \text { Regular capacity } & 400 & 400 & 400 & 400 \
\hline \text { Overtime capacity } & 100 & 100 & 100 & 100 \
\hline \text { Subcontract cap. } & 150 & 50 & 50 & 50 \
\hline
\end{array}$$ a. How many units will be produced on regular time in June?
b. How many units will be produced by subcontracting over the four-month period?
c. What will be the inventory at the end of April?
d. What will be total production from all sources in April?
e. What will be the total cost of the optimum solution?
f. Does the firm utilize the expensive options of subcontracting and back ordering? When; why?

Accepted Answer

(a) 400; (b) 250; (c) 0; (d) 550; (e) To

Exam 13: Aggregate Planning

Which of the following would most likely fall under the scope of only an operations manager?

One of the four things needed for aggregate planning is a logical overall unit for measuring sales and output.

Most people would argue that a service firm must follow chase or mixed strategies. On the other hand, most state agencies, which are clearly service-oriented, are not at all able to "chase" demand. Discuss how they manipulate demand to allow the level strategy to be used.

One question that operations managers must ask when generating an aggregate plan is what factors are likely to influence demand and by how much.

Mixed strategies in aggregate planning utilize inventory, workforce, and production rate changes over the planning horizon.

Which of the following is not associated with manipulation of product or service demand?

Which of the following aggregate planning methods does not work if hiring and layoffs are possible?

The management coefficients model is a formal planning model built around a manager's experience and performance.

Because service firms do not inventory their output, pure chase strategy is not appropriate.

Aggregate planning would entail which of the following production aspects at BMW for a 12 month period?

Among the mathematical approaches to aggregate planning, ________ is good at working with inventories, holding costs, overtime, and subcontracting, but not with hiring and layoffs.

Aggregate planning is capacity planning for

A firm's demand in the next four quarters (its aggregate planning horizon) is forecast to be 190, 160, 150, and 200 units. Last quarter, the firm produced 150 units. If it uses level scheduling, the firm will hire/layoff workers?

Which of the following statements about aggregate planning is false?

The only objective of aggregate planning is to minimize the cost of matching capacity to demand over the planning period.

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

Filters