Question 1

Top executives tend to focus their attention on which type of forecasts?

Accepted Answer

A)  short-range 
B)  medium-range 
C)  long-range 
D)  weather 
E)  the forecast for the next day's absentee levels 
A)  short-range 
B)  medium-range 
C)  long-range 
D)  weather 
E)  the forecast for the next day's absentee levels

Question 2

Eagle Fabrication has the following aggregate demand requirements and other data for the upcoming four quarters.
 $$\begin{array} { | l | l | l | l | } 
\hline \text { Quarter } & \text { Demand } & \text { Previous quarter's output } & 1500 \text { units } \
\hline 1 & 1300 & \text { Beginning inventory } & 200 \text { units } \
\hline 2& 1400 & \text { Stockout cost } & \$ 50 \text { per unit } \
\hline 3 & 1500 & \text { Inventory holding cost } & \$ 10 \text { per unit at end of quarter } \
\hline 4 & 1300 & \text { Hiring workers } & \$ 4 \text { per unit } \
\hline & & \text { Laying off workers } & \$ 8 \text { per unit } \
\hline & & \text { Unit cost } & \$ 30 \text { per unit } \
\hline & & \text { Overtime } & \$ 10 \text { extra per unit } \
\hline
\end{array}$$ Which of the following production plans is better: Plan A-chase demand by hiring and layoffs; or Plan B-produce at a constant rate of 1200 and obtain the remainder from overtime?

Accepted Answer

Plan A would cost $165,400, while Plan B

Question 3

Which of the following is not an ingredient for controlling labour cost in services?

Accepted Answer

A)  accurate scheduling of labour-hours to assure quick response to customer demand 
B)  an on-call labour resource that can be added or deleted to meet unexpected demand 
C)  contract overseas labour to obtain a lower wage scale 
D)  flexibility of individual worker skills that permits reallocation of available labour 
E)  flexibility in rate of output or hours of work to meet changing demand 
A)  accurate scheduling of labour-hours to assure quick response to customer demand 
B)  an on-call labour resource that can be added or deleted to meet unexpected demand 
C)  contract overseas labour to obtain a lower wage scale 
D)  flexibility of individual worker skills that permits reallocation of available labour 
E)  flexibility in rate of output or hours of work to meet changing demand

Question 4

Disaggregation

Accepted Answer

A)  breaks the aggregate plan into greater detail. 
B)  transforms the master production schedule into an aggregate plan. 
C)  calculates the optimal price points for yield management. 
D)  converts product schedules and labour assignments to a facility-wide plan. 
E)  is an assumption required for the use of the transportation model in aggregate planning. 
A)  breaks the aggregate plan into greater detail. 
B)  transforms the master production schedule into an aggregate plan. 
C)  calculates the optimal price points for yield management. 
D)  converts product schedules and labour assignments to a facility-wide plan. 
E)  is an assumption required for the use of the transportation model in aggregate planning.

Question 5

A firm practices the pure chase strategy. Production last quarter was 1000. Demand over the next four quarters is estimated to be 900, 700, 1000, and 1000. Hiring cost is $20 per unit, and firing cost is $5 per unit. Over the next year, the sum of hiring and layoff costs will be

Accepted Answer

A)  $500. 
B)  $2,500. 
C)  $7,500. 
D)  $7,000. 
E)  $12,500. 
A)  $500. 
B)  $2,500. 
C)  $7,500. 
D)  $7,000. 
E)  $12,500.

Question 6

________ is the process of breaking the aggregate plan into greater detail.

Accepted Answer

The answer of ________ is the process of breaking the...

Question 7

Which of the following is not consistent with a pure level strategy?

Accepted Answer

A)  varying the use of subcontracting 
B)  finding alternative work for employees during low-demand periods 
C)  using built-up inventory to meet demand requirements 
D)  varying production levels and/or workforce to meet demand requirements 
E)  increasing the use of inventory to meet demand requirements 
A)  varying the use of subcontracting 
B)  finding alternative work for employees during low-demand periods 
C)  using built-up inventory to meet demand requirements 
D)  varying production levels and/or workforce to meet demand requirements 
E)  increasing the use of inventory to meet demand requirements

Question 8

A firm uses the pure chase strategy of aggregate planning. It produced 1000 units in the last period. Demand in the next period is estimated at 800, and demand over the next six periods (its aggregate planning horizon) is estimated to average 900 units. In following the chase strategy, the firm will

Accepted Answer

A)  add 100 units to inventory in the next period. 
B)  add 200 units to inventory in the next period. 
C)  hire workers to match the 100 unit difference. 
D)  lay off workers to match the 200 unit difference. 
E)  implement a lower price point to increase demand. 
A)  add 100 units to inventory in the next period. 
B)  add 200 units to inventory in the next period. 
C)  hire workers to match the 100 unit difference. 
D)  lay off workers to match the 200 unit difference. 
E)  implement a lower price point to increase demand.

Question 9

What is the typical planning horizon for aggregate planning?

Accepted Answer

The typical planning

Question 10

Which of these is not a characteristic that makes yield management attractive to organizations that have perishable inventory?

Accepted Answer

A)  Demand can be segmented. 
B)  Service can be sold in advance of consumption. 
C)  Capacity is easily changed. 
D)  Variable costs are low and fixed costs are high. 
E)  Demand fluctuates. 
A)  Demand can be segmented. 
B)  Service can be sold in advance of consumption. 
C)  Capacity is easily changed. 
D)  Variable costs are low and fixed costs are high. 
E)  Demand fluctuates.

Question 11

The ________ strategy sets production equal to forecasted demand.

Accepted Answer

The answer of The ________ strategy sets production equal to...

Question 12

Which of the following uses regression to incorporate historical managerial performance into aggregate planning?

Accepted Answer

A)  transportation method 
B)  simulation 
C)  linear decision rule 
D)  management coefficients model 
E)  keiretsu 
A)  transportation method 
B)  simulation 
C)  linear decision rule 
D)  management coefficients model 
E)  keiretsu

Question 13

A firm uses graphical techniques in its aggregate planning efforts. Over the next twelve months (its intermediate period) it estimates the sum of demands to be 105,000 units. The firm has 250 production days per year. In January, which has 22 production days, demand is estimated to be 11,000 units. A graph of demand versus level production will show that

Accepted Answer

A)  the January requirement is below level production of 420 units. 
B)  level production is approximately 1000 units per day. 
C)  level production of 420 units per day is below the January requirement. 
D)  level production is approximately 420 units per month. 
E)  the firm must hire workers between December and January. 
A)  the January requirement is below level production of 420 units. 
B)  level production is approximately 1000 units per day. 
C)  level production of 420 units per day is below the January requirement. 
D)  level production is approximately 420 units per month. 
E)  the firm must hire workers between December and January.

Question 14

The strategies of aggregate planning are broadly divided into demand options and capacity options.

Accepted Answer

A) True 
 B)False

Question 15

A large consulting firm is deciding on if its workforce should be expanded, maintained, or decreased. Suppose that demand is given in week long projects, and that a consultant can work on 3 projects each month (1 week off for personal leave and/or other duties such as conferences, etc.). Currently there are 25 consultants. Ten consultants are trained for LEAN and 15 for Six Sigma, with 5 of those consultants being overlaps (the consultant is trained for BOTH LEAN and Six Sigma). Assume that all consultants can do the general work. Complete the table (the forecast period is an upcoming month) and prepare a recommendation.
 $$\begin{array} { | c | c | c | c | c | c | } 
\hline \text { Category } & \begin{array} { c } 
\text { Best Forecast } \
\text { (\# projects) }
\end{array} & \begin{array} { c } 
\text { Likely } \
\text { Forecast } \
\text { (\# projects) }
\end{array} & \begin{array} { c } 
\text { Worst } \
\text { Forecast } \
\text { (\# projects) }
\end{array} & \begin{array} { c } 
\text { Max Demand } \
\text { in \# of } \
\text { people }
\end{array} & \begin{array} { c } 
\text { Number of } \
\text { Qualified } \
\text { People }
\end{array} \
\hline \text { LEAN } & 42 & 24 & 12 & & \
\hline \text { Six Sigma } & 45 & 36 & 30 & & \
\hline \text { General } & 75 & 60 & 57 & & \
\hline
\end{array}$$

Accepted Answer

@#IMG-DLM& NOTE: Student responses will vary but s

Question 16

Which choice best describes level scheduling?

Accepted Answer

A)  Daily production is variable from period to period. 
B)  Subcontracting, hiring, and layoffs manipulate supply. 
C)  Price points are calculated to match demand to capacity. 
D)  Inventory goes up or down to buffer the difference between demand and production. 
E)  Seasonal demand fluctuations are matched without hirings or layoffs. 
A)  Daily production is variable from period to period. 
B)  Subcontracting, hiring, and layoffs manipulate supply. 
C)  Price points are calculated to match demand to capacity. 
D)  Inventory goes up or down to buffer the difference between demand and production. 
E)  Seasonal demand fluctuations are matched without hirings or layoffs.

Question 17

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

Accepted Answer

management

Question 18

What are the disadvantages common to the following two strategies: (1) varying inventory levels and (2) back ordering during periods of high demand?

Accepted Answer

Varying inventory levels and b

Question 19

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

In period 2 all regular work will be use

Question 20

What are successful techniques of controlling the cost of labour involved in service firms?

Accepted Answer

Successful techniques include:
1. accura

Exam 13: Aggregate Planning

Top executives tend to focus their attention on which type of forecasts?

Which of the following is not an ingredient for controlling labour cost in services?

Disaggregation

A firm practices the pure chase strategy. Production last quarter was 1000. Demand over the next four quarters is estimated to be 900, 700, 1000, and 1000. Hiring cost is $20 per unit, and firing cost is $5 per unit. Over the next year, the sum of hiring and layoff costs will be

________ is the process of breaking the aggregate plan into greater detail.

Which of the following is not consistent with a pure level strategy?

What is the typical planning horizon for aggregate planning?

Which of these is not a characteristic that makes yield management attractive to organizations that have perishable inventory?

The ________ strategy sets production equal to forecasted demand.

Which of the following uses regression to incorporate historical managerial performance into aggregate planning?

The strategies of aggregate planning are broadly divided into demand options and capacity options.

Which choice best describes level scheduling?

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

What are the disadvantages common to the following two strategies: (1) varying inventory levels and (2) back ordering during periods of high demand?

What are successful techniques of controlling the cost of labour involved in service firms?

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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