Exam 12: Aggregate Planning and Sop

What is the typical planning horizon for aggregate planning?

"An optimal plan for minimizing the cost of allocating capacity to meet demand over several planning periods" best describes which of the following?

A small private university normally charges the same price, $500 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 60 percent occupied during the summer session. A student of operations management wonders if revenue 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 7200 credit-hours at the current rate of $500, 10,000 credit hours at $420, 12,000 credit-hours at $350, and 15,000 credit-hours at $300. Based on this demand curve, what price point would best serve the university, if its objective is the greatest revenue for the summer session?

A hotel room that goes unrented and an airline seat that goes unsold are both examples of perishable inventory in services.

Which of the following is the term used for intermediate-range capacity planning with a time horizon of three to eighteen months?

A firm practices a chase strategy. Production last quarter was 1000. Demand over the next four quarters is estimated to be 900, 500, 1000, and 1000. Hiring cost is $20 per unit, and layoff cost is $5 per unit. Over the next year, what will be the sum of hiring and layoff costs?

Techniques for controlling the cost of labor in services include accurate scheduling of labor hours to assure quick response to customer demand, on-call labor for unexpected demand, flexibility of labor skills for reallocation of available labor, and flexibility in rate of output or hours of work to meet changing demand.

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. Which is cheaper: to produce level, incurring back orders and inventory charges; or to produce a base quantity of 140, using first, overtime, then subcontracting, to meet demand?

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

Plans for new product development generally fall within the scope of aggregate planning.

Disaggregation usually results in a sales forecast.

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

Short-range plans are usually for less than ________ months.

Aggregate planning would entail which of the following production aspects at BMW?

What is a disadvantage common to the following two strategies: (1) varying inventory levels and (2) backordering during periods of high demand?

The output of S&OP is called:

________ for developing aggregate plans work with a few variables at a time and are easy to understand and use.

Osprey Fabrication has the following aggregate demand requirements and other data for the upcoming four quarters. 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?

Under which of the following do planning tasks associated with job assignments, ordering, job scheduling, and dispatching typically fall?

A professional services firm is investigating revenue 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?