Scenario 8.2 - Willow A company faces the aggregate planning problem shown in the table below. Cost of regular production is $8 per unit, the cost of producing the same unit on overtime is $15, the cost of subcontracting is $12 per unit, and the cost of carrying a unit in inventory from one month to the next is $6. $\begin{array}{|l|c|c|c|c|c|} \hline & \text { January } & \text { February } & \text { March } & \text { April } & \text { May } \\ \hline \text { Forecast } & 400 & 800 & 1200 & 700 & 300 \\ \hline \text { Beginning Inventory } & 100 & & & & \\ \hline \text { Regular Time } & & & & & \\ \hline \text { Qvertime } & & & & & \\ \hline \text { Subcontracting } & & & & & \\ \hline \text { Ending Inventory } & & & & & \\ \hline \end{array}$ The labor contract at the plant prohibits both overtime and subcontracting output to exceed 400 units in any five month window. The plant capacity is 20 units per day produced using two shifts and the plant runs seven days a week. By policy, management wants to avoid stockouts. -How many units are produced using overtime in the optimal aggregate plan developed to address Scenario 8.2?

A) 360 B) 200 C) 400 D) 280 A) 360 B) 200 C) 400 D) 280

Scenario 8.1-Gang Aft Agley Gang Aft Agley, a manufacturing company, faces the aggregate planning problem shown in the table below. Cost of regular production is $5 per unit, the cost of producing the same unit on overtime is $7.50, the cost of subcontracting is $9 per unit, and the cost of carrying a unit in inventory from one month to the next is $2. $\begin{array}{|l|c|c|c|c|c|} \hline & \text { January } & \text { February } & \text { March } & \text { April } & \text { May } \\ \hline \text { Forecast } & 500 & 750 & 1200 & 650 & 300 \\ \hline \text { Beginning Inventory } & 100 & & & & \\ \hline \text { Regular Time } & & & & & \\ \hline \text { Overtime } & & & & & \\ \hline \text { Subcontracting } & & & & & \\ \hline \text { Ending Inventory } & & & & & \\ \hline \end{array}$ The labor contract at the plant prohibits both overtime and subcontracting output to exceed 300 units in any five month window. The plant capacity is 600 units per month produced using two shifts, regardless of the number of days in a month. By policy, management wants to avoid stockouts. -Use the information from Scenario 8.1 to determine the number of constraints in this scenario.

A) 12 B) 15 C) 20 D) 24 A) 12 B) 15 C) 20 D) 24

Exam 8: Aggregate Planning in a Supply Chain

Scenario 8.2 - Willow A company faces the aggregate planning problem shown in the table below. Cost of regular production is $8 per unit, the cost of producing the same unit on overtime is $15, the cost of subcontracting is $12 per unit, and the cost of carrying a unit in inventory from one month to the next is $6. January February March April May Forecast 400 800 1200 700 300 Beginning Inventory 100 Regular Time Qvertime Subcontracting Ending Inventory The labor contract at the plant prohibits both overtime and subcontracting output to exceed 400 units in any five month window. The plant capacity is 20 units per day produced using two shifts and the plant runs seven days a week. By policy, management wants to avoid stockouts. -How many units are produced using overtime in the optimal aggregate plan developed to address Scenario 8.2?

(Multiple Choice)

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Question 21

How frequently should the aggregate plan be rerun?

(Multiple Choice)

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Question 22

As capacity utilization increases, it becomes less important to perform aggregate planning.

(True/False)

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Question 23

Aggregate planning, to be effective, requires inputs from

(Multiple Choice)

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Question 24

Linear programming finds the solution that creates the highest profit while satisfying the constraints that a company faces.

(True/False)

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Question 25

The aggregate planning problem is concerned with determining the production level, inventory level, and capacity level (internal and outsourced) for each period that maximizes the firm's profit over the planning horizon.

(True/False)

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(38)

Question 26

The operational parameter concerned with the number of workers/units of capacity needed for production is

(Multiple Choice)

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(40)

Question 27

The process by which a company determines levels of capacity, production, subcontracting, inventory, stockouts, and even pricing over a specified time horizon is

(Multiple Choice)

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(41)

Question 28

Discuss the primary objective and operational parameters of aggregate planning.

(Essay)

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Question 29

The goal of aggregate planning is to satisfy demand in a way that minimizes profit.

(True/False)

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(36)

Question 30

Forecasting errors are dealt with in aggregate plans using either safety backlog or safety capacity.

(True/False)

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Question 31

Scenario 8.1-Gang Aft Agley Gang Aft Agley, a manufacturing company, faces the aggregate planning problem shown in the table below. Cost of regular production is $5 per unit, the cost of producing the same unit on overtime is $7.50, the cost of subcontracting is $9 per unit, and the cost of carrying a unit in inventory from one month to the next is $2. January February March April May Forecast 500 750 1200 650 300 Beginning Inventory 100 Regular Time Overtime Subcontracting Ending Inventory The labor contract at the plant prohibits both overtime and subcontracting output to exceed 300 units in any five month window. The plant capacity is 600 units per month produced using two shifts, regardless of the number of days in a month. By policy, management wants to avoid stockouts. -Use the information from Scenario 8.1 to determine the number of constraints in this scenario.

(Multiple Choice)

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Question 32

________ is used to determine customer service levels.

(Multiple Choice)

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Question 33

A poor aggregate plan may result in a large amount of excess inventory and capacity, thereby raising costs.

(True/False)

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(32)

Question 34

The strategy where workforce (capacity) is kept stable but the number of hours worked is varied over time in an effort to synchronize production with demand is the

(Multiple Choice)

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(34)

Question 35

The quality of the forecast can be improved by using information from

(Multiple Choice)

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Question 36

Which of these software vendors offer advanced planning systems?

(Multiple Choice)

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Question 37

Aggregate planning is a process by which a company determines levels of capacity, production, subcontracting, inventory, stockouts, and even pricing over a specified time horizon.

(True/False)

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Question 38

What is the name of the plan that breaks apart the aggregate plan into distinct product families?

(Multiple Choice)

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(40)

Question 39

Advanced planning systems for aggregate planning rely heavily on ________ to deliver their full potential.

(Multiple Choice)

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Question 40

How frequently should the aggregate plan be rerun?

As capacity utilization increases, it becomes less important to perform aggregate planning.

Aggregate planning, to be effective, requires inputs from

Linear programming finds the solution that creates the highest profit while satisfying the constraints that a company faces.

The aggregate planning problem is concerned with determining the production level, inventory level, and capacity level (internal and outsourced) for each period that maximizes the firm's profit over the planning horizon.

The operational parameter concerned with the number of workers/units of capacity needed for production is

The process by which a company determines levels of capacity, production, subcontracting, inventory, stockouts, and even pricing over a specified time horizon is

Discuss the primary objective and operational parameters of aggregate planning.

The goal of aggregate planning is to satisfy demand in a way that minimizes profit.

Forecasting errors are dealt with in aggregate plans using either safety backlog or safety capacity.

________ is used to determine customer service levels.

A poor aggregate plan may result in a large amount of excess inventory and capacity, thereby raising costs.

The strategy where workforce (capacity) is kept stable but the number of hours worked is varied over time in an effort to synchronize production with demand is the

The quality of the forecast can be improved by using information from

Which of these software vendors offer advanced planning systems?

Aggregate planning is a process by which a company determines levels of capacity, production, subcontracting, inventory, stockouts, and even pricing over a specified time horizon.

What is the name of the plan that breaks apart the aggregate plan into distinct product families?

Advanced planning systems for aggregate planning rely heavily on ________ to deliver their full potential.

Understanding the Supply Chain

Supply Chain Performance: Achieving Strategic Fit and Scope

Supply Chain Drivers and Metrics

Designing Distribution Networks and Applications to e-Business

Network Design in the Supply Chain

Designing Global Supply Chain Networks

Demand Forecasting in a Supply Chain

Sales and Operations Planning: Planning Supply and Demand in a Supply Chain

Coordination in a Supply Chain

Managing Economies of Scale in the Supply Chain: Cycle Inventory

Managing Uncertainty in a Supply Chain: Safety Inventory

Determining the Optimal Level of Product Availability

Transportation in a Supply Chain

Sourcing Decisions in a Supply Chain

Pricing and Revenue Management in a Supply Chain

Sustainability and the Supply Chain

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