Exam 16: Aggregate Planning

List, in order, the five steps of the graphical method of aggregate planning. Is it possible that these steps can be properly followed and the solution properly implemented without using a graph? Explain.

A manufacturer of industrial seafood processing equipment wants you to develop an aggregate plan for the four quarters of the upcoming year using the following data on demand and capacity. Regular Over- Sub- Initial inventory 250 units Quarter Units Time Time contract Regular time cost \ 1.25 /unit 1 200 400 80 100 Overtime cost \ 1.50/ unit 2 750 400 80 100 Subcontracting cost 2.00/ unit 3 1200 800 160 100 Carrying cost \ 0.50/ unit/quarter No back ordering 4 450 400 80 100 is allowed a. Find the optimal plan using the transportation method. b. What is the cost of the plan? c. Does any regular time capacity go unused? How much in what periods? d. What capacity went unused in this solution (list in detail)?

Finding an ideal mixed strategy is complicated by the huge number of possible strategies.

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

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

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

A small private university normally charges the same price -$200-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 (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 9000 credit-hours at the current rate of $200, 12,000 credit hours at $180, 15,000 credit-hours at $160, and 18,000 credit-hours at $140. Based on this demand curve, what price point would best serve the university, if its objective is the greatest revenue for the summer session?

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.

The text states that trial-and-error methods continue to be widely used, in spite of the development of various models. Using your knowledge from earlier in this course or from other quantitative courses you might have taken, speculate on why managers continue to use "primitive" devices when such sophistication is available.

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

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?

Fairview Industries is preparing its aggregate plan for the second half of the year. The table below contains monthly demand estimates and working days per month. Complete the table by computing total demand, demand per day (for each month), and the average requirement (in units per day) over the six-month planning horizon. Prepare a graph of forecast demand and level production, by months, for the planning period. Label your graph carefully. Expected Production Demand per Month Demand Days Day Tuly 18,000 20 Aurgust 21,000 23 September 17,500 21 October 12,500 21 November 12,000 20 December 13,500 21 TOTAL

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

What is the purpose of aggregate planning? Describe some demand and capacity options for implementing plans.

Which of the following inputs helps an aggregate planner select the rate of output for a facility over the next 3 to 18 months?

Golden Eagle Machine Works has the following demand requirements and other data for the upcoming four quarters. Quarter Demand Previous quarter's output 2500 units 1 2300 Beginning inventory 200 units 2 2400 Stockout cost \ 50 per unit 3 2600 Iniventory holding cost \ 10 per unit at end of quarter 4 2100 Hiring workers \4 per unit Laying off workers \ 8 per unit Laying off workers \8 per unit Unit cost \ 30 per unit What is the total cost of pursuing a chase aggregate plan over the coming year?

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. Month Demand Costs and other data 1 220 Previous output level 150 units 2 160 Beginning inventory 100 units 3 200 Stockout cost \ 250 per unit 4 210 Inventory holding cost \ 100 per unit at end of month 5 200 Unit Cost, regular time \ 1,200 per unit 6 190 Subcontracting \ 2,000 per unit Unit Cost, overtime \ 1,500 per unit Hiring workers \ 200 per unit Laving off workers \ 500 per unit 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?

Which of the following is not one of the four things needed for aggregate planning?

The transportation method of linear programming is an optimizing approach to aggregate planning.

Industries in which quadrant of the Yield Management Matrix are traditionally associated with revenue management? (In other words, in which quadrant are yield management techniques easiest to apply? )