Question 1

Identify some mathematical approaches to aggregate planning. Which are optimizing?
 Which are heuristic?

Accepted Answer

Some mathematical approaches to aggregat

Question 2

In aggregate planning, one of the adjustable elements of capacity is the extent of subcontracting.

Accepted Answer

A) True 
 B)False

Question 3

Reddick's Specialty Electronics makes weatherproof surveillance systems for parking lots. Demand estimates for the next four quarters are 25, 9, 13, and 17 units. Prepare an aggregate plan that uses inventory, regular time and overtime and back orders. Subcontracting is not allowed. Regular time capacity is 15 units for quarters 1 and 2, 18 units for quarters 3 and 4. Overtime capacity is 3 units per quarter. Regular time cost is $2000 per unit, while overtime cost is $3000 per unit. Back order cost is $300 per unit per quarter; inventory holding cost is $100 per unit per quarter. Beginning inventory is zero.
The data inputs for this problem, and the optimal solution, generated by microcomputer software, appear below. Answer the following questions based on the scenario and the solution.
a. How many total units will be produced in quarter 1 for delivery in quarter 1?
b. How many units in total will be used to fill back orders over the four quarters?
c. What is the cost to produce one unit in Quarter 4 using overtime to deliver in quarter 1 (filling a back order)?
d. At the end of quarter 3, what is the ending inventory of finished systems?
e. What is the total cost of the solution?
f. What is the average cost per unit?

Accepted Answer

@#IMG-DLM& a. 15; b. 10; c. $3

Question 4

The level scheduling strategy allows lower inventories than the pure chase strategy.

Accepted Answer

A) True 
 B)False

Question 5

The __________ strategy maintains a constant output rate, or work force level, over the planning horizon.

Accepted Answer

The answer of The __________ strategy maintains a constant output...

Question 6

Which of the following aggregate planning strategies is a "demand option"?

Accepted Answer

A)  changing price 
B)  subcontracting 
C)  varying production levels 
D)  changing inventory levels 
E)  using part-time workers 
A)  changing price 
B)  subcontracting 
C)  varying production levels 
D)  changing inventory levels 
E)  using part-time workers

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

To use yield management strategies a business should have which combination of costs?

Accepted Answer

A)  high variable and high fixed 
B)  low variable and high fixed 
C)  high variable and low fixed 
D)  low variable and low fixed 
E)  either A or B 
A)  high variable and high fixed 
B)  low variable and high fixed 
C)  high variable and low fixed 
D)  low variable and low fixed 
E)  either A or B

Question 9

Which of the following statements regarding aggregate planning is true?

Accepted Answer

A)  In a pure level strategy, production rates or work force levels are adjusted to match demand requirements over the planning horizon. 
B)  A pure level strategy allows lower inventories when compared to pure chase and hybrid strategies. 
C)  In a mixed strategy, there are changes in both inventory and in work force and production rate over the planning horizon. 
D)  Because service firms have no inventory, the pure chase strategy does not apply. 
E)  All of the above are true. 
A)  In a pure level strategy, production rates or work force levels are adjusted to match demand requirements over the planning horizon. 
B)  A pure level strategy allows lower inventories when compared to pure chase and hybrid strategies. 
C)  In a mixed strategy, there are changes in both inventory and in work force and production rate over the planning horizon. 
D)  Because service firms have no inventory, the pure chase strategy does not apply. 
E)  All of the above are true.

Question 10

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 11

Why do some firms have longer planning horizons than others?

Accepted Answer

Aggregate planning is usually considered

Question 12

What is disaggregation?

Accepted Answer

Disaggregation is th

Question 13

Frito-Lay uses aggregate planning to match capacity with demand because of the __________ associated with its specialized processes.

Accepted Answer

A)  high variable cost and high fixed cost 
B)  high variable cost and low fixed cost 
C)  low variable cost and high fixed cost 
D)  low variable cost and low fixed cost 
E)  none of the above 
A)  high variable cost and high fixed cost 
B)  high variable cost and low fixed cost 
C)  low variable cost and high fixed cost 
D)  low variable cost and low fixed cost 
E)  none of the above

Question 14

One reason complex models have not found widespread use and application is that

Accepted Answer

A)  managers are lazy 
B)  managers cannot understand how they work 
C)  the models are inaccurate 
D)  good models are time-consuming and managers must often react swiftly to dynamic demand 
E)  the statement is False; complex models are widely used and accepted 
A)  managers are lazy 
B)  managers cannot understand how they work 
C)  the models are inaccurate 
D)  good models are time-consuming and managers must often react swiftly to dynamic demand 
E)  the statement is False; complex models are widely used and accepted

Question 15

A professional services firm is investigating yield 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?

Accepted Answer

The yields of these price points are as

Question 16

What conditions make yield management of interest?

Accepted Answer

The following conditions make yield mana

Question 17

The planning tasks associated with staffing, production, inventory, and sub-contracting levels typically fall under

Accepted Answer

A)  short-range plans 
B)  intermediate-range plans 
C)  long-range plans 
D)  demand options 
E)  strategic planning 
A)  short-range plans 
B)  intermediate-range plans 
C)  long-range plans 
D)  demand options 
E)  strategic planning

Question 18

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)  B, C, and D 
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)  B, C, and D

Question 19

Compare the chase versus level strategy options.

Accepted Answer

The chase strategy sets production equal

Question 20

Which choice below best describes the counterseasonal demand option?

Accepted Answer

A)  producing such products as lawnmowers and sunglasses during the winter 
B)  developing a mix of products that smoothes out their demands 
C)  lowering prices when demand is slack 
D)  using subcontractors only when demand is excessive 
E)  the breaking of the aggregate plan into finer levels of detail 
A)  producing such products as lawnmowers and sunglasses during the winter 
B)  developing a mix of products that smoothes out their demands 
C)  lowering prices when demand is slack 
D)  using subcontractors only when demand is excessive 
E)  the breaking of the aggregate plan into finer levels of detail

Exam 16: Aggregate Planning

Identify some mathematical approaches to aggregate planning. Which are optimizing? Which are heuristic?

In aggregate planning, one of the adjustable elements of capacity is the extent of subcontracting.

The level scheduling strategy allows lower inventories than the pure chase strategy.

The __________ strategy maintains a constant output rate, or work force level, over the planning horizon.

Which of the following aggregate planning strategies is a "demand option"?

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

To use yield management strategies a business should have which combination of costs?

Which of the following statements regarding aggregate planning is true?

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

Why do some firms have longer planning horizons than others?

What is disaggregation?

Frito-Lay uses aggregate planning to match capacity with demand because of the __________ associated with its specialized processes.

One reason complex models have not found widespread use and application is that

What conditions make yield management of interest?

The planning tasks associated with staffing, production, inventory, and sub-contracting levels typically fall under

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

Compare the chase versus level strategy options.

Which choice below best describes the counterseasonal demand option?

Operations and Productivity

Operations Strategy in a Global Environment

Project Management

Forecasting

Design of Goods and Services

Managing Quality

Statistical Process Control

Process Strategy

Capacity and Constraint Management

Location Strategies

Layout Strategies

Human Resources, Job Design, and Work Measurement

Supply-Chain Management

Outsourcing as a Supply-Chain Strategy

Inventory Management

Material Requirements Planning MRP and ERP

Short-Term Scheduling

Just-In-Time and Lean Options

Maintenance and Reliability

Decision-Making Tools

Linear Programming

Transportation Models

Waiting-Line Models

Learning Curves

Simulation

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