Question 1

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

Accepted Answer

A) material requirements planning 
B) short-range planning 
C) strategic planning 
D) aggregate planning 
E) tactical planning 
A) material requirements planning 
B) short-range planning 
C) strategic planning 
D) aggregate planning 
E) tactical planning

Question 2

Houma Containers,Inc. ,makes industrial fibreglass tanks that are used on offshore oil platforms.Demand for the next four months and capacities of the plant are shown in the table below.Unit cost on regular time is $400.Overtime cost is 150% of regular time cost.Subcontracting is available in substantial quantity but at a very high cost,$1100 per unit.Holding costs are $200 per tank per month;back orders cost the firm $1000 per unit per month.Houma's management believes that the transportation algorithm can be used to optimize this scheduling problem.The firm has no beginning inventory and anticipates no ending inventory.
   a.How many units will be produced on regular time in June?
b.How many units will be produced by subcontracting over the four-month period?
c.What will be the inventory at the end of April?
d.What will be total production from all sources in April?
e.What will be the total cost of the optimum solution?
f.Does the firm utilize the expensive options of subcontracting and back ordering? When;why?

Accepted Answer

(a)250; (b)350; (c)0,and 50 units are ba

Question 3

If a service firm were to attempt a pure level strategy for aggregate planning,should its level of output be at average demand,peak demand,or minimum demand?

Accepted Answer

This is a critical-thinking item for stu

Question 4

A hotel chain is considering using yield management to increase profits.Its plan is to sell unsold rooms at a discounted rate very close to the night of stay.For example,an unsold Friday night room would be discounted early in the week.It estimates that the percentage of sold rooms (total)would be equal to 50 + X,where X is the % discounted off of regular price.Meanwhile the % of rooms sold for full price compared to the discount would be 100 - 2X (some people would wait to book gambling a discount would happen).Find the ideal discount %.

Accepted Answer

Revenue is equal to demand ∗ (% sold at

Question 5

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 6

What is the primary management challenge when implementing yield management?

Accepted Answer

Identifying differen

Question 7

Golden Eagle Machine Works has the following demand requirements and other data for the upcoming four quarters.
   What is the total cost of pursuing a chase aggregate plan over the coming year?

Accepted Answer

For a chase strategy,quarterly

Question 8

A hotel room that goes unrented,a dental appointment that no patient booked,and an airline seat that went unsold,are all examples of ________ in services inventory.

Accepted Answer

The answer of A hotel room that goes unrented,a dental...

Question 9

Which of the following is consistent with a pure chase strategy?

Accepted Answer

A) vary production levels to meet demand requirements 
B) vary workforce to meet demand requirements 
C) vary production levels and workforce to meet demand requirements 
D) little or no use of inventory to meet demand requirements 
E) All of the above are consistent with a pure chase strategy. 
A) vary production levels to meet demand requirements 
B) vary workforce to meet demand requirements 
C) vary production levels and workforce to meet demand requirements 
D) little or no use of inventory to meet demand requirements 
E) All of the above are consistent with a pure chase strategy.

Question 10

Mixed strategies in aggregate planning utilize inventory,workforce,and production rate changes over the planning horizon.

Accepted Answer

A) True 
 B)False

Question 11

Aggregate planning occurs over the medium or intermediate future of 3 to 18 months.

Accepted Answer

A) True 
 B)False

Question 12

Controlling the cost of labour in services involves quick response to consumer demand,on-call labour for unexpected demand,flexibility of labour for reallocation,and flexibility of hours or rate of output of individual workers.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following attempts to manipulate product or service demand?

Accepted Answer

A) inventories 
B) part-time workers 
C) subcontracting 
D) overtime/idle time 
E) price cuts 
A) inventories 
B) part-time workers 
C) subcontracting 
D) overtime/idle time 
E) price cuts

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

management

Question 16

The use of part-time workers as an aggregate planning option may be less costly than using full-time workers,but may also reduce quality levels.

Accepted Answer

A) True 
 B)False

Question 17

Dependence on an external source of supply is found in which of the following aggregate planning strategies?

Accepted Answer

A) varying production rates through overtime or idle time 
B) subcontracting 
C) using part-time workers 
D) back ordering during high demand periods 
E) hiring and laying off 
A) varying production rates through overtime or idle time 
B) subcontracting 
C) using part-time workers 
D) back ordering during high demand periods 
E) hiring and laying off

Question 18

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

A) 100 
B) 125 
C) 150 
D) 50 
E) 175 
A) 100 
B) 125 
C) 150 
D) 50 
E) 175

Question 19

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) mixed variable and semi-fixed 
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) mixed variable and semi-fixed

Question 20

Because service firms do not inventory their output,pure chase strategy is not appropriate.

Accepted Answer

A) True 
 B)False

Exam 13: Aggregate Planning

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

If a service firm were to attempt a pure level strategy for aggregate planning,should its level of output be at average demand,peak demand,or minimum demand?

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

What is the primary management challenge when implementing yield management?

Golden Eagle Machine Works has the following demand requirements and other data for the upcoming four quarters. What is the total cost of pursuing a chase aggregate plan over the coming year?

A hotel room that goes unrented,a dental appointment that no patient booked,and an airline seat that went unsold,are all examples of ________ in services inventory.

Which of the following is consistent with a pure chase strategy?

Mixed strategies in aggregate planning utilize inventory,workforce,and production rate changes over the planning horizon.

Aggregate planning occurs over the medium or intermediate future of 3 to 18 months.

Controlling the cost of labour in services involves quick response to consumer demand,on-call labour for unexpected demand,flexibility of labour for reallocation,and flexibility of hours or rate of output of individual workers.

Which of the following attempts to manipulate product or service demand?

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

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

The use of part-time workers as an aggregate planning option may be less costly than using full-time workers,but may also reduce quality levels.

Dependence on an external source of supply is found in which of the following aggregate planning strategies?

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

Because service firms do not inventory their output,pure chase strategy is not appropriate.

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