Deck 13: Aggregate Planning to Balance Supply and Demand

Question 1

Overstaffing seldom places burdens on the human resources managers who have to deal with personnel needs and the long-term repercussions of asking people to leave without notice.

Answer 1

False

Question 2

Forecasts of demand are subject to statistical variability.Demand cannot be predicted perfectly without a contract.

Answer 2

True

Question 3

When the three levels of the job shop are recognized and taken into account,production scheduling becomes hit-or-miss.In other words,organized chaos is replaced by disorganized chaos.

Answer 3

False

Question 4

Aggregate planning is an external (strategic) production management function as compared to an internal (tactical) function.

Question 5

The sum of aggregated item demands is labeled: total sales,St.The term t must be one month or one year.

Question 6

All production planning factors (e.g.,St ...,Pt ...,It) can be measured against planned normal capacity stated in standard units.

Question 7

The driver of AP (aggregate planning) is forecasted customer demand in standard units.

Question 8

When calculating the costs of level production,it should be remembered that cumulative inventory-which is the sum of It over time-is the measure of actual stock on-hand.During a period of time when demand continuously exceeds supply,this net stock on-hand cannot fall below zero.

Question 9

Loading is the production scheduling function that assigns jobs to departments.This must be done after sequencing jobs within departments.

Question 10

Intermittent flow shops may be preferred because of lumpy demand levels (rather than constant demand levels) over time.

Question 11

Workforce planning is readily accomplished by AP but it is strictly manufacturing and not important to service industries.

Question 12

By varying the size of the workforce,production output can be made to match demand if facilities and equipment allow.

Question 13

The second level of production scheduling consists of assigning jobs to departments that have been equipped and staffed according to the aggregate plan.

Question 14

Aggregate planning is a method used to design a generalized production schedule.

Question 15

Market research indicates that consumers of makeup will travel far and wide to find the lipstick brand and color to which they are loyal.This is equivalent to a fill and kill situation.

Question 16

Information is essential for forecasting at levels two and three,where aggregate units have become specific jobs to be loaded by department and sequenced into ordered queues.

Question 17

Aggregate planning lumps various items together so that the sum reflects aggregate demand.The items to be aggregated must share supply commonalities.There is no point in aggregating jobs that cannot be made at the same facilities.

Question 18

The reason that the term "aggregation" is used is because the specific identities of only some of the units are merged into a common pool of standard units or standard hours.

Question 19

Buyers who refuse to accept backorders create the situation called fill or kill.In that case,the cost of a backorder is a lost sale at the minimum and possibly the loss of a customer over a long purchasing period.

Question 20

Productivity rate and production output rate are not equivalent terms.

Question 21

Workforce size is a variable that is often a function of the volume of business,revenues,and profits.These factors play a part in determining inputs to forecasts for AP modeling.

Question 22

HMMS used only linear cost equations to approximate the actual cost system for the PPG job shop.

Question 23

For the HMMS models. , are four cost coefficients for the expected sum of inventory,backorder and set-up cost

Question 24

Workforce planning is directly related to the control of inventories based on forecasts of supply.

Question 25

The transportation model is flexible in that assignments can be split along rows or within columns.

Question 26

The goal is to find the minimum cost assignment schedule achieved by searching for the production policy for the minimum total cost point as x moves from smooth production to perfect matching of supply and demand.This is the point at which workforce adjustment costs equal inventory and backorder costs.

Question 27

Banks obtain income directly from ATM usage fees (including surcharge).

Question 28

The HMMS model addresses five separate issues-including,in practice,how much is it used?

Question 29

stands for on-hand inventory minus backorders-end of period t.

Question 30

Sensitivity analysis allows investigation of the effect of altering supply capacities,demand levels,and costs on a "what if" basis.

Question 31

Flexible workforce size is better fitted to the configuration of job shops and batch production than it is to flow shop production.

Question 32

The trade-off model provides a convenient representation of the aggregate-planning problem.

Question 33

The trade-off model shows the x-axis running from smooth or level production at the left to perfect chasing where production matches demand at the right.The total cost curve has a minimum point associated with some degree of chasing.

Question 34

The HMMS model requires three cost coefficients (C₃,C₄,and C₅) for the overtime payroll.

Question 35

A growing number of bank customers have demonstrated willingness to pay for the convenience of automated banking because an automated relationship permits access on a 24/7 basis.The ATM does not have to be scheduled for work by an AP analysis.

Question 36

Linear programming can be used to solve the transportation model applied to aggregate planning.

Question 37

HMMS is a pioneering aggregate-planning model that uses linear costs for its resource constraints.

Question 38

Iy. f on a sustained basis overtime,then existing overstocks can be reduced substantiall

Question 39

Seven reasonable LP constraints for each period of the aggregate plan are:
1.
2.
3.
4.
5.
6.
7.

Question 40

The HMMS procedure uses algebraic calculations and does not rely on calculus.

Question 41

Aggregate forecasts are always better than the set of component forecasts because the standard deviation of the total (T) of (n) components is equal to the _____ multiplied by the standard deviation of the individual components.

A)square root of St
B)square root of T
C)square root of Pt
D)square root of n

Question 42

If management is not in control of the situation,_____ occur because of neglect at all three levels of production planning.

A)gains
B)losses
C)both a and b
D)breakeven
E)none of the above

Question 43

_____ is achieved by collecting and lumping all items to be produced together.

A)Strategic planning
B)Detailed scheduling
C)Company planning
D)Aggregate planning

Question 44

Aggregate-planning methods can derive better solutions when P/OM can develop

A)ways to expand the number of different products that can be made by a specific set of resources.
B)ways to convert strategies into tactics.
C)ways to expand the number of resources that can make a class of products.
D)both a and c
E)both a and b

Question 45

Which variables are relevant production factors of aggregate planning?

A)demand aggregated over time
B)supply aggregated over time
C)overtime production
D)workforce level
E)all of the above

Question 46

Before trying to do detailed,tactical scheduling,_____ should be used to avoid costly mistakes arising from not being prepared with the proper resources at the right time.

A)company planning
B)production scheduling
C)aggregate planning
D)strategic planning
E)enterprise planning

Question 47

To justify the _____,the sum of costs associated with a constant workforce must be less than the sum of costs associated with a variable workforce.

A)chasing policy
B)constant production strategy
C)hybrid policy
D)combination strategy

Question 48

The supply chain is continuously value adding.It is in _____ with demand.

A)synchronization
B)separation mode
C)total correlation
D)production

Question 49

Backordered work is shown as

A)positive inventory.
B)negative inventory.
C)cumulative inventory.
D)rework.

Question 50

What business product lines have customers with ordering behaviors called fill or kill?

A)video and music tapes
B)lipstick and cosmetics
C)caviar and champagne
D)none of the above
E)all of the above

Question 51

Which level of production planning requires a forecast?

A)first level (aggregate planning)
B)second level (loading)
C)third level (sequencing)
D)fourth level (LP planning)

Question 52

For the slightly chasing policy model (C₁) backorders cost $100 per occurrence,costs for carrying inventory are $25 per unit,hires cost $200 per instance,and reductions cost $300 per event - all occurring within the time period.Then,total variable cost TVC (C₁) is

A)$12,800
B)$5,800
C)$22,800
D)$12,925

Question 53

The specific purpose of _____ is to schedule production for the job shop.

A)aggregate planning
B)detailed schedules
C)strategic business plans
D)planning horizons
E)disaggregate planning

Question 54

_____ is (are) generated by a variety of customers for the different kinds of products made by the job shop or the different kinds of services offered by job shops.

A)Supply
B)Aggregate plans
C)Demand
D)Production plans
E)Information

Question 55

The quality of sequencing decisions is always a consequence of using 1._____,and 2._____,however sequencing skills and knowledge are based on experience with customers' wants and process requirements.

A)AP methods;loading decisions
B)loading decisions;sequencing data
C)loading decisions;AP methods
D)forecasts;AP methods

Question 56

Because many job shops provide services and not goods,it pays to emphasize the fact that AP is useful to _____ kinds of job shops.

A)most
B)both
C)specific
D)many

Question 57

The_____ is the producer's general plan for getting work done.

A)company plan
B)aggregate plan
C)detailed schedule
D)strategic plan

Question 58

An aggregate production scheduling plan slightly chases demand when _____.

A)
B)
C)
D)

Question 59

For the example in the text,total production capacity consists of the output of what machine(s)?

A)M1
B)M2
C)M3
D)M4
E)all of the above

Question 60

How many distinct levels are found in the production planning process?

A)2
B)3
C)4
D)5

Question 61

The specific purpose of AP is to decide

A)when to schedule work.
B)under what conditions to schedule work.
C)what to forecast for demand.
D)both a and b

Question 62

LP variables that can be controlled for optimal aggregate planning include:

A)
B)Aₜ
C)
D)Iₜ
E)all of the above

Question 63

A linear cost equation is:

A)
B)
C)
D)

Question 64

Because many job shops provide services and not goods,it pays to emphasize the fact that:

A)AP is useful to all kinds of job shops.
B)AP is only useful to service providers.
C)AP is only useful to goods providers.
D)AP is not useful to all brands of jobs shops.

Question 65

Aggregate planning is achieved by _____ all items to be produced together.

A)collecting
B)lumping
C)both a and b
D)averaging

Question 66

Material flows inside the company can be scheduled in detail for specific items,or in

A)random allocation.
B)categories of specific items.
C)both a and b
D)neither a nor b

Question 67

HMMS also offers a _____ for comparison of models.

A)generic guide
B)demand function
C)benchmark
D)all of the above

Question 68

_____ is used to design a generalized production schedule.

A)WIP
B)JIT
C)Aggregate planning
D)none of the above

Question 69

If the planning period is for one quarter,then it starts at the beginning of _____ and it finishes at the end of _____.

A)t2;t4
B)t1;t4
C)t1;t3
D)t1;t2

Question 70

Workforce adjustment costs and _____ costs trade off between each other.

A)minimum total
B)inventory/backorder
C)lean production
D)smoothing demand

Question 71

St in the total cost equation stands for

A)stock-on-hand at the end of period t.
B)size of workforce at the end of period t.
C)demand in units for period t.
D)payroll costs during period t.

Question 72

For HMMS,the costs of _____ increase in a nonlinear fashion as the _____ increases.

A)overtime;production rate
B)regular payroll;workforce
C)overtime;cost of oil
D)inventory;cost of a backorder

Question 73

Aggregation methods for scheduling farming (harvesting) activities have useful _____ to service and manufacturing applications.The _____ can be accounted for at a later time.

A)similarities;differences
B)differences;similarities
C)transformation analogies;outputs
D)forecast similarities;product schedules

Question 74

The first version of the TM model in the text for aggregate planning _____ backorders.

A)did not allow
B)did allow
C)permitted
D)put a cost on

Question 75

With the HMMS model the inventory cost curve takes into account stock on-hand and backorders,but also _____ costs associated with changing production from one product to another.

A)overtime
B)hiring
C)firing
D)set-up

Question 76

The _____ level of production scheduling permits a comparison to be made of forecast versus actual demand.

A)first
B)second
C)third
D)fourth

Question 77

Aggregate planning starts a chain reaction in the supply chain,which is best described by

A)producers to customers to suppliers.
B)customers to producers to suppliers.
C)suppliers to producers to customers.
D)producers to suppliers to customers.

Question 78

The fundamental theorem of linear programming (LP) can best be described as

A)the theoretical foundation of a pioneering aggregate-planning model that uses nonlinear costs for its resource constraints.
B)a basic condition derived from the mathematical nature of the linear programming model that states there cannot be more active variables than real constraints.
C)a sensitivity threshold limiting the investigation of the effects of altering supply capacities and demand requirements for aggregate planning.
D)a search limitation on finding the minimum total cost along the scale that starts with smooth production and ends with perfect matching of supply and demand.

Question 79

Wireless transactions allow secure identification because the smart cards transmit a _____ amount of related information using seamless communications between buyers and sellers.

A)significant
B)moderate
C)small
D)minute

Question 80

HMMS is the four-letter abbreviation created to stand for

A)Holt.
B)Modigliani.
C)Math.
D)Simon.
E)all of the above except c,which should be Muth.