Deck 16: Aggregate Sales and Operations Planning

Question 1

The sales and operations planning process consists of a series of meetings.

Answer 1

True

Question 2

The widespread adoption of computing technology has led to the virtual abandonment of simple cut-and-try charting and graphical methods to develop aggregate operations plans.

Answer 2

False

Question 3

The aggregate operations plan is developed from the master production schedule (MPS)and the rough-cut capacity plan.

Answer 3

False

Question 4

The aggregate operations plan translates annual and quarterly business plans into broad labor and output plans for the intermediate term of 3 to 18 months.

Question 5

The aggregate operations plan differs in virtually every aspect in service operations as contrasted with manufacturing operations.

Question 6

A mathematical technique that is only used in aggregate planning for service operations is the transportation method of linear programming.

Question 7

Linear programming can be used to assist aggregate operations planning if the cost and variable relationships are linear and demand can be treated as certain or deterministic.

Question 8

The sales and marketing plans are typically developed separately from the aggregate operations plan as a way of cross-checking results to insure the integrity of assumptions about the future.

Question 9

Fixed and variable costs incurred in producing a given product type in a given time period are relevant aggregate operations planning costs.

Question 10

The sales and operations planning process is made up of a variety of analytical techniques which interact to produce short and intermediate term goals.

Question 11

Accurate medium-range planning increases the likelihood of operating within the limits of a budget.

Question 12

The International Aggregate Planning Society (IAPS)has developed aggregate operations planning guidelines which are followed by a majority of manufacturing firms.

Question 13

The increasing complexity of modern operations management has made simple cut-and-try charting and graphical methods formerly used to develop aggregate operations plans impractical and obsolete.

Question 14

A common strategy for firms producing seasonally cyclical products is to develop and produce complimentary products with the opposite seasonality.

Question 15

The main purpose of the aggregate production plan is to specify the optimal combination of production rate,workforce Level and inventory on hand.

Question 16

The objective of the aggregate operations plan is to minimize the cost of resources required to meet demand over the intermediate term of 3 to 18 months.

Question 17

Aggregate sales and operations planning occurs in a company about every 3 to 18 months.

Question 18

Aggregation in sales and operations planning is by groups of customers on the supply side and by product families on the demand side of the firm's supply chain.

Question 19

The objective of the aggregate operations plan is to insure that the marketing and sales plans are realistic.

Question 20

Yield management is the process of allocating the right type of capacity to the right type of customer at the right prices at the right time to maximize revenue or yield.

Question 21

In an overview of the major operations planning activities in a typical organization,which of the following activities precedes aggregate sales and operations planning?

A)Process planning
B)Workforce scheduling
C)Master production scheduling
D)Materials requirements planning
E)Order scheduling

Question 22

Which of the following methodologies is used to verify that production and warehouse facilities,equipment and labor are available when needed?

A)Rough-cut capacity planning
B)Materials requirement planning
C)Capacity requirements planning
D)Order scheduling
E)Process planning

Question 23

The aggregate operations planning variable "inventory on hand" refers to the balance of unused inventory carried over from the previous time period.

Question 24

Capacity planning is the step in the aggregate operations planning process that immediately follows development of the master production schedule.

Question 25

The master production schedule is a crucial input into the aggregate operations plan.

Question 26

Because a Level production strategy does not require adjustment in the short-to-medium term,aggregate sales and operations planning is not required.

Question 27

In an overview of the major operations planning activities in a typical organization,which of the following activities immediately follows aggregate sales and operations planning in a manufacturing operation?

A)Process planning
B)Strategic capacity planning
C)Master scheduling
D)Materials requirements planning
E)Order scheduling

Question 28

The aggregate operations planning variable "workforce Level" refers to the number of workers needed to accomplish the planned production.

Question 29

In conducting aggregate operations planning there are a number of required inputs.Which of the following are inputs considered external to the firm?

A)Competitors' behavior and economic conditions
B)Market demand and inventory Levels
C)Subcontractor capacity and current workforce
D)Economic conditions and current physical capacity
E)Raw material availability and inventory Levels

Question 30

In conducting aggregate operations planning there are a number of required inputs.Which of the following are inputs considered external to the firm?

A)Inventory Levels and market demand
B)Raw material availability and competitor's behavior
C)Current workforce and economic conditions
D)Current physical capacity and market demand
E)Subcontractor capacity and inventory Levels

Question 31

The essence of yield management is the ability to manage supply.

Question 32

Which of the following methodologies takes the end product requirements from the master production schedule and breaks them down into their component parts and subassemblies to create a materials plan?

A)Rough-cut capacity planning
B)Materials requirement planning
C)Capacity requirements planning
D)Order scheduling
E)Inventory planning

Question 33

The aggregate operations planning variable "production rate" refers to the number of units completed per unit of time.

Question 34

The main purpose of aggregate operations planning is to specify the optimal combination of which of the following?

A)Production rates,workforce Levels and inventory on hand
B)Inventory on hand and financing costs for that inventory
C)The strategic plan and the products available for sale
D)The workforce Level and the degree of automation
E)Operational costs and the cash flow to support operations

Question 35

In services,once the aggregate staffing Level is determined,the focus is on short-term workforce and customer scheduling.

Question 36

Workforce Level refers to the rated pay scale of the production workers.

Question 37

In conducting aggregate operations planning there are a number of required inputs.Which of the following are considered inputs internal to the firm?

A)Inventory Levels and economic conditions
B)Market demand and subcontractor capacity
C)Current physical capacity and current workforce
D)Competitor behavior and current workforce
E)Current physical capacity and raw material availability

Question 38

Which of the following is a production planning strategy presented in the textbook?

A)Level
B)Strategic
C)Balanced
D)Synchronous
E)Optimal

Question 39

A "rate fence" is a person who purchases a service at list price and later sells the service at a premium to another person.This practice is often illegal or restricted as in "scalping" of tickets to a sporting event.

Question 40

Yield management is an effective tool that can be used to shape demand patterns.

Question 41

An advantage of the Level strategy for aggregate operations planning is which of the following?

A)Total costs through the entire system are minimized
B)There is a smooth flow throughout the production system
C)There is variety for the workers through the mixing of models produced
D)The risk of backorders is minimized
E)Customer service is improved

Question 42

Which of the following aggregate operations planning methods tests alternative plans through trial and error,results in a non-optimal solution and is simple to develop and use?

A)Linear decision rules
B)Linear programming
C)Graphing and charting
D)Simulation
E)Transportation method

Question 43

What are the four costs relevant to the aggregate operations plan?

Question 44

Which of the following aggregate operations planning methods can handle any number of variables,gives an optimal solution,but is difficult to formulate?

A)Linear decision rules
B)Linear programming
C)Graphing and charting
D)Simulation
E)Cut and try

Question 45

From an operational perspective yield management is most effective under which of the following circumstances?

A)Demand cannot be segmented by customer
B)Inventory is perishable
C)Fixed costs are low and variable costs are high
D)The customer is a "captive" of the system
E)The firm doing yield management is very profitable

Question 46

Matching the production rate to the order rate by hiring and laying off employees as the order rate varies is which of the following pure production planning strategies?

A)Stable workforce,variable work hours
B)Chase
C)Level
D)Meeting demand
E)Minimizing inventory

Question 47

Using the cut-and-try method for aggregate operations planning we can determine the production requirement in units of product.If the beginning inventory is 500 units,the demand forecast is 1,000 and the necessary safety stock is 10% of the demand forecast,which of the following is the production requirement?

A)1,000
B)600
C)550
D)450
E)100

Question 48

Using the cut-and-try method for aggregate operations planning we can determine the production requirement in units of product.If the beginning inventory is 400 units,the demand forecast is 900 units and the required safety stock is 10% of the demand forecast,what is the production requirement?

Question 49

An advantage of the Level strategy for aggregate operations planning is which of the following?

A)Purchased items from vendors can be delivered when and where needed
B)High Level of scheduling allows for workers to have lots of overtime
C)System can better accommodate unexpected large orders
D)Financial requirements are minimized through lower finished goods inventory
E)It is easier to apply linear programming or simulation

Question 50

Which of the following costs are relevant to aggregate operations planning?

A)Sunk costs
B)Transaction costs
C)Backordering costs
D)Legal costs
E)Fixed costs

Question 51

Maintaining a stable workforce working at a constant output rate while shortages and surpluses are absorbed by fluctuating inventory Levels,order backlogs and allowing lost sales is which of the following production planning strategies?

A)Stable workforce,variable work hours
B)Chase
C)Level
D)Full employment
E)Skill maintenance

Question 52

What are the five conditions named in the text that support yield management from an operational perspective?

Question 53

The transportation method of linear programming can incorporate which of the following factors when used in aggregate operations planning?

A)Learning curve effects
B)The probability of quality failures
C)Subcontracting
D)Manufacturing scale economies
E)Demand uncertainties

Question 54

Which of the following aggregate planning methods uses mathematically derived coefficients to specify production rates and workforce Levels in a series of equations?

A)Linear decision rules
B)Linear programming
C)Graphing and charting
D)Simulation of aggregate plan
E)Cut and try

Question 55

Using the cut-and-try method for aggregate operations planning we can determine the production requirement in units of product.If beginning inventory is 4,000 units,the demand forecast is 2,900 units and the required safety stock is 10% of the demand forecast,what is the production requirement?

Question 56

Which of the following aggregate operations planning methods uses pattern search procedures to find minimum points on the total cost curves?

A)Linear decision rules
B)Linear programming
C)Graphing and charting
D)Simulation of aggregate plan
E)None of the above

Question 57

The transportation method of linear programming can incorporate which of the following factors when used in aggregate operations planning?

A)Multiproduct production
B)Balanced scorecard criteria
C)Minimize cost and maximize workforce utilization
D)Variable demand responses to marketing campaigns
E)Cash flow constraints

Question 58

Which of the following is considered a "pure" production planning strategy?

A)Variable workforce,stable work hours
B)Lag demand
C)Level playing field
D)Stable workforce,variable work hours
E)Product warehouse

Question 59

From an operational perspective yield management is least effective under which of the following circumstances?

A)Demand can be segmented by customer
B)The product can be sold in advance
C)Demand is highly variable
D)Fixed costs are high and variable costs are low
E)Demand is stable and close to capacity

Question 60

Using the cut-and-try method for aggregate operations planning we can determine the production requirement in units of product.If the beginning inventory is 100 units,the demand forecast is 1,200 and the necessary safety stock is 20% of the demand forecast,which of the following is the production requirement?

A)1,200
B)1,300
C)1,340
D)1,500
E)1,540

Question 61

What are the three basic production planning strategies?

Question 62

Describe the aggregate sales and operations planning process?

Question 63

What are four advantages of Level production that make it the backbone of JIT production?

Question 64

Explain how yield management works and why some companies are able to use it to manage demand patterns?