Question 1

Scenario 8.2 - Willow
A company faces the aggregate planning problem shown in the table below. Cost of regular production is $8 per unit, the cost of producing the same unit on overtime is $15, the cost of subcontracting is $12 per unit, and the cost of carrying a unit in inventory from one month to the next is $6.
 $\begin{array}{|l|c|c|c|c|c|}
\hline & \text { January } & \text { February } & \text { March } & \text { April } & \text { May } \
\hline \text { Forecast } & 400 & 800 & 1200 & 700 & 300 \
\hline \text { Beginning Inventory } & 100 & & & & \
\hline \text { Regular Time } & & & & & \
\hline \text { Qvertime } & & & & & \
\hline \text { Subcontracting } & & & & & \
\hline \text { Ending Inventory } & & & & & \
\hline
\end{array}$ 
The labor contract at the plant prohibits both overtime and subcontracting output to exceed 400 units in any five month window. The plant capacity is 20 units per day produced using two shifts and the plant runs seven days a week. By policy, management wants to avoid stockouts.
-How many units are produced using overtime in the optimal aggregate plan developed to address Scenario 8.2?

Accepted Answer

A)  360 
B)  200 
C)  400 
D)  280

Question 2

How frequently should the aggregate plan be rerun?

Accepted Answer

A)  Weekly 
B)  Monthly 
C)  Every 3 to 8 months 
D)  As inputs to the aggregate plan change

Question 3

As capacity utilization increases, it becomes less important to perform aggregate planning.

Accepted Answer

A) True 
 B)False

Question 4

Aggregate planning, to be effective, requires inputs from

Accepted Answer

A)  all customers. 
B)  all departments. 
C)  all suppliers. 
D)  throughout the supply chain.

Question 5

Linear programming finds the solution that creates the highest profit while satisfying the constraints that a company faces.

Accepted Answer

A) True 
 B)False

Question 6

The aggregate planning problem is concerned with determining the production level, inventory level, and capacity level (internal and outsourced) for each period that maximizes the firm's profit over the planning horizon.

Accepted Answer

A) True 
 B)False

Question 7

The operational parameter concerned with the number of workers/units of capacity needed for production is

Accepted Answer

A)  production rate. 
B)  workforce. 
C)  overtime. 
D)  backlog.

Question 8

The process by which a company determines levels of capacity, production, subcontracting, inventory, stockouts, and even pricing over a specified time horizon is

Accepted Answer

A)  aggregate planning. 
B)  detail planning. 
C)  inventory planning. 
D)  sales planning.

Question 9

Discuss the primary objective and operational parameters of aggregate planning.

Accepted Answer

The answer of Discuss the primary objective and operational parameters...

Question 10

The goal of aggregate planning is to satisfy demand in a way that minimizes profit.

Accepted Answer

A) True 
 B)False

Question 11

Forecasting errors are dealt with in aggregate plans using either safety backlog or safety capacity.

Accepted Answer

A) True 
 B)False

Question 12

Scenario 8.1-Gang Aft Agley
Gang Aft Agley, a manufacturing company, faces the aggregate planning problem shown in the table below. Cost of regular production is $5 per unit, the cost of producing the same unit on overtime is $7.50, the cost of subcontracting is $9 per unit, and the cost of carrying a unit in inventory from one month to the next is $2.
 $\begin{array}{|l|c|c|c|c|c|}
\hline & \text { January } & \text { February } & \text { March } & \text { April } & \text { May } \
\hline \text { Forecast } & 500 & 750 & 1200 & 650 & 300 \
\hline \text { Beginning Inventory } & 100 & & & & \
\hline \text { Regular Time } & & & & & \
\hline \text { Overtime } & & & & & \
\hline \text { Subcontracting } & & & & & \
\hline \text { Ending Inventory } & & & & & \
\hline
\end{array}$ 
The labor contract at the plant prohibits both overtime and subcontracting output to exceed 300 units in any five month window. The plant capacity is 600 units per month produced using two shifts, regardless of the number of days in a month. By policy, management wants to avoid stockouts.
-Use the information from Scenario 8.1 to determine the number of constraints in this scenario.

Accepted Answer

A)  12 
B)  15 
C)  20 
D)  24

Question 13

________ is used to determine customer service levels.

Accepted Answer

A)  Inventory held 
B)  Backlog/stockout quantity 
C)  Workforce hired/laid off 
D)  Machine capacity increase/decrease

Question 14

A poor aggregate plan may result in a large amount of excess inventory and capacity, thereby raising costs.

Accepted Answer

A) True 
 B)False

Question 15

The strategy where workforce (capacity) is kept stable but the number of hours worked is varied over time in an effort to synchronize production with demand is the

Accepted Answer

A)  flexibility strategy. 
B)  chase strategy. 
C)  level strategy. 
D)  mixed strategy.

Question 16

The quality of the forecast can be improved by using information from

Accepted Answer

A)  the focal firm. 
B)  downstream partners. 
C)  upstream partners. 
D)  competing supply chains.

Question 17

Which of these software vendors offer advanced planning systems?

Accepted Answer

A)  SAP 
B)  Solver 
C)  Excel 
D)  Google

Question 18

Aggregate planning is a process by which a company determines levels of capacity, production, subcontracting, inventory, stockouts, and even pricing over a specified time horizon.

Accepted Answer

A) True 
 B)False

Question 19

What is the name of the plan that breaks apart the aggregate plan into distinct product families?

Accepted Answer

A)  Master production schedule 
B)  Rough cut capacity plan 
C)  SKU aggregate plan 
D)  Process plan

Question 20

Advanced planning systems for aggregate planning rely heavily on ________ to deliver their full potential.

Accepted Answer

A)  forecasting 
B)  the supply chain 
C)  constraints 
D)  data accuracy

Exam 8: Aggregate Planning in a Supply Chain

How frequently should the aggregate plan be rerun?

As capacity utilization increases, it becomes less important to perform aggregate planning.

Aggregate planning, to be effective, requires inputs from

Linear programming finds the solution that creates the highest profit while satisfying the constraints that a company faces.

The aggregate planning problem is concerned with determining the production level, inventory level, and capacity level (internal and outsourced) for each period that maximizes the firm's profit over the planning horizon.

The operational parameter concerned with the number of workers/units of capacity needed for production is

The process by which a company determines levels of capacity, production, subcontracting, inventory, stockouts, and even pricing over a specified time horizon is

Discuss the primary objective and operational parameters of aggregate planning.

The goal of aggregate planning is to satisfy demand in a way that minimizes profit.

Forecasting errors are dealt with in aggregate plans using either safety backlog or safety capacity.

________ is used to determine customer service levels.

A poor aggregate plan may result in a large amount of excess inventory and capacity, thereby raising costs.

The strategy where workforce (capacity) is kept stable but the number of hours worked is varied over time in an effort to synchronize production with demand is the

The quality of the forecast can be improved by using information from

Which of these software vendors offer advanced planning systems?

Aggregate planning is a process by which a company determines levels of capacity, production, subcontracting, inventory, stockouts, and even pricing over a specified time horizon.

What is the name of the plan that breaks apart the aggregate plan into distinct product families?

Advanced planning systems for aggregate planning rely heavily on ________ to deliver their full potential.