Deck 11: Operations Planning and Scheduling

Question 1

Complementary products are actions that attempt to modify demand and,consequently,resource requirements.

Answer 1

False

Question 2

A backorder is an order that the customer expected to be filled immediately but reluctantly asks that it be delivered as soon as possible.

Answer 2

True

Question 3

Undertime is the situation that occurs when employees do not work productively for the regular-time workday or workweek.

Answer 3

True

Question 4

A staffing plan is a manufacturing firm's aggregate plan.

Question 5

One input from operation plan is to account for current machine capacities.

Question 6

Scheduling is the allocation of resources over time to accomplish specific tasks.

Question 7

The planning horizon for aggregate plans is always one year.

Question 8

Yield management is the practice of adjusting prices to maximize the revenue obtained from available capacity that is lost if it is not used.

Question 9

A level strategy matches demand during the planning horizon by varying either the workforce level or the output rate.

Question 10

One input of distribution and marketing plan is supplier capabilities.

Question 11

A job shop is a firm that specializes in medium- to large-volume production and utilizes line or continuous processes.

Question 12

Stockout refers to the accumulation of customer orders that have been promised for delivery at some future date.

Question 13

The aggregate plan is a statement of a company's production rate,workforce levels,and inventory holdings based on estimates of customer requirements and capacity limitations.

Question 14

A business plan is a schedule that specifies the timing and size of production quantities for each product in the product families.

Question 15

One type of cost considered when preparing an aggregate plan is inventory holding cost.

Question 16

The Gantt chart can be used as a tool for sequencing work on machines and monitoring its progress.

Question 17

Operations schedules are short-term plans designed to implement the master production schedule.

Question 18

One distinction between manufacturing and services that affects scheduling is that services have difficulty creating inventories to buffer against demand uncertainties.

Question 19

The aggregate plan is a another term for sales and operations plan.

Question 20

One type of cost considered when preparing an aggregate plan is overtime cost.

Question 21

An airliner that leaves the airport with empty seats is an example of the perishable capacity.

Question 22

New product development plans generally fall within the scope of aggregate planning.

Question 23

One distinction between manufacturing and services that affects scheduling is that service operations demand often is less predictable.

Question 24

Aggregate planning strategies are broadly divided into demand options and capacity options.

Question 25

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

Question 26

The amount of overtime and the number of employees in the workforce are both adjustable elements of capacity when implementing aggregate planning.

Question 27

Aggregate planning mixed strategies utilize inventory,workforce,and production rate changes over the planning timeframe.

Question 28

Using part-time workers as an aggregate planning option may be less costly than using full-time workers,but this may result in reduced quality levels.

Question 29

Due to the large number of possible strategies,finding an ideal mix strategy for an aggregate plan is complicated.

Question 30

Varying the workforce by hiring or firing is one of the demand options of aggregate planning.

Question 31

A rotating schedule calls for each employee to work the same days and hours each week.

Question 32

Due to the fact that service firms do not inventory output,a pure chase strategy is not appropriate.

Question 33

In order to create uses for excess capacity within a company,demand influencing aggregate planning options can be implemented.

Question 34

Product or service supply in aggregate planning can be manipulated by advertising and promotion.

Question 35

On call employees for unexpected demand in aggregate planning for the service sector is one method of controlling the costs of labour.

Question 36

The only objective of aggregate planning is to minimize the cost of matching capacity to demand over planning period.

Question 37

One of the adjustable elements of aggregate planning,as regards to capacity,is the percentage of subcontracting.

Question 38

The minimization of the cost of matching capacity to demand over the planning,is the only object of aggregate planning.

Question 39

The process of breaking an aggregate plan into greater detail is referred to as disaggregation.

Question 40

The process of aggregate planning usually includes the collating and shipping of individual products.

Question 41

Subcontracting is never on an alternative,when implementing aggregate planning.

Question 42

Labour regular time costs are the wages paid to employees.

Question 43

Which one of the following statements about managerial inputs to production and staffing plans is best?

A) Accounting and finance provide forecasts of demand and competition behaviour.
B) Operations provide training capacity.
C) Materials provide supplier capabilities.
D) Human resources provide plans for future equipment capacities.

Question 44

Which one of the following statements about managerial inputs to production and staffing plans is best?

A) Finance provides labor and machine standards.
B) Human resources provide the training capacity and labor-market conditions.
C) Marketing provides new product or service developments.
D) Materials provide the current staffing level.

Question 45

Which one of the following is NOT a typical objective of production and staffing plans?

A) minimize costs
B) maximize customer service
C) minimize equipment utilization
D) minimize changes in workforce levels

Question 46

The meaning of undertime is

A) employees work as usual, but they are paid at a lower rate.
B) employees don't work productively for the number of hours that they normally do.
C) employees work more than normal hours, but they are not compensated.
D) the workweek of some employees is permanently reduced.

Question 47

Which one of the following statements concerning production and staffing plans is best?

A) Aggregation can be performed along three dimensions: product families, labor, and time.
B) A staffing plan is the intermediate link between the business plan and the master production schedule.
C) Production plans are based primarily on information from the master production plan.
D) A master production schedule is a projected statement of income, costs, and profits.

Question 48

Which one of the following statements about managerial inputs to production and staffing plans is best?

A) Distribution and marketing provides labor-market conditions.
B) Engineering provides product designs.
C) Operations provide storage capacity.
D) Human resources provide labor standards.

Question 49

In sales and operation planning,the use of a constant workforce level will result in no overtime.

Question 50

A plant facing seasonal demand can stock anticipation inventory during light demand periods and use it during heavy demand periods.

Question 51

In sales and operation plan the scheduling of vacation is often a critical factor in production stability.

Question 52

Constraints represent physical limitations or managerial policies associated with the aggregate plan.

Question 53

One way a company can efficiently use capacity is to produce or offer complementary products and services.

Question 54

Employees working a full day,but having a light workload and thus not being as productive as normal,is an example of paid undertime.

Question 55

The second step in the planning process is to determine the demand requirements for each period of the planning horizon.

Question 56

When a company maintains a constant output rate,no hirings or firing will take place.

Question 57

Which one of the following statements concerning production and staffing plans is best?

A) Production and staffing plans specify production rates, workforce levels, and inventory holdings, but do not account for capacity limitations because they are aggregated.
B) Production and staffing plans attempt to achieve several objectives, all of which must be consistent with one another.
C) When production and staffing plans are made, aggregation can be performed only along two dimensions: products and time.
D) The impact of production and staffing plans cuts across several functional areas of the firm.

Question 58

Which one of the following statements about aggregate planning is best?

A) A production plan generally focuses on production rates and inventory holdings, whereas a staffing plan focuses on staffing and other labor-related factors.
B) Capacity alternatives are actions that adjust demand patterns.
C) Operations and marketing are the only two functional areas that supply inputs for developing production and staffing plans.
D) A level strategy stabilizes inventory levels by adjusting production rates or staff levels to match demand levels over the planning horizon.

Question 59

In the manufacturing sector,aggregate planning links strategic goals to a production plant.

Question 60

Backorders and stock up costs are never considered in aggregate planning.

Question 61

Which one of the following statements is best?

A) Demand alternatives adjust demand patterns, whereas capacity alternatives change in response to changes in demand.
B) Overtime and undertime are two ways to change the workforce level (rather than its utilization).
C) Subcontracting during the peak season is called a demand strategy since it requires a competitive orientation toward suppliers.
D) Due to the almost limitless number of possible aggregate plans, it is virtually impossible to select a desirable plan without using an optimization procedure such as linear programming.

Question 62

A company is attempting to cope with seasonal demand patterns using a demand alternative.Which one of the following will NOT help achieve this aim?

A) complementary products or services
B) adjusting workforce levels
C) promotional campaigns
D) creative pricing

Question 63

Which one of the following statements about aggregate planning is best?

A) When a firm wants to minimize its inventory investment, it should use a level production planning strategy.
B) When a firm wants to emphasize stability in its workforce, it should adopt a level production planning strategy.
C) A make-to-stock production plan that wants to emphasize plant utilization should adopt a chase production strategy.
D) A make-to-stock production plan that wants to minimize changes in production rates should adopt a chase production planning strategy.

Question 64

Which one of the following conditions can make a level strategy the most attractive?

A) The cost of changing the workforce levels is low.
B) Products complementary to the existing products can be produced easily with the given facilities.
C) The shelf life of the goods being produced is limited.
D) Inventory holding costs are high.

Question 65

Which of the following statements is not consistent with the typical objectives of developing aggregate plants?

A) Improving on-time delivery to maximize customer service.
B) Minimize changes in production rates to avoid potential difficulties in coordinating with suppliers.
C) Strive for low utilization of expensive production assets to maintain a large capacity cushion
D) Minimize the accumulation of inventory.

Question 66

Which one of the following statements about costs of aggregate plans is best?

A) Overtime wages are typically 50 percent of regular time, exclusive of fringe benefits.
B) The cost of capital is not generally included in the inventory holding cost.
C) Fringe benefits, which are a part of regular-time costs, do not typically include health insurance and paid vacations.
D) Hiring costs include the costs of advertising jobs, interviews, training programs for new employees, and initial paperwork.

Question 67

Two basic types of decision alternatives are used to arrive at acceptable production or staffing plans: capacity alternatives and demand alternatives.If an organization that faces seasonal demand uses a reactive approach,which one of the following actions is it most likely to implement?

A) introduction of complementary products
B) creating a stock of anticipation inventory
C) advertising to generate demand during off-peak periods
D) discounting products in off-peak periods

Question 68

A TV repair service company has a seasonal demand for its service,and there is a general shortage of skilled TV repair persons.Which one of the following is a capacity production planning alternative suitable for this situation?

A) Hire and lay off workers to match the demand requirements.
B) Increase the backlog for short-term demand surges.
C) Offer reduced prices during the slack season.
D) Build anticipation inventories.

Question 69

Which of the following is the best example of a physical constraint on the aggregate plan?

A) inventory storage space
B) level of backorders
C) use of overtime
D) safety stock levels

Question 70

Which one of the following statements about aggregate planning is best?

A) Capacity alternatives are actions that adjust demand patterns.
B) All functional areas should supply inputs for developing production and staffing plans.
C) The production plan specifies the timing and size of production quantities for each product in the product families.
D) The staffing plan is to service organizations what competitive priorities are to manufacturing organizations.

Question 71

Which one of the following statements concerning typical objectives of production and staffing plans is best?

A) Improved on-time delivery also means minimizing inventory investment.
B) Minimizing costs will also minimize changes in the workforce levels.
C) Maximizing profits also minimizes inventory investment.
D) Adjusting workforce levels may cause lower productivity because new employees typically need time to become fully productive.

Question 72

Which one of the following is a demand alternative for aggregate planning?

A) Use seasonal inventories to buffer the manufacturing process from variations in customer demand.
B) Offer complementary products or services with contra-cyclical demand requirements.
C) Use overtime and undertime to change workforce levels.
D) Use subcontracting to overcome short-term capacity shortages.

Question 73

The adjustment of price to maximize the revenue obtained from available capacity that will be lost if not used is referred to as

A) chase strategy.
B) yield management.
C) anticipation inventory.
D) workforce adjustment.

Question 74

The aggregate planning strategy to be used should be consistent with the environment.Which one of the following pairs of environment and strategy is consistent?

A) skilled labor in short supply; adjust workforce levels
B) low inventory holding cost; build anticipation inventory
C) ample labor supply; increase backlog for short-term demand surges
D) seasonal requirements and ample, unskilled labor supply; subcontracting

Question 75

Which one of the following capacity alternatives would typically be best to implement a chase strategy for a manufacturing firm?

A) Use creative pricing to modify demand.
B) Build anticipation inventory to absorb the variability in demand.
C) Increase overtime to satisfy peaks in demand.
D) Use promotional campaigns to boost demand.

Question 76

Which one of the following statements concerning aggregate planning alternatives is best?

A) Building anticipation inventory during the slack season is a demand alternative a firm can follow to satisfy seasonal demand patterns.
B) Adjusting workforce levels is an attractive capacity alternative when the cost of training and unemployment compensation is high.
C) Creating anticipation inventory has the advantage of increasing customization.
D) Using overtime is an undesirable option when the overtime wage premium is high and sustained levels of top worker productivity are important.

Question 77

Which one of the following actions applies to a level strategy?

A) Hire workers to increase production output to match increases in demand requirements.
B) Build anticipation inventory to meet the variability in demand.
C) Decrease production output to match any decreases in demand requirements.
D) Use promotional campaigns to boost demand.

Question 78

Which one of the following statements concerning capacity alternatives is best?

A) Subcontracting can help overcome short-term capacity shortages by offloading work on other producers.
B) Creating anticipation inventory increases customization, and is particularly favored in the service industry.
C) Adjusting workforce levels is preferred when the workforce is skilled and the labor pool is small.
D) Using overtime capacity usually improves worker productivity.

Question 79

The intermediate link between the business plan and manufacturing schedules is the

A) annual plan.
B) production (aggregate) plan.
C) financial plan.
D) workforce schedule.

Question 80

Which one of the following conditions favors a level strategy for manufacturing firms?

A) high availability of workers
B) short shelf life of inventory
C) highly automated equipment and a make-to-stock strategy
D) high inventory holding cost