Deck 8: Aggregate Planning in a Supply Chain
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Deck 8: Aggregate Planning in a Supply Chain
1
Safety inventory is defined as inventory held to satisfy demand that is higher than forecasted.
FALSE
2
Safety capacity is defined as capacity used to satisfy demand that is lower than forecasted.
FALSE
3
A planning horizon is usually between three and five years.
FALSE
4
Traditionally, much of aggregate planning is focused within an enterprise and may not always be seen as a part of supply chain management.
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5
The goal of aggregate planning is to build a plan that satisfies demand while minimizing downtime.
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6
A poor aggregate plan may result in a large amount of excess inventory and capacity, thereby raising costs.
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7
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.
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8
The goal of aggregate planning is to satisfy demand in a way that minimizes profit.
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9
Forecasting errors are dealt with in aggregate plans using either safety backlog or safety capacity.
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10
As capacity utilization increases, it becomes less important to perform aggregate planning.
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11
As inputs into the aggregate plan change, managers do not need to make changes to the aggregate plan.
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12
To improve the quality of aggregate plans, forecast errors must be taken into account when formulating aggregate plans.
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13
Short-term production serves as a broad blueprint for operations and establishes the parameters within which aggregate planning decisions are made.
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14
Linear programming finds the solution that creates the highest profit while satisfying the constraints that a company faces.
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15
Most strategies that an aggregate planner actually uses are in combination, and are referred to as hybrid strategies.
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16
The aggregate planner must make a trade-off between capacity, inventory, and backlog costs.
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17
To create an aggregate plan, a company must specify the planning horizon for the plan and the duration of each period within the planning horizon.
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18
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.
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19
Given that forecasts are always wrong to some degree, the aggregate plan needs to have some flexibility built into it if it is to be useful.
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20
Companies should work with downstream partners to produce forecasts and with upstream partners to determine constraints when doing aggregate planning.
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21
The fundamental trade-offs available to an aggregate planner are between
A) capability, inventory, and backlog costs.
B) capability, inventory, and sales costs.
C) capacity, inventory, and backlog costs.
D) capacity, inventory, and sales costs.
A) capability, inventory, and backlog costs.
B) capability, inventory, and sales costs.
C) capacity, inventory, and backlog costs.
D) capacity, inventory, and sales costs.
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22
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
A) flexibility strategy.
B) chase strategy.
C) level strategy.
D) mixed strategy.
A) flexibility strategy.
B) chase strategy.
C) level strategy.
D) mixed strategy.
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23
Aggregate planning solves problems involving
A) aggregate decisions and stock keeping unit (SKU) level decisions.
B) aggregate decisions or stock keeping unit (SKU) level decisions.
C) aggregate decisions rather than stock keeping unit (SKU) level decisions.
D) stock keeping unit (SKU) level decisions rather than aggregate decisions.
A) aggregate decisions and stock keeping unit (SKU) level decisions.
B) aggregate decisions or stock keeping unit (SKU) level decisions.
C) aggregate decisions rather than stock keeping unit (SKU) level decisions.
D) stock keeping unit (SKU) level decisions rather than aggregate decisions.
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24
The strategy where the production rate is synchronized with the demand rate by varying machine capacity or hiring and laying off employees as the demand rate varies is the
A) adjustable strategy.
B) chase strategy.
C) level strategy.
D) mixed strategy.
A) adjustable strategy.
B) chase strategy.
C) level strategy.
D) mixed strategy.
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25
The operational parameter concerned with the number of workers/units of capacity needed for production is
A) production rate.
B) workforce.
C) overtime.
D) backlog.
A) production rate.
B) workforce.
C) overtime.
D) backlog.
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26
The goal of aggregate planning is to
A) dissatisfy customers in a way that maximizes profit.
B) dissatisfy customers in a way that minimizes profit.
C) satisfy demand in a way that maximizes profit.
D) satisfy demand in a way that minimizes profit.
A) dissatisfy customers in a way that maximizes profit.
B) dissatisfy customers in a way that minimizes profit.
C) satisfy demand in a way that maximizes profit.
D) satisfy demand in a way that minimizes profit.
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27
The planning horizon is
A) the time period over which the aggregate plan is to produce a solution.
B) the duration of each time period in the aggregate plan.
C) the length of time required to produce the aggregate plan.
D) the solution to the aggregate plan.
A) the time period over which the aggregate plan is to produce a solution.
B) the duration of each time period in the aggregate plan.
C) the length of time required to produce the aggregate plan.
D) the solution to the aggregate plan.
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28
An aggregate planner requires information on constraints. Which of the following is one of the typical constraints for an aggregate planner?
A) Inventory holding cost
B) Labor/machine hours required per unit
C) Stockout or backlog cost
D) Limits on overtime
A) Inventory holding cost
B) Labor/machine hours required per unit
C) Stockout or backlog cost
D) Limits on overtime
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29
The strategy where a stable machine capacity and workforce are maintained with a constant output rate, with inventory levels fluctuating over time, is the
A) adjustable strategy.
B) chase strategy.
C) level strategy.
D) mixed strategy.
A) adjustable strategy.
B) chase strategy.
C) level strategy.
D) mixed strategy.
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30
________ is used to determine customer service levels.
A) Inventory held
B) Backlog/stockout quantity
C) Workforce hired/laid off
D) Machine capacity increase/decrease
A) Inventory held
B) Backlog/stockout quantity
C) Workforce hired/laid off
D) Machine capacity increase/decrease
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31
A poor aggregate plan can result in
A) appropriate inventory levels.
B) efficient use of capacity.
C) better sales and lost profits.
D) lost sales and lost profits.
A) appropriate inventory levels.
B) efficient use of capacity.
C) better sales and lost profits.
D) lost sales and lost profits.
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32
The operational parameter concerned with the number of units completed per unit time (such as per week or per month) is
A) production rate.
B) workforce.
C) overtime.
D) backlog.
A) production rate.
B) workforce.
C) overtime.
D) backlog.
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33
Demand is forecast for the next five months as 200, 300, 500, 300, 200. The production planner decides to adopt a level strategy, so over the next five months they should produce
A) 200, 300, 500, 300, 200.
B) 500, 400, 300, 200, 100.
C) 100, 200, 300, 400, 500.
D) 300, 300, 300, 300, 300.
A) 200, 300, 500, 300, 200.
B) 500, 400, 300, 200, 100.
C) 100, 200, 300, 400, 500.
D) 300, 300, 300, 300, 300.
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34
The process by which a company determines levels of capacity, production, subcontracting, inventory, stockouts, and even pricing over a specified time horizon is
A) aggregate planning.
B) detail planning.
C) inventory planning.
D) sales planning.
A) aggregate planning.
B) detail planning.
C) inventory planning.
D) sales planning.
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35
The operational parameter concerned with the planned inventory carried over the various periods in the planning horizon is
A) production rate.
B) overtime.
C) backlog.
D) inventory on hand.
A) production rate.
B) overtime.
C) backlog.
D) inventory on hand.
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36
Aggregate planning, to be effective, requires inputs from
A) all customers.
B) all departments.
C) all suppliers.
D) throughout the supply chain.
A) all customers.
B) all departments.
C) all suppliers.
D) throughout the supply chain.
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37
Aggregate planning is concerned with determining
A) the production level, sales level, and capacity for each period.
B) the demand level, inventory level, and capacity for each period.
C) the production level, inventory level, and capacity for each period.
D) the production level, staffing level, and capacity for each period.
A) the production level, sales level, and capacity for each period.
B) the demand level, inventory level, and capacity for each period.
C) the production level, inventory level, and capacity for each period.
D) the production level, staffing level, and capacity for each period.
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38
Aggregate planning should consider information from
A) only the enterprise as its breadth of scope.
B) downstream partners to produce forecasts.
C) upstream partners to determine constraints.
D) all of the above
A) only the enterprise as its breadth of scope.
B) downstream partners to produce forecasts.
C) upstream partners to determine constraints.
D) all of the above
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39
Much of aggregate planning has traditionally been focused
A) on short-term production scheduling.
B) on customer relationship management.
C) within an enterprise.
D) beyond enterprise boundaries.
A) on short-term production scheduling.
B) on customer relationship management.
C) within an enterprise.
D) beyond enterprise boundaries.
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40
The length of the planning horizon is usually between
A) one and three months.
B) three and eighteen months.
C) one and three years.
D) three and five years.
A) one and three months.
B) three and eighteen months.
C) one and three years.
D) three and five years.
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41
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.
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.
-What is the optimal total cost of the aggregate plan developed to address Scenario 8.2?
A) $27,200
B) $20,960
C) $31,400
D) $26,600
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.
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.
-What is the optimal total cost of the aggregate plan developed to address Scenario 8.2?
A) $27,200
B) $20,960
C) $31,400
D) $26,600
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42
Forecasting errors are dealt with using
A) safety backlog.
B) safety capacity.
C) safety inventory.
D) B and C only
A) safety backlog.
B) safety capacity.
C) safety inventory.
D) B and C only
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43
Inventory held to satisfy demand that is higher than forecasted is
A) safety backlog.
B) safety capacity.
C) safety inventory.
D) safety sales.
A) safety backlog.
B) safety capacity.
C) safety inventory.
D) safety sales.
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44
Most strategies that an aggregate planner actually uses are in combination and are referred to as the
A) adjustable strategy.
B) chase strategy.
C) level strategy.
D) mixed strategy.
A) adjustable strategy.
B) chase strategy.
C) level strategy.
D) mixed strategy.
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45
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.
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 months does the regular time output exceed plant capacity in the optimal solution to Scenario 8.2?
A) 0
B) 1
C) 2
D) 3
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.
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 months does the regular time output exceed plant capacity in the optimal solution to Scenario 8.2?
A) 0
B) 1
C) 2
D) 3
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46
What is the name of the plan that breaks apart the aggregate plan into distinct product families?
A) Master production schedule
B) Rough cut capacity plan
C) SKU aggregate plan
D) Process plan
A) Master production schedule
B) Rough cut capacity plan
C) SKU aggregate plan
D) Process plan
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47
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.
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 objective function for this scenario.
A)
B) Max Profit Revenue Regular Overtime Subcontracting Ending Inventory
C)
D)
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.
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 objective function for this scenario.
A)
B) Max Profit Revenue Regular Overtime Subcontracting Ending Inventory
C)
D)
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48
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.
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.
A) 12
B) 15
C) 20
D) 24
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.
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.
A) 12
B) 15
C) 20
D) 24
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49
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.
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.
-What is the optimal total cost of the aggregate plan developed to address Scenario 8.1?
A) $16,700
B) $18,950
C) $18,450
D) $16,250
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.
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.
-What is the optimal total cost of the aggregate plan developed to address Scenario 8.1?
A) $16,700
B) $18,950
C) $18,450
D) $16,250
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50
When formulating aggregate plans,
A) forecast errors have no impact.
B) forecast errors must be taken into account.
C) forecast accuracy is assumed.
D) forecast accuracy is not a factor.
A) forecast errors have no impact.
B) forecast errors must be taken into account.
C) forecast accuracy is assumed.
D) forecast accuracy is not a factor.
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51
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.
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?
A) 360
B) 200
C) 400
D) 280
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.
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?
A) 360
B) 200
C) 400
D) 280
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52
Capacity used to satisfy demand that is higher than forecasted is
A) safety backlog.
B) safety capacity.
C) safety inventory.
D) safety sales.
A) safety backlog.
B) safety capacity.
C) safety inventory.
D) safety sales.
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53
A highly effective tool for a company to use when it tries to maximize profits while being subjected to a series of constraints is
A) aggregate programming.
B) distribution programming.
C) production programming.
D) linear programming.
A) aggregate programming.
B) distribution programming.
C) production programming.
D) linear programming.
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54
Demand is forecast for the next five months as 200, 300, 500, 300, 200. The production planner decides to adopt a chase strategy, so over the next five months they should produce
A) 200, 300, 500, 300, 200.
B) 500, 400, 300, 200, 100.
C) 100, 200, 300, 400, 500.
D) 300, 300, 300, 300, 300.
A) 200, 300, 500, 300, 200.
B) 500, 400, 300, 200, 100.
C) 100, 200, 300, 400, 500.
D) 300, 300, 300, 300, 300.
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55
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.
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.
-Without actually solving the aggregate planning problem, it is safe to conclude that in the optimal solution to Scenario 8.2.
A) the total ending inventory will exceed the number of units made using overtime.
B) the number of units made using subcontracting will exceed the number of units made using overtime.
C) the number of units made using regular time will exceed the forecast.
D) the number of units made using subcontracting will exceed the number of units made using regular time.
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.
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.
-Without actually solving the aggregate planning problem, it is safe to conclude that in the optimal solution to Scenario 8.2.
A) the total ending inventory will exceed the number of units made using overtime.
B) the number of units made using subcontracting will exceed the number of units made using overtime.
C) the number of units made using regular time will exceed the forecast.
D) the number of units made using subcontracting will exceed the number of units made using regular time.
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56
Which of the following is an approach a company can use to create a buffer for forecast error using safety inventory?
A) Overtime
B) Carry extra workforce permanently
C) Build and carry extra inventories
D) Subcontracting
A) Overtime
B) Carry extra workforce permanently
C) Build and carry extra inventories
D) Subcontracting
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57
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.
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?
A) 360
B) 200
C) 400
D) 280
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.
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?
A) 360
B) 200
C) 400
D) 280
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58
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.
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 decision variables in this scenario.
A) 10
B) 15
C) 20
D) 24
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.
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 decision variables in this scenario.
A) 10
B) 15
C) 20
D) 24
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59
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.
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.
-Which of these is a constraint that is appropriate for Scenario 8.1?
A)
B)
C)
D)
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.
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.
-Which of these is a constraint that is appropriate for Scenario 8.1?
A)
B)
C)
D)
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60
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.
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.
-Which of these statements about Scenario 8.1 is evident without even developing an aggregate plan?
A) Some overtime will be needed.
B) Ending inventory must be negative.
C) Overtime must exceed subcontracting.
D) Subcontracting must exceed regular time output.
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.
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.
-Which of these statements about Scenario 8.1 is evident without even developing an aggregate plan?
A) Some overtime will be needed.
B) Ending inventory must be negative.
C) Overtime must exceed subcontracting.
D) Subcontracting must exceed regular time output.
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61
How frequently should the aggregate plan be rerun?
A) Weekly
B) Monthly
C) Every 3 to 8 months
D) As inputs to the aggregate plan change
A) Weekly
B) Monthly
C) Every 3 to 8 months
D) As inputs to the aggregate plan change
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62
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.
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.
Formulate the aggregate plan using linear programming.
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.

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.
Formulate the aggregate plan using linear programming.
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63
What information does a master production schedule provide that an aggregate plan does not?
A) Expense information for the planning period
B) Revenue information for the planning period
C) Specific product family production information
D) A specific machine schedule for each order
A) Expense information for the planning period
B) Revenue information for the planning period
C) Specific product family production information
D) A specific machine schedule for each order
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64
Discuss key issues to be considered when implementing aggregate planning.
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65
The aggregate plan needs to
A) be a final product because changes are disruptive to the supply chain.
B) be considered fixed because forecasts are usually accurate.
C) have some flexibility built into it because forecasts are always wrong.
D) have some flexibility built into it because forecasts are usually right.
A) be a final product because changes are disruptive to the supply chain.
B) be considered fixed because forecasts are usually accurate.
C) have some flexibility built into it because forecasts are always wrong.
D) have some flexibility built into it because forecasts are usually right.
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66
As capacity utilization increases,
A) it becomes less important to perform aggregate planning.
B) it becomes more important to perform aggregate planning.
C) it does not affect the importance of performing aggregate planning.
D) it lessens the importance of aggregate planning.
A) it becomes less important to perform aggregate planning.
B) it becomes more important to perform aggregate planning.
C) it does not affect the importance of performing aggregate planning.
D) it lessens the importance of aggregate planning.
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67
Explain the basic strategies that an aggregate planner has available to balance the various costs and meet demand.
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68
Advanced planning systems for aggregate planning rely heavily on ________ to deliver their full potential.
A) forecasting
B) the supply chain
C) constraints
D) data accuracy
A) forecasting
B) the supply chain
C) constraints
D) data accuracy
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69
The earliest IT supply chain products were
A) aggregate planning modules.
B) cloud-based.
C) SaaS (software as a service).
D) enterprise resource planning modules.
A) aggregate planning modules.
B) cloud-based.
C) SaaS (software as a service).
D) enterprise resource planning modules.
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70
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.
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.
Formulate the aggregate plan using linear programming and solve it using Solver.
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.

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.
Formulate the aggregate plan using linear programming and solve it using Solver.
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71
Discuss the primary objective and operational parameters of aggregate planning.
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72
The quality of the aggregate plan can be improved by using information from
A) only the local firm.
B) only downstream partners.
C) only upstream partners.
D) all parts of the supply chain.
A) only the local firm.
B) only downstream partners.
C) only upstream partners.
D) all parts of the supply chain.
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73
The aggregate plan should be communicated to
A) only the local firm.
B) only downstream partners.
C) only upstream partners.
D) all supply chain partners who will be affected by it.
A) only the local firm.
B) only downstream partners.
C) only upstream partners.
D) all supply chain partners who will be affected by it.
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74
Which of these software vendors offer advanced planning systems?
A) SAP
B) Solver
C) Excel
D) Google
A) SAP
B) Solver
C) Excel
D) Google
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75
Discuss the information required for aggregate planning.
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76
The quality of the forecast can be improved by using information from
A) the focal firm.
B) downstream partners.
C) upstream partners.
D) competing supply chains.
A) the focal firm.
B) downstream partners.
C) upstream partners.
D) competing supply chains.
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