Question 1

Which one of the following is not a basic option for altering demand?

Accepted Answer

A)  promotion 
B)  backordering 
C)  pricing 
D)  subcontracting 
E)  All are demand options. 
A)  promotion 
B)  backordering 
C)  pricing 
D)  subcontracting 
E)  All are demand options.

Question 2

Demand can be altered in aggregate planning by promotion and producing additional product using overtime.

Accepted Answer

A) True 
 B)False

Question 3

Inventory information for firm ABC: $$\begin{array} { l l } 
\text { Inventory at the end of April, 2008: } & 200 \text { units } \
\text { Expected demand during April, 2008: } & 50 \text { units } \
\text { Production expected during April, 2008: } & 100 \text { units }
\end{array}$$ What was the inventory at the end of March 2008?

Accepted Answer

A)  350 
B)  250 
C)  150 
D)  50 
E)  400 
A)  350 
B)  250 
C)  150 
D)  50 
E)  400

Question 4

When the opportunity cost of lost revenue is relatively high, _________ become(s) relatively more attractive.

Accepted Answer

A)  layoffs 
B)  back orders 
C)  excess capacity 
D)  disaggregation 
E)  minimal inventory 
A)  layoffs 
B)  back orders 
C)  excess capacity 
D)  disaggregation 
E)  minimal inventory

Question 5

Effectively using labor resources during periods of peak demand and low demand would be the goal of aggregate planners in:

Accepted Answer

A)  manufacturing. 
B)  military. 
C)  archeology. 
D)  libraries. 
E)  financial services. 
A)  manufacturing. 
B)  military. 
C)  archeology. 
D)  libraries. 
E)  financial services.

Question 6

Disaggregating an aggregate plan leads to a master schedule.

Accepted Answer

A) True 
 B)False

Question 7

The main disadvantage(s) of informal techniques used for aggregate planning is(are):

Accepted Answer

A)  they are expensive to do. 
B)  they may not result in the best plan. 
C)  they take a long time to do. 
D)  they require the use of a computer. 
E)  the lack of formal education of the planners. 
A)  they are expensive to do. 
B)  they may not result in the best plan. 
C)  they take a long time to do. 
D)  they require the use of a computer. 
E)  the lack of formal education of the planners.

Question 8

One option for altering the pattern of demand is:

Accepted Answer

A)  back orders. 
B)  overtime. 
C)  part-time workers. 
D)  inventories. 
E)  subcontracting. 
A)  back orders. 
B)  overtime. 
C)  part-time workers. 
D)  inventories. 
E)  subcontracting.

Question 9

One option for altering the availability of capacity is:

Accepted Answer

A)  use of overtime or slack time. 
B)  pricing. 
C)  promotion. 
D)  back orders. 
E)  rigidly fixing work schedules. 
A)  use of overtime or slack time. 
B)  pricing. 
C)  promotion. 
D)  back orders. 
E)  rigidly fixing work schedules.

Question 10

Available-to-promise in the first week is equal to beginning inventory plus MPS quantity, if any, less committed customer orders before the next MPS quantity.

Accepted Answer

A) True 
 B)False

Question 11

A manager has prepared a forecast of expected aggregate demand for the next six months. Develop an aggregate plan to meet this demand given this additional information: A level production rate of 100 units per month will be used. Back orders are allowed, and they are charged at the rate of $8 per unit per month. Inventory holding costs are $1 per unit per month in ending inventory. Determine the cost of this plan if regular time cost is $20 per unit and beginning inventory is zero. $$\begin{array} { l l } 
\text { Month } & \text { Forecast } \
\hline 1 & 80 \
2 & 100 \
3 & 120 \
4 & 110 \
5 & 100 \
6 & 90
\end{array}$$

Accepted Answer

The aggregate plan should look like this

Question 12

A time fence in the master schedule is used to prevent unauthorized people from making changes to the schedule.

Accepted Answer

A) True 
 B)False

Question 13

A master production schedule quantity of 300 units will arrive in week 6. Weekly demand over weeks 3 through 10 is forecasted at 50 units. At present, orders have been booked in various quantities in weeks 1, 2, 3, and 4. What is available to promise for week 6?

Accepted Answer

A)  50 
B)  6 
C)  300 
D)  100 
E)  cannot be determined without projected on-hand information 
A)  50 
B)  6 
C)  300 
D)  100 
E)  cannot be determined without projected on-hand information

Question 14

Essentially, the output of aggregate planning is the:

Accepted Answer

A)  marketing plan. 
B)  production plan. 
C)  rough-cut capacity plan. 
D)  assignment plan. 
E)  material requirements plan. 
A)  marketing plan. 
B)  production plan. 
C)  rough-cut capacity plan. 
D)  assignment plan. 
E)  material requirements plan.

Question 15

Which of the following differs between aggregate planning in services and aggregate planning in manufacturing?

Accepted Answer

A)  uncertainty in demand 
B)  costs of storing inventory 
C)  the perishability of capacity 
D)  cost of overtime 
E)  cost of hiring 
A)  uncertainty in demand 
B)  costs of storing inventory 
C)  the perishability of capacity 
D)  cost of overtime 
E)  cost of hiring

Question 16

Consider the following information: $$\begin{array} { l l l } 
\text { Period } & \text { Forecast } \
\hline   1 & 200 & \
2 & 200 & \
3 & 300 & \
4 & 400 & \
5 & 500 & \
6 & 200 & \
\text { Regular Time: } & \$ 20 \text { per unit ( } 280 \text { units per period maximum) } \
\text { Overtime: } & \$ 30 \text { per unit (40 units per period maximum) } \
\text { Subcontracting: } & \text { None available } \
\text { Beginning Inventory: } & \text { None } \
\text { Carrying Cost: } & \$ 1 \text { per unit per period } \
\text { Backorder Cost: } & \$ 5 \text { per unit per period }
\end{array}$$ What are total costs for each period?

Accepted Answer

$5,680; $5

Question 17

Aggregate planning is used to establish general levels of employment, output, and inventories over an intermediate range of time.

Accepted Answer

A) True 
 B)False

Question 18

Aggregate planners commonly use trial-and-error methods in developing aggregate plans.

Accepted Answer

A) True 
 B)False

Question 19

Aggregate planning requires which of the following information?
(I) a forecast of expected demand
(II) current levels of inventory
(III) policies regarding employment levels

Accepted Answer

A)  II only 
B)  I and II only 
C)  I and III only 
D)  I, II, and III 
E)  II and III only 
A)  II only 
B)  I and II only 
C)  I and III only 
D)  I, II, and III 
E)  II and III only

Question 20

Aggregate planning is capacity planning that typically covers a time horizon of one to three months.

Accepted Answer

A) True 
 B)False

Exam 11: Aggregate Planning and Master Scheduling

Which one of the following is not a basic option for altering demand?

Demand can be altered in aggregate planning by promotion and producing additional product using overtime.

Inventory information for firm ABC: Inventory at the end of April, 2008: 200 units Expected demand during April, 2008: 50 units Production expected during April, 2008: 100 units What was the inventory at the end of March 2008?

When the opportunity cost of lost revenue is relatively high, _________ become(s) relatively more attractive.

Effectively using labor resources during periods of peak demand and low demand would be the goal of aggregate planners in:

Disaggregating an aggregate plan leads to a master schedule.

The main disadvantage(s) of informal techniques used for aggregate planning is(are):

One option for altering the pattern of demand is:

One option for altering the availability of capacity is:

Available-to-promise in the first week is equal to beginning inventory plus MPS quantity, if any, less committed customer orders before the next MPS quantity.

A time fence in the master schedule is used to prevent unauthorized people from making changes to the schedule.

A master production schedule quantity of 300 units will arrive in week 6. Weekly demand over weeks 3 through 10 is forecasted at 50 units. At present, orders have been booked in various quantities in weeks 1, 2, 3, and 4. What is available to promise for week 6?

Essentially, the output of aggregate planning is the:

Which of the following differs between aggregate planning in services and aggregate planning in manufacturing?

Aggregate planning is used to establish general levels of employment, output, and inventories over an intermediate range of time.

Aggregate planners commonly use trial-and-error methods in developing aggregate plans.

Aggregate planning requires which of the following information? (I) a forecast of expected demand (II) current levels of inventory (III) policies regarding employment levels

Aggregate planning is capacity planning that typically covers a time horizon of one to three months.

Introduction to Operations Management

Competitiveness, Strategy, and Productivity

Forecasting

Product and Service Design

Extension: Reliability

Strategic Capacity Planning for Products and Services

Extension: Decision Theory

Process Selection and Facility Layout

Work Design and Measurement

Extension: Learning Curves

Location Planning and Analysis

Extension: The Transportation Model

Management of Quality

Quality Control

Extension: Acceptance Sampling

MRP and ERP

Inventory Management

Jit and Lean Operations

Extension: Maintenance

Supply Chain Management

Scheduling

Project Management

Management of Waiting Lines

Linear Programming

Filters