Question 1

To use revenue management strategies,a business should have which combination of costs?

Accepted Answer

A) high variable and high fixed 
B) low variable and high fixed 
C) high variable and low fixed 
D) low variable and low fixed 
E) either A or B 
A) high variable and high fixed 
B) low variable and high fixed 
C) high variable and low fixed 
D) low variable and low fixed 
E) either A or B

Question 2

Fred's Fabrication has the following aggregate demand requirements and other data for the upcoming four quarters.
   Which of the following production plans is better: Plan A-chase demand by hiring and layoffs; Plan B-pure level strategy,or Plan C-700 level with the remainder by subcontracting?

Accepted Answer

Plan A has cost of $378,000,plan B has c

Question 3

What is a disadvantage common to the following two strategies: (1)varying inventory levels and (2)back ordering during periods of high demand?

Accepted Answer

Shortages or backord

Question 4

Frito-Lay uses aggregate planning to match capacity with demand because of the ________ associated with its specialized processes.

Accepted Answer

A) high variable cost and high fixed cost 
B) high variable cost and low fixed cost 
C) low variable cost and high fixed cost 
D) low variable cost and low fixed cost 
E) none of the above 
A) high variable cost and high fixed cost 
B) high variable cost and low fixed cost 
C) low variable cost and high fixed cost 
D) low variable cost and low fixed cost 
E) none of the above

Question 5

Disaggregation is the process of breaking the aggregate plan into greater detail; one example of this detail is the master production schedule.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following characteristics makes revenue management UNATTRACTIVE to organizations that have perishable inventory?

Accepted Answer

A) demand can be segmented 
B) service can be sold in advance of consumption 
C) capacity is easily changed 
D) variable costs are low and fixed costs are high 
E) demand fluctuates 
A) demand can be segmented 
B) service can be sold in advance of consumption 
C) capacity is easily changed 
D) variable costs are low and fixed costs are high 
E) demand fluctuates

Question 7

A firm practices a pure chase strategy.Production last quarter was 1000.Demand over the next four quarters is estimated to be 900,700,1000,and 1000.Hiring cost is $20 per unit,and layoff cost is $5 per unit.Over the next year,what will be the sum of hiring and layoff costs?

Accepted Answer

A) $500 
B) $2,500 
C) $7,500 
D) $7,000 
E) $12,500 
A) $500 
B) $2,500 
C) $7,500 
D) $7,000 
E) $12,500

Question 8

Which of the following aggregate planning options is NOT associated with manipulation of product or service demand?

Accepted Answer

A) price cuts or discounts 
B) promotion 
C) subcontracting 
D) counterseasonal products or services 
E) advertising 
A) price cuts or discounts 
B) promotion 
C) subcontracting 
D) counterseasonal products or services 
E) advertising

Question 9

In aggregate planning,which one of the following is not a basic option for altering demand?

Accepted Answer

A) promotion 
B) subcontracting 
C) back ordering 
D) pricing 
E) personal selling 
A) promotion 
B) subcontracting 
C) back ordering 
D) pricing 
E) personal selling

Question 10

Which of the following aggregate planning strategies is a capacity option?

Accepted Answer

A) influencing demand by changing price 
B) counterseasonal product mixing 
C) influencing demand by extending lead times 
D) changing inventory levels 
E) influencing demand by back ordering 
A) influencing demand by changing price 
B) counterseasonal product mixing 
C) influencing demand by extending lead times 
D) changing inventory levels 
E) influencing demand by back ordering

Question 11

Which of the following is the term used for intermediate-range capacity planning with a time horizon of three to eighteen months?

Accepted Answer

A) material requirements planning 
B) enterprise resource planning 
C) strategic planning 
D) aggregate planning 
E) job scheduling 
A) material requirements planning 
B) enterprise resource planning 
C) strategic planning 
D) aggregate planning 
E) job scheduling

Question 12

In level scheduling,what is kept uniform from month to month?

Accepted Answer

A) product mix 
B) inventory levels 
C) production/workforce levels 
D) demand levels 
E) sub-contracting levels 
A) product mix 
B) inventory levels 
C) production/workforce levels 
D) demand levels 
E) sub-contracting levels

Question 13

Which of the following is NOT one of the successful techniques for controlling the cost of labor in services?

Accepted Answer

A) accurate scheduling of labor-hours to assure quick response to customer demand 
B) an on-call labor resource that can be added or deleted to meet unexpected demand 
C) little flexibility in worker hours to decrease the burden on management 
D) flexibility of individual worker skills that permits reallocation of available labor 
E) flexibility in rate of output or hours of work to meet changing demand 
A) accurate scheduling of labor-hours to assure quick response to customer demand 
B) an on-call labor resource that can be added or deleted to meet unexpected demand 
C) little flexibility in worker hours to decrease the burden on management 
D) flexibility of individual worker skills that permits reallocation of available labor 
E) flexibility in rate of output or hours of work to meet changing demand

Question 14

The strategies of aggregate planning are broadly divided into demand options and capacity options.

Accepted Answer

A) True 
 B)False

Question 15

A small private university normally charges the same price -$200-per credit-hour for all courses and for all students.While the university is pretty near capacity in the fall and spring,it finds that its classrooms are only about 60 percent occupied during the summer session.A student of operations management wonders if revenue management might be useful to both the university and its students alike.This student,with help from some economics majors,estimates a demand curve for summer course enrollment.Points on this demand curve include 9000 credit-hours at the current rate of $200,12,000 credit hours at $180,15,000 credit-hours at $160,and 18,000 credit-hours at $140.Based on this demand curve,what price point would best serve the university,if its objective is the greatest revenue for the summer session?

Accepted Answer

The student must consider that since 900

Question 16

A manufacturer of industrial seafood processing equipment wants you to develop an aggregate plan for the four quarters of the upcoming year using the following data on demand and capacity.
   a.Find the optimal plan using the transportation method.
b.What is the cost of the plan?
c.Does any regular time capacity go unused? How much in what periods?
d.What capacity went unused in this solution? (List in detail.)

Accepted Answer

The optimal plan appears in the table be

Question 17

List,in order,the five steps of the graphical method of aggregate planning.Is it possible that these steps can be properly followed and the solution properly implemented without using a graph? Explain.

Accepted Answer

The steps are: 1.Determine the demand in

Question 18

Houma Containers,Inc.,makes industrial fiberglass tanks that are used on offshore oil platforms.Demand for the next four months and capacities of the plant are shown in the table below.Unit cost on regular time is $400.Overtime cost is 150% of regular time cost.Subcontracting is available in substantial quantity but at a very high cost,$1100 per unit.Holding costs are $200 per tank per month; back orders cost the firm $1000 per unit per month.Houma's management believes that the transportation algorithm can be used to optimize this scheduling problem.The firm has no beginning inventory and anticipates no ending inventory.
   Answer the following questions based on the data table and solution table shown below.   a.How many units will be produced on regular time in June?
b.How many units will be produced by subcontracting over the four-month period?
c.What will be the inventory at the end of April?
d.What will be total production from all sources in April?
e.What will be the total cost of the optimum solution?
f.Does the firm utilize the expensive options of subcontracting and back ordering? When; why?

Accepted Answer

(a)250; (b)350; (c)0,and 50 units are ba

Question 19

A professional services firm is investigating revenue management as a means of taking advantage of unused capacity.Analysts for this firm estimate a demand curve for the firm's service,which is sold by the hour.Points on this demand curve include 9000 hours at the current rate of $60 per hour,9500 hours at $55,10,000 hours at $50,and 10,500 hours at $45.Based on this demand curve,what price point would be best for the firm,if its objective is maximum revenue?

Accepted Answer

The yields of these price points are as

Question 20

Techniques for controlling the cost of labor in services include accurate scheduling of labor hours to assure quick response to customer demand,on-call labor for unexpected demand,flexibility of labor skills for reallocation of available labor,and flexibility in rate of output or hours of work to meet changing demand.

Accepted Answer

A) True 
 B)False

Exam 14: Aggregate Planning and Sop

To use revenue management strategies,a business should have which combination of costs?

Fred's Fabrication has the following aggregate demand requirements and other data for the upcoming four quarters. Which of the following production plans is better: Plan A-chase demand by hiring and layoffs; Plan B-pure level strategy,or Plan C-700 level with the remainder by subcontracting?

What is a disadvantage common to the following two strategies: (1)varying inventory levels and (2)back ordering during periods of high demand?

Frito-Lay uses aggregate planning to match capacity with demand because of the ________ associated with its specialized processes.

Disaggregation is the process of breaking the aggregate plan into greater detail; one example of this detail is the master production schedule.

Which of the following characteristics makes revenue management UNATTRACTIVE to organizations that have perishable inventory?

A firm practices a pure chase strategy.Production last quarter was 1000.Demand over the next four quarters is estimated to be 900,700,1000,and 1000.Hiring cost is $20 per unit,and layoff cost is $5 per unit.Over the next year,what will be the sum of hiring and layoff costs?

Which of the following aggregate planning options is NOT associated with manipulation of product or service demand?

In aggregate planning,which one of the following is not a basic option for altering demand?

Which of the following aggregate planning strategies is a capacity option?

Which of the following is the term used for intermediate-range capacity planning with a time horizon of three to eighteen months?

In level scheduling,what is kept uniform from month to month?

Which of the following is NOT one of the successful techniques for controlling the cost of labor in services?

The strategies of aggregate planning are broadly divided into demand options and capacity options.

List,in order,the five steps of the graphical method of aggregate planning.Is it possible that these steps can be properly followed and the solution properly implemented without using a graph? Explain.

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Project Management

Forecasting

Design of Goods and Services

Managing Quality

Process Strategy

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Location Strategies

Layout Strategies

Human Resources, job Design, and Work Measurement

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Inventory Management

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Short-Term Scheduling

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