Question 1

Disaggregation
A) breaks the aggregate plan into greater detail
B) transforms the master production schedule into an aggregate plan
C) calculates the optimal price points for yield management
D) converts product schedules and labor assignments to a facility-wide plan
E) is an assumption required for the use of the transportation model in aggregate planning

Accepted Answer

Disaggregation refers to breaking down the aggregate plan into more detailed plans for production, sales, and inventory. This process involves converting the aggregate plan into specific product schedules, labor assignments, and resource requirements for each period of the planning horizon. By doing so, managers can identify potential capacity constraints and adjust the plan accordingly to meet customer demand while minimizing costs. Therefore, option A is the correct answer.

Question 2

Aggregate planning would entail which of the following production aspects at BMW for a 12 month period?
A) number of cars with a hi-fi stereo system to produce
B) number of two-door vs. four-door cars to produce
C) number of green cars to produce
D) total number of cars to produce
E) B, C, and D

Accepted Answer

Aggregate planning focuses on the overall production levels and resources needed to meet demand. The total number of cars to produce would be a key aspect of aggregate planning at BMW for a 12 month period. The options A, B, and C are more specific production decisions rather than overall planning considerations.

Question 3

Which of the following statements about aggregate planning is false?
A) Hiring, layoffs, overtime, and subcontracting are methods of manipulating capacity.
B) Aggregate planning produces a plan detailing which products are made and in what quantities.
C) Yield management is a way of manipulating product or service demand.
D) Aggregate planning uses the adjustable part of capacity to meet production requirements.
E) The transportation method is an optimizing technique for aggregate planning.

Accepted Answer

Aggregate planning does not detail which products are made and in what quantities, but rather it focuses on the overall level of production in terms of aggregate units. Although specific products may be mentioned in the plan, they are not the main focus.

Question 4

Which of the following would most likely fall under the scope of only an operations manager?
A) research and development
B) new product plans
C) capital investments
D) facility location and expansion
E) setting inventory levels

Accepted Answer

Setting inventory levels would fall under the scope of an operations manager as it relates to the day-to-day management of the supply chain and ensuring efficient operations. Research and development and new product plans typically fall under the scope of a product manager or innovation department, while capital investments and facility location and expansion may involve input from multiple departments such as finance, real estate, and operations.

Question 5

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

Accepted Answer

Frito-Lay's specialized processes have high fixed costs associated with them (such as the cost of specialized equipment and facilities), but relatively low variable costs (such as the cost of raw materials). Therefore, to match capacity with demand, Frito-Lay uses aggregate planning. This allows the company to balance production capacity with expected demand levels while minimizing inventory costs and maintaining a high level of product quality.  Overall, low variable costs and high fixed costs make aggregate planning the most efficient strategy for Frito-Lay in terms of capacity management.

Question 6

Planning tasks associated with loading, sequencing, expediting, and dispatching typically fall under
A) short-range plans
B) intermediate-range plans
C) long-range plans
D) mission-related planning
E) strategic planning

Accepted Answer

Loading, sequencing, expediting, and dispatching are all operational tasks that require immediate attention and cannot be planned too far in advance. Therefore, they fall under the category of short-range plans.

Question 7

Which of the following inputs helps an aggregate planner select the rate of output for a facility over the next 3 to 18 months?
A) facility capacity
B) inventory on hand
C) workforce size
D) demand forecasts
E) all of the above

Accepted Answer

All the options listed (facility capacity, inventory on hand, workforce size, and demand forecasts) are critical inputs for an aggregate planner to determine the appropriate rate of output for a facility over the medium term (3 to 18 months). These factors collectively help in balancing demand with production capacity, managing inventory levels, and optimizing workforce utilization to meet demand forecasts efficiently.

Question 8

Which of the following is the term used for medium range capacity planning with a time horizon of three to eighteen months?
A) material requirements planning
B) short-range planning
C) strategic planning
D) aggregate planning
E) none of the above

Accepted Answer

Aggregate planning is the term used for medium range capacity planning with a time horizon of three to eighteen months. Material requirements planning is a detailed planning system that focuses on the component and raw material level. Short-range planning involves scheduling activities on a day-to-day basis. Strategic planning has a longer time horizon and focuses on overall organizational goals and objectives.

Question 9

Aggregate planning for fast food restaurants is very similar to aggregate planning in manufacturing, but with much smaller units of time.

Accepted Answer

Aggregate planning in fast food restaurants and manufacturing both involve forecasting demand, determining production levels, and managing inventory. However, fast food restaurants typically work on a much shorter time scale, often only a week or two, compared to the months or quarters that manufacturing companies use.

Question 10

The transportation method of linear programming is an optimizing approach to aggregate planning.

Accepted Answer

The transportation method is indeed an optimizing approach to aggregate planning in linear programming.

Question 11

The planning tasks associated with staffing, production, inventory, and sub-contracting levels typically fall under
A) short-range plans
B) intermediate-range plans
C) long-range plans
D) demand options
E) strategic planning

Accepted Answer

The tasks associated with staffing, production, inventory, and sub-contracting levels require intermediate-range planning as they involve decisions that cover a period of a few months to a year. These plans are created to achieve the goals and objectives set under the long-range planning process. Short-range plans generally cover a period of a few days to a few weeks, while long-range plans cover periods of more than a year. Strategic planning involves identifying long-term goals and objectives of an organization and developing a plan of action to achieve them. Demand options are related to forecasting and predicting the demand for products or services.

Question 12

The management coefficients model is a formal planning model built around a manager's experience and performance.

Accepted Answer

The description correctly defines the management coefficients model.

Question 13

Which of the following statements about aggregate planning is true?
A) Advertising/promotion is a way of manipulating product or service supply.
B) Work station loading and job assignments are examples of aggregate planning.
C) Overtime/idle time is a way of manipulating product or service demand.
D) Aggregate planning uses the adjustable part of capacity to meet production requirements.
E) All of the above are true.

Accepted Answer

Aggregate planning involves using the adjustable part of capacity, such as workforce and inventory levels, to meet production requirements. Advertising/promotion and overtime/idle time may impact demand or supply, but they are not direct examples of aggregate planning. Work station loading and job assignments are part of detailed scheduling, which is separate from aggregate planning.

Question 14

The objective of aggregate planning is to meet demand while __________ over the planning period.
A) minimizing cost
B) maximizing service level
C) minimizing stock out
D) minimizing fixed cost
E) all of the above

Accepted Answer

The objective of aggregate planning is to find the optimal production plan that will meet the anticipated demand while minimizing cost over the planning horizon. Although maximizing service level and minimizing stock out are also important considerations in aggregate planning, they are secondary objectives to cost minimization. Minimizing fixed cost could be a consideration, but it is usually not the primary objective of aggregate planning. Therefore, (A) minimizing cost is the best choice.

Question 15

A hotel room that goes unrented and an airline seat that goes unsold are both examples of perishable inventory in services.

Accepted Answer

Perishable inventory in services refers to inventory that cannot be stored or saved for future use, and therefore must be sold or used immediately. Both hotel rooms and airline seats are examples of perishable inventory as they cannot be stored and sold at a later time, and are lost forever if not sold or used within a specific time frame.

Question 16

Controlling the cost of labor in services involves quick response to consumer demand, on-call labor for unexpected demand, flexibility of labor for reallocation, and flexibility of hours or rate of output of individual workers.

Accepted Answer

Quick response to consumer demand, on-call labor, flexibility of labor for reallocation, and flexibility of hours or rate of output of individual workers are effective strategies to control labor costs in services.

Question 17

Aggregate planning is capacity planning for
A) the long range
B) the intermediate range
C) the short range
D) typically one to three months
E) typically three or more years

Accepted Answer

Aggregate planning is capacity planning for the intermediate range, which typically covers 3 to 18 months. It involves determining the overall production levels and workforce requirements in order to meet anticipated demand over this time horizonte.

Question 18

Which of the following is not one of the four things needed for aggregate planning?
A) a logical overall unit for measuring sales and output
B) a method for determining costs, such as hiring, layoffs, and inventory costs, associated with production schedules
C) a mathematical model that will minimize costs over the intermediate planning period
D) an aggregate demand forecast for an intermediate planning period
E) All of these are needed for aggregate planning.

Accepted Answer

The four things needed for aggregate planning are a logical overall unit for measuring sales and output, a method for determining costs associated with production schedules, an aggregate demand forecast for an intermediate planning period, and a feasible plan that balances projected demand and resources. A mathematical model that will minimize costs over the intermediate planning period is not one of the four things needed, although it may be a helpful tool in the planning process.

Question 19

The typical time horizon for aggregate planning is
A) less than a month
B) up to 3 months
C) 3 to 18 months
D) over one year
E) over 5 years

Accepted Answer

The typical time horizon for aggregate planning is 3 to 18 months. This time frame allows for medium to long-term planning of production, staffing, inventory, and other resources, while still providing flexibility to adjust plans as needed based on changes in demand or other factors.

Question 20

Top executives tend to focus their attention on which type of forecasts?
A) short-range
B) medium-range
C) long-range
D) weather
E) the forecast for the next day's absentee levels

Accepted Answer

Top executives are responsible for setting the long-term strategic vision of a company, and therefore are more likely to focus on long-range forecasts to inform their decision-making processes. Short and medium-range forecasts are more often used at lower levels of the organization to inform operational planning and day-to-day decision-making. Weather and absentee forecasts are generally not within the purview of top executives.

Quiz 13: Aggregate Planning

Disaggregation

Aggregate planning would entail which of the following production aspects at BMW for a 12 month period?

Which of the following statements about aggregate planning is false?

Which of the following would most likely fall under the scope of only an operations manager?

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

Planning tasks associated with loading, sequencing, expediting, and dispatching typically fall under

Which of the following inputs helps an aggregate planner select the rate of output for a facility over the next 3 to 18 months?

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

Aggregate planning for fast food restaurants is very similar to aggregate planning in manufacturing, but with much smaller units of time.

The transportation method of linear programming is an optimizing approach to aggregate planning.

The planning tasks associated with staffing, production, inventory, and sub-contracting levels typically fall under

The management coefficients model is a formal planning model built around a manager's experience and performance.

Which of the following statements about aggregate planning is true?

The objective of aggregate planning is to meet demand while __________ over the planning period.

A hotel room that goes unrented and an airline seat that goes unsold are both examples of perishable inventory in services.

Controlling the cost of labor in services involves quick response to consumer demand, on-call labor for unexpected demand, flexibility of labor for reallocation, and flexibility of hours or rate of output of individual workers.

Aggregate planning is capacity planning for

Which of the following is not one of the four things needed for aggregate planning?

The typical time horizon for aggregate planning is

Top executives tend to focus their attention on which type of forecasts?