Question 1

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 refers to the fact that the service cannot be stored for future use or sale, so any unfilled capacity (such as an unrented hotel room or unsold airline seat) is essentially lost revenue.

Question 2

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

While a mathematical model can be helpful for optimizing aggregate planning, it is not an absolute requirement. The four things needed for aggregate planning are a logical unit of measurement for sales and output, a method for determining costs, an aggregate demand forecast, and a plan that balances supply and demand while considering constraints and minimizing costs.

Question 3

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 involves determining the overall production levels for a specified time period. The total number of cars to produce would be the most relevant aspect of production for BMW's aggregate planning process. The other options (A, B, and C) relate more to specific product features or design choices rather than overall production levels.

Question 4

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 relatively high fixed costs, such as the cost of equipment and facilities, but relatively low variable costs, such as ingredients and packaging materials. Therefore, aggregate planning is necessary to ensure that capacity matches demand and that the company efficiently utilizes its fixed costs.

Question 5

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 uses the adjustable part of capacity to meet production requirements. Advertising/promotion is a way of manipulating product or service demand, work station loading and job assignments are examples of detailed planning, and overtime/idle time is a way of adjusting capacity but not demand. Therefore, option D is the only true statement regarding aggregate planning.

Question 6

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

These planning tasks are related to the medium-term goals and objectives of the company, which fall under the category of intermediate-range plans. Short-range plans involve day-to-day operations, while long-range plans focus on long-term goals and objectives. Demand options are strategies to manage changes in demand, while strategic planning involves setting the overall direction and goals for the company.

Question 7

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

Controlling the cost of labor in services does involve the mentioned factors like quick response, on-call labor, flexibility of labor, and hours or rate of output of workers.

Question 8

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

Accepted Answer

The transportation method, also known as the transportation algorithm, is a linear programming approach that is commonly used for aggregate planning. It involves finding the optimal transportation schedule of products from multiple sources to multiple destinations while minimizing transportation costs.

Question 9

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 deal with the day-to-day running of a business. Therefore, these planning tasks fall under short-range plans.

Question 10

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 11

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

Accepted Answer

The statement is correct. Aggregate planning in fast food restaurants involves allocating resources and determining the production or service levels for shorter time periods, such as days or weeks, while manufacturing typically plans for months or quarters.

Question 12

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 focused on capacity planning for the intermediate range, typically spanning from three to 18 months. The goal of aggregate planning is to determine the optimal production or workforce capacity to meet anticipated demand, while minimizing costs and maximizing efficiency.

Question 13

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 is the process of breaking down the aggregate plan into more detailed plans. It involves converting the aggregate plan into specific product levels, labor schedules, and production schedules. Disaggregation helps to ensure that the firm's production and inventory plans are aligned with actual demand and capacity constraints.

Question 14

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 process of determining the overall production level of an organization for the medium term (usually 3 to 18 months) based on the forecasted demand and available resources. It involves making decisions on production rates, workforce levels, inventory levels, and subcontracting. Therefore, D is the correct answer. Material requirements planning is more focused on the short term, while strategic planning is concerned with the long term. Short-range planning is usually associated with the day-to-day operations.

Question 15

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 answer of The objective of aggregate planning is to...

Question 16

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

Accepted Answer

The management coefficient model is a planning and decision-making tool that is based on a manager's experience, judgment and knowledge. It involves assigning numerical values to different variables and using them to analyze and evaluate different scenarios to make better decisions. Therefore, the statement is true.

Question 17

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 means that the planning is done for a medium-term period, usually spanning a few months to a year and a half. Short-term plans cover periods of less than a month, while long-term plans cover periods of over a year or five years. Therefore, option C is the best choice.

Question 18

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 produce a plan for production, but it does not necessarily specify which products to make and in what quantities. It focuses on overall capacity planning and utilization to meet demand while balancing costs and efficiency.

Question 19

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 strategic planning and decision-making that affects the long-term success of an organization. Therefore, they tend to focus their attention on long-range forecasts to guide their decisions for the future of the company. Short-range and medium-range forecasts are typically used by operational managers to make day-to-day decisions. Weather and absentee forecasts are useful for operational planning but are unlikely to be a top priority for top executives.

Question 20

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 is a task that falls within the realm of operations management, as it involves managing the flow of goods and resources within a company's supply chain. Research and development, new product plans, capital investments, and facility location and expansion are all important aspects of business management, but they extend beyond the operations manager's sphere of responsibility.

Quiz 16: Aggregate Planning

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

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

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

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

Which of the following statements about aggregate planning is true?

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

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.

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

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?

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

Aggregate planning is capacity planning for

Disaggregation

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

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

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

The typical time horizon for aggregate planning is

Which of the following statements about aggregate planning is False?

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

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