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 labour 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 schedules, labor assignments, and facility-wide plans. By doing so, managers can determine the exact quantities and types of resources needed to meet demand, as well as identify potential capacity constraints and adjust plans accordingly. In other words, disaggregation helps to turn broad planning assumptions into more concrete, actionable steps. Therefore, option A (breaks the aggregate plan into greater detail) is the correct answer.

Question 2

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

Accepted Answer

Controlling the cost of labour in services does involve quick response to consumer demand, on-call labour for unexpected demand, flexibility of labour for reallocation, and flexibility of hours or rate of output of individual workers. These measures help to ensure that the right amount of labour is available to meet demand without incurring unnecessary costs.

Question 3

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 products or goods that have a limited shelf-life and cannot be stored for future use. In the case of services, hotel rooms and airline seats are perishable inventory because they have a limited time frame for sale (i.e. once the flight has departed or the night has passed, the room/seat can no longer be sold). Therefore, if they go unrented or unsold, the opportunity to generate revenue from them is lost forever.

Question 4

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

Accepted Answer

The transportation method is a commonly used optimizing approach in linear programming for aggregate planning. It involves determining the optimal transportation routes for goods or services to meet demand and minimize costs.

Question 5

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 a balance between the long-term perspective required for capacity planning and the short-term perspective needed for day-to-day scheduling.

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

Intermediate-range plans typically cover time horizons of three months to two years and involve planning for staffing, production, inventory, and sub-contracting levels. Short-range plans cover time horizons of up to three months and focus on day-to-day operations, while long-range plans cover time horizons of more than two years and involve strategic planning for the organization's future. Demand options refer to the different ways organizations can respond to changes in demand, while strategic planning is a higher-level process that involves setting overall goals and objectives for the organization.

Question 7

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 tend to focus their attention on long-range forecasts as they are concerned with the overall success and direction of the company in the future. Short and medium-range forecasts may be more relevant for day-to-day operations, but long-range forecasts are more important for strategic planning and decision making. Weather and absentee level forecasts are typically not within the purview of top executives.

Question 8

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

While maximizing service level and minimizing stock out are important considerations, the primary objective of aggregate planning is cost minimization. This involves finding the optimal production and workforce levels that meet demand while keeping costs as low as possible over the planning period. Minimizing fixed costs may be a component of this, but it is not the sole objective. Therefore, the best choice for the objective of aggregate planning is option A) minimizing cost.

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

Fast food restaurants also use the concepts of forecasting, adjusting capacity to meet demand, and balancing inventory levels with production. However, their time units are usually days or weeks, compared to months or quarters in manufacturing.

Question 10

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)average variable cost and medium fixed cost

Accepted Answer

Frito-Lay's specialized processes have high fixed costs, such as expensive equipment and facilities, but low variable costs per unit. Therefore, the company should use aggregate planning to align capacity with demand and avoid underutilizing its fixed costs. Choice A is incorrect because Frito-Lay has low variable costs. Choice B is incorrect because Frito-Lay has high variable costs. Choice D and E are incorrect because they do not correctly describe Frito-Lay's cost structure.

Question 11

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 12

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)a model that combines forecasts and costs

Accepted Answer

The four things needed for aggregate planning are:
1) A logical overall unit for measuring sales and output
2) A method for determining costs, such as hiring, layoffs, and inventory costs, associated with production schedules
3) An aggregate demand forecast for an intermediate planning period
4) A model that combines forecasts and costs
Option C mentions a mathematical model that will minimize costs over the intermediate planning period, which is actually the fourth requirement mentioned above. Therefore, option C is not one of the four things needed for aggregate planning.

Question 13

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 spans from three to eighteen months. It aims to balance demand and supply, utilizing resources and production capabilities to meet demand without over or under-producing.

Question 14

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 15

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 produces a plan for how much capacity is needed to produce a certain level of output, not necessarily which specific products are made. The specific products made would be determined by detailed scheduling and production planning.

Question 16

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)number of cars to e exported

Accepted Answer

Aggregate planning is concerned with determining the overall level of production, which is represented by the total number of cars to produce during a given time period. Options A, B, and C pertain to factors that may influence the mix of products produced, rather than the overall level of production. Option E pertains to a specific market segment, which is not necessarily relevant to the determination of overall production levels.

Question 17

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)Aggregate planning is also known as aggregate sequencing.

Accepted Answer

Aggregate planning involves using the adjustable part of capacity (such as overtime, idle time, or hiring/temporary workforce) to meet production requirements, rather than manipulating supply or demand directly. Work station loading and job assignments are examples of detailed scheduling, which comes after aggregate planning. Advertising/promotion can be part of demand management, but not necessarily manipulation. Aggregate sequencing is not a commonly used term.

Question 18

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)tactical planning

Accepted Answer

Aggregate planning is the term used for medium-range capacity planning with a time horizon of three to eighteen months, focusing on meeting demand while minimizing costs over that period.

Question 19

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 operational tasks that are concerned with the day-to-day activities of a business. These tasks are short-term in nature and fall under short-range planning.

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 falls specifically under the duties of an operations manager, as it pertains to the management of the day-to-day operations and logistics of a business. The other options may involve operations management to some extent, but also involve other areas such as strategic planning, finance, and marketing.

Quiz 13: Aggregate Planning

Disaggregation

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

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

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

The typical time horizon for aggregate planning is

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

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

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

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

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

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

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

Aggregate planning is capacity planning for

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 statements about aggregate planning is false?

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 true?

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

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

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