Deck 19: Aggregate Operations Planning and Master Scheduling

Question 1

The use of tables and charts in aggregate operations planning enables planners to develop and compare alternative production plans.

Answer 1

True

Question 2

For aggregate planning,groups of similar products are lumped together and treated as equivalent products for planning purposes.

Answer 2

True

Question 3

An advantage of a "chase" strategy in aggregate operations planning is that it provides greater stability in operations based on a steady rate of output.

Answer 3

False

Question 4

Make-to-order companies use inventory whereas make-to-stock companies use backorders to shift demand.

Question 5

Backorders can be thought of as negative inventory.

Question 6

Among the basic demand options in aggregate operations planning are promotion and the use of overtime.

Question 7

An example of a capacity option in aggregate operations planning is stockpiling inventories.

Question 8

In aggregate operations planning,both pricing and promotion are options to shift demand to align more closely with capacity.

Question 9

Aggregate operations planning is not an effective technique for organizations that experience seasonal fluctuations in demand.

Question 10

A major factor in choosing a strategy in aggregate operations planning is overall cost.

Question 11

Master production scheduling (MPS)involves long term capacity planning that typically covers a time horizon of one to three years.

Question 12

A "chase" demand strategy in aggregate operations planning would be attempting to match capacity and demand,period by period.

Question 13

The goal of aggregate operations planning is to achieve a production plan that will satisfy total forecast demand at minimum cost.

Question 14

Aggregate operations planning is used to establish general levels of employment,production levels and changes in inventory levels over an intermediate range of time.

Question 15

An advantage of a "chase" strategy in aggregate operations planning is that inventories can be kept relatively low.

Question 16

An example of a demand option in aggregate operations planning is the use of backorders.

Question 17

Among the basic capacity options in aggregate operations planning are hiring workers and the use of overtime.

Question 18

Sales and operations planning is typically performed once a year with monthly updates.

Question 19

Trial and error methods are commonly used by aggregate operations planners in developing aggregate operations plans.

Question 20

Aggregate operations planners sometimes use optimization techniques such as linear programming for planning.

Question 21

Rough-cut capacity planning converts the MPS into requirements for key resources in order to test the feasibility of a proposed MPS.

Question 22

Disaggregating an aggregate production plan leads to a master production schedule.

Question 23

Aggregate operations planning is capacity planning for:

A)a long-term horizon of several years.
B)an intermediate-term horizon,typically 12 months.
C)a short-term horizon of four to six weeks.
D)day-to-day production for one or two weeks.
E)machine loading in a plant on hour-by-hour basis.

Question 24

The master production schedule indicates the quantity and timing for planned production of an item.

Question 25

Which of the following are examples of intermediate operations planning decisions?

A)Deciding on the amount of inventory to hold
B)Deciding on which production equipment to purchase
C)Deciding on the location of a production facility
D)Deciding on what products/services to offer
E)Job sequencing

Question 26

Master production scheduling has three inputs for each product: the beginning inventory,quantities already committed to customers,and back orders.

Question 27

One area that aggregate operations planning decisions relate to is:

A)job sequencing.
B)order quantities.
C)inventory levels.
D)location.
E)layout.

Question 28

An example of a capacity option in aggregate operations planning for services is inventory.

Question 29

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

A)Promotion
B)Backordering
C)Pricing
D)Subcontracting
E)Exporting

Question 30

Which of the following best describes aggregate operations planning?

A)Linking long term capacity decisions with intermediate term production
B)Integrating several planning techniques to develop an MPS
C)An operations plan to support sales forecasting
D)Using predicted demand to plan the general levels of employment,output,and inventories required
E)An employee scheduling technique

Question 31

Available-to-promise (ATP)inventory for the first week is equal to the beginning inventory plus planned production quantity,if any,less the committed customer orders before the next planned production quantity.

Question 32

After the first period of the planning horizon,available-to-promise (ATP)inventory is computed only for those periods in which there is a planned production quantity.

Question 33

Which of the following is not an input to the aggregate operations planning process?

A)Production rates (capacities)
B)Demand forecasts
C)Initial inventory levels
D)Master production schedules
E)Limits on the use of overtime

Question 34

Aggregate operations planning does not require which of the following information?

A)A forecast of expected demand
B)Current levels of inventory
C)Policies regarding employment
D)Production rates
E)Maintenance schedules

Question 35

Master production schedules are often divided into three zones: the emergency,trading,and planning zones.

Question 36

Essentially,the output of aggregate operations planning is:

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

Question 37

Aggregate operations planners balance actions that influence:

A)demand and inventories.
B)demand and costs.
C)capacity and inventories.
D)capacity and costs.
E)capacity and demand.

Question 38

One option in aggregate planning that shifts the pattern of demand from one period to another is:

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

Question 39

Which one of the following would not be considered a decision option for the purpose of aggregate operations planning?

A)Inventory levels
B)Manpower levels
C)Pricing
D)Production costs
E)Promotion

Question 40

In doing "aggregate operations planning" for a firm producing paint,the aggregate operations planners would most likely base their planning on:

A)gallons of paint as an equivalent unit of production,without concern for the different colours to be produced.
B)gallons of paint as an equivalent unit of production,but be concerned with the different colours to be produced.
C)all the different sizes to be produced such as gallons,quarts,and pints.
D)all the different sizes and all the different colours to be produced.

Question 41

One option for altering the capacity available in aggregate planning is:

A)use of overtime or slack time.
B)pricing.
C)promotion.
D)backorders.
E)early orders

Question 42

Which of the following is not a basic option for altering the availability of capacity in service?

A)Overtime
B)Hiring/layoff
C)Part time
D)Inventory
E)Idle time

Question 43

Which of the following would not be a strategy associated with adjusting aggregate capacity to meet expected demand?

A)Hiring part time workers
B)Vary the size of the workforce
C)Use overtime to increase workforce utilization
D)Allow inventory levels to vary
E)Use backorders

Question 44

Inventory information for firm ABC: What was the inventory at the end of March,2014?

A)350
B)250
C)150
D)50
E)100

Question 45

Which of the following is not true about using overtime for changing capacity?

A)It can be implemented quickly.
B)It avoids the challenges of hiring more workers.
C)It typically results in higher productivity.
D)It typically increases payroll costs.
E)It can be implemented easily.

Question 46

Which term is most closely associated with the term disaggregation?

A)Subcontracting
B)Master schedule
C)Backordering
D)Varying inventory levels
E)Firing and laying off

Question 47

One option for altering the period when manufacturing capacity is available is:

A)pricing.
B)promotion.
C)use of slack time for training.
D)stockpiling inventories.
E)early orders

Question 48

For each product in the schedule,which of the following are outputs from the master production schedule?

A)Beginning inventory levels
B)Demand forecasts
C)Subcontracting costs
D)Number of employees to hire
E)Planned production

Question 49

In using the "chase demand strategy" variations in demand could be met by:

A)hiring part time workers.
B)subcontracting.
C)the use of overtime.
D)varying inventory levels.

Question 50

The main disadvantage(s)of trial-and-error techniques used for aggregate operations planning is (are):

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

Question 51

Which of the following is not an input of the master production schedule?

A)Beginning inventory
B)Demand forecasts for each period of the schedule
C)Orders already committed to customers
D)Hiring policies

Question 52

In order to use the "level output/workforce strategy",variations in demand are met by:

A)varying output during regular time without changing employment levels.
B)keeping output level by changing workforce levels.
C)relying on overtime to adjust capacity.
D)using some combination of inventories,subcontracting and back orders.
E)Subcontracting

Question 53

The two primary factors in choosing an aggregate operations planning strategy are:

A)company policy and the master schedule.
B)overall costs and the master schedule.
C)company policy and overall costs.
D)company policy and the demand forecast.
E)overall costs and the demand forecast.

Question 54

In practice,the more commonly used techniques for aggregate operations planning are:

A)optimization techniques.
B)trial-and-error techniques.
C)marketing campaigns to influence demand.
D)simulation models.
E)some other technique not listed.

Question 55

Which of the following is not a consideration in the decision to use hiring and laying off permanent full-time workers as a capacity option?

A)Union contract restrictions
B)Nature of the operation regarding accommodating changes in staffing levels
C)Available supply of workers
D)Skill level of workers
E)Finished goods inventory that is stockpiled

Question 56

Linear programming models used to produce an aggregate operations plan are based on a total cost formula as a linear objective function and:

A)is the most widely used technique for aggregate operations planning.
B)is primarily used to address capacity options.
C)is primarily used to address demand options.
D)establishes an optimal (least cost)solution (if it exists).
E)will balance both demand and capacity.

Question 57

Inventory information for firm ABC: What is the expected inventory at the end of April,2014?

A)350
B)250
C)150
D)50
E)100

Question 58

Which of the following is not true about the transportation model as an approach to aggregate operations planning?

A)It can only be used when there is no hiring or laying off.
B)It is more complex to solve than a linear programming model.
C)It requires capacity information.
D)It assumes linear terms and relationships among variables.
E)It requires cost information

Question 59

The result of disaggregating the aggregate operations plan is the:

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

Question 60

Aggregate operations planners seek to match supply and demand at minimum overall cost and:

A)keeping inventories at a minimum.
B)hiring when necessary.
C)keeping inventories at a maximum.
D)by staying within company policy.
E)using only part time workers.

Question 61

Use the transportation method to develop an optimum aggregate production plan,given the following data:
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Question 62

A firm has 43 units of a certain product on hand.Forecasts for the first two planning periods are 20 units each.A production quantity of 80 units is planned to be available in period 3.Customer orders are 22 for period 1 and 17 for period 2. What quantity is available for commitment to new customers prior to the receipt of the production quantity in week 3?

A)21
B)1
C)20
D)4
E)12

Question 63

Prepare a master production schedule based on the following information:
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Question 64

Using the given information,determine the following.
a.What is total forecasted demand?
b.What is total regular time capacity?
c.How should overtime capacity be utilized?
d.What are total regular time costs?
e.What are total overtime costs?
f.What are total carrying costs?
g.What are total backorder costs?
h.What are total costs for each period?
i.What are total costs for the six periods?
j.If hiring cost is $500 and firing cost if $400,would it be more economical on a per unit basis to use overtime or to hire and fire a temporary person (who can produce a maximum of 40 units per period)? What would be the difference in total costs for the six periods?

Question 65

A firm has 43 units of a certain product on hand.Forecasts for the first two planning periods are 20 units each.A production quantity of 80 units is planned to be available in period 3.Customer orders are 22 for period 1 and 17 for period 2. What is the projected on hand inventory at the end of period 2?

A)21
B)1
C)12
D)20
E)4

Question 66

A firm has 56 units of product X on hand.Forecasts of demand are for 20 units per week.A production quantity of 100 units is planned for period 3.Customer orders are 24 for period 1,18 for period 2,and 15 for period 3. What is the projected on hand inventory at the end of period 2?

A)14
B)32
C)12
D)20
E)22

Question 67

Master scheduling in process industries is usually performed in two levels: first by family,then by ____ within each family.

A)items
B)aggregate demand
C)SKUs within each family
D)MPS
E)aggregate family

Question 68

A manager has prepared a forecast of expected aggregate demand for the next six months.Develop an aggregate production plan to meet this demand given this additional information: A level production rate of 100 units per month will be used.Backorders are allowed,and they are charged at the rate of $8 per unit per month.Inventory holding costs are $1 per unit per month.Determine the cost of this plan if regular time cost is $20 per unit and beginning inventory is zero.
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Question 69

Which of the following is not a master production scheduling zones?

A)Emergency
B)Production
C)Trading
D)Planning

Question 70

A firm has 56 units of product X on hand.Forecasts of demand are for 20 units per week.A production quantity of 100 units is planned for period 3.Customer orders are 24 for period 1,18 for period 2,and 15 for period 3. What quantity is available for commitment to new customers prior to the receipt of the production quantity in week 3?

A)14
B)32
C)12
D)20
E)22

Question 71

That portion of projected inventory which enables marketing to make realistic commitments about delivery dates for new orders is:

A)beginning inventory.
B)safety stock inventory.
C)available-to-promise inventory.
D)marketable inventory.
E)banked inventory.

Question 72

Given the projected demands for the next six months,prepare an aggregate production plan that uses inventory,regular time and overtime,and backorders.Regular time is 150 units per month.Overtime is a maximum of 20 units per month.Overtime cost is $30 per unit,backorder cost is $20 per unit,inventory holding cost is $5 per unit,regular time cost of $20 per unit,and beginning inventory is zero.
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Question 73

Which planning process converts the MPS into requirements for key resources in order to test the feasibility of a proposed MPS?

A)Master production scheduling
B)Aggregate planning
C)Trial-and-error
D)Rough-cut capacity planning
E)Trade-off analysis