Question 1

Aggregate forecasts are always better than the set of component forecasts because the standard deviation of the total (T) of (n) components is equal to the _____ multiplied by the standard deviation of the individual components.
A)square root of St
B)square root of T
C)square root of Pt
D)square root of n

Accepted Answer

The standard deviation of the total (T) of (n) components is equal to the square root of n multiplied by the standard deviation of the individual components. This principle is based on the statistical property that, when aggregating forecasts or components, the variability (measured as standard deviation) of the aggregate tends to be less than the sum of the individual variabilities, assuming the components are not perfectly correlated. This is why aggregate forecasts can be more accurate and reliable than individual or component forecasts.

Question 2

If management is not in control of the situation,_____ occur because of neglect at all three levels of production planning.
A)gains
B)losses
C)both a and b
D)breakeven
E)none of the above

Accepted Answer

If management is not in control of the situation, losses occur because of neglect at all three levels of production planning. Lack of planning can lead to poor quality, waste, delays, and higher costs, which all translate into financial losses for the organization.

Question 3

_____ is achieved by collecting and lumping all items to be produced together.
A)Strategic planning
B)Detailed scheduling
C)Company planning
D)Aggregate planning

Accepted Answer

Aggregate planning is the process of collecting and lumping all items to be produced together, typically over a period of 3 to 18 months, to determine overall production levels and resource requirements. It involves balancing expected demand with production capacity and inventory levels to ensure that customer needs are met efficiently and cost-effectively. Strategic planning, detailed scheduling, and company planning are all related to the overall management and operation of a business, but do not specifically refer to the process of aggregate planning.

Question 4

Aggregate-planning methods can derive better solutions when P/OM can develop
A)ways to expand the number of different products that can be made by a specific set of resources.
B)ways to convert strategies into tactics.
C)ways to expand the number of resources that can make a class of products.
D)both a and c
E)both a and b

Accepted Answer

The statement "ways to expand the number of different products that can be made by a specific set of resources" (option A) and "ways to expand the number of resources that can make a class of products" (option C) both point towards the need for P/OM to find ways to efficiently utilize available resources. By expanding the variety of products that can be made by a particular set of resources or by increasing the number of resources that can produce a particular class of products, P/OM can optimize resource utilization and enhance the effectiveness of aggregate-planning methods. Therefore, the best choice is D, i.e., both a and c. Option E (both a and b) is not valid as option B is not relevant to the statement.

Question 5

Which variables are relevant production factors of aggregate planning?
A)demand aggregated over time
B)supply aggregated over time
C)overtime production
D)workforce level
E)all of the above

Accepted Answer

All of the variables mentioned are relevant production factors for aggregate planning. Demand and supply aggregated over time are the main inputs, while overtime production and workforce level are key decision variables that impact the level of production output.

Question 6

Before trying to do detailed,tactical scheduling,_____ should be used to avoid costly mistakes arising from not being prepared with the proper resources at the right time.
A)company planning
B)production scheduling
C)aggregate planning
D)strategic planning
E)enterprise planning

Accepted Answer

Aggregate planning is the process of developing a general plan for a firm's workforce, production levels, and inventory based on expected customer demand. It helps to ensure that the necessary resources are available at the right time to avoid costly mistakes. Before detailed, tactical scheduling can begin, firms need to have a framework in place that outlines what needs to be produced and when. Aggregate planning provides this framework, allowing for more effective scheduling and resource allocation. Company planning, production scheduling, strategic planning, and enterprise planning may all be components of aggregate planning but are not as appropriate for avoiding costly scheduling mistakes.

Question 7

To justify the _____,the sum of costs associated with a constant workforce must be less than the sum of costs associated with a variable workforce.
A)chasing policy
B)constant production strategy
C)hybrid policy
D)combination strategy

Accepted Answer

The statement is referring to the constant workforce strategy, where the company maintains a fixed number of employees regardless of demand fluctuations. To justify this strategy, the costs associated with keeping a constant workforce must be less than the costs associated with hiring and firing employees as demand shifts. Both the hybrid policy and combination strategy involve a mix of constant and variable workforce, so they are not directly related to the statement. The chasing policy involves adjusting the workforce to match demand, so it is not relevant to this question.

Question 8

The supply chain is continuously value adding.It is in _____ with demand.
A)synchronization
B)separation mode
C)total correlation
D)production

Accepted Answer

The term "synchronization" refers to the alignment of supply chain processes with customer demand, which results in value creation. Thus, option A is the best choice as it describes the relationship between supply chain and demand. Option B, separation mode is not applicable as it does not provide any information on how the supply chain adds value. Option C, total correlation, is incorrect because there may not always be a complete correlation between supply chain and demand. Option D, production, is too narrow a term to capture the breadth of activities involved in the supply chain.

Question 9

Backordered work is shown as
A)positive inventory.
B)negative inventory.
C)cumulative inventory.
D)rework.

Accepted Answer

Backordered work represents demand that has been ordered but not yet fulfilled, which means that the inventory level is lower than the demand. Therefore, it is considered as negative inventory.

Question 10

What business product lines have customers with ordering behaviors called fill or kill?
A)video and music tapes
B)lipstick and cosmetics
C)caviar and champagne
D)none of the above
E)all of the above

Accepted Answer

Fill or kill is an order that must be executed immediately and in its entirety, or not at all. This type of order is typically used for products that are in high demand and have a limited supply, such as caviar and champagne.

Question 11

Which level of production planning requires a forecast?
A)first level (aggregate planning)
B)second level (loading)
C)third level (sequencing)
D)fourth level (LP planning)

Accepted Answer

Forecasting is required in aggregate planning, which is the first level of production planning. This involves a high-level estimation of demand, capacity, and production levels over a certain period of time. The other levels of production planning deal with more specific and detailed aspects of production, such as loading and sequencing, and may not involve forecasting.

Question 12

For the slightly chasing policy model (C₁) backorders cost $100 per occurrence,costs for carrying inventory are $25 per unit,hires cost $200 per instance,and reductions cost $300 per event - all occurring within the time period.Then,total variable cost TVC (C₁) is
A)$12,800
B)$5,800
C)$22,800
D)$12,925

Accepted Answer

The total variable cost (TVC) is calculated by summing up all the costs: backorders, carrying inventory, hires, and reductions. Given the costs per occurrence/unit, the correct total is $12,800.

Question 13

The specific purpose of _____ is to schedule production for the job shop.
A)aggregate planning
B)detailed schedules
C)strategic business plans
D)planning horizons
E)disaggregate planning

Accepted Answer

The answer of The specific purpose of _____ is to...

Question 14

_____ is (are) generated by a variety of customers for the different kinds of products made by the job shop or the different kinds of services offered by job shops.
A)Supply
B)Aggregate plans
C)Demand
D)Production plans
E)Information

Accepted Answer

Demand refers to the requirements or requests made by customers for the different products or services of a job shop. This demand can be influenced by various factors such as pricing, quality, and availability, among others. The job shop must then plan its production or services based on this demand to optimize its resources and meet customer expectations.

Question 15

The quality of sequencing decisions is always a consequence of using 1._____,and 2._____,however sequencing skills and knowledge are based on experience with customers' wants and process requirements.
A)AP methods;loading decisions
B)loading decisions;sequencing data
C)loading decisions;AP methods
D)forecasts;AP methods

Accepted Answer

The answer of The quality of sequencing decisions is always...

Question 16

Because many job shops provide services and not goods,it pays to emphasize the fact that AP is useful to _____ kinds of job shops.
A)most
B)both
C)specific
D)many

Accepted Answer

The statement emphasizes that job shops provide services and not goods. Therefore, the use of AP is useful to job shops that provide both types of services and goods. Therefore, the best choice is "both" which corresponds to option B.

Question 17

The_____ is the producer's general plan for getting work done.
A)company plan
B)aggregate plan
C)detailed schedule
D)strategic plan

Accepted Answer

The aggregate plan is the producer's general plan for getting work done, outlining the resources and capacities to meet demand.

Question 18

An aggregate production scheduling plan slightly chases demand when _____.
A) 
B) 
C) 
D)

Accepted Answer

The term "chases demand" means that the production schedule is close to or follows the actual demand. Therefore, an aggregate production scheduling plan that slightly chases demand means that it is slightly in sync with the actual demand, which is reflected in option C.

Question 19

For the example in the text,total production capacity consists of the output of what machine(s)?
A)M1
B)M2
C)M3
D)M4
E)all of the above

Accepted Answer

As per the text, the total production capacity consists of the output of all four machines, i.e., M1, M2, M3, and M4. Therefore, the correct choice is E, i.e., all of the above.

Question 20

How many distinct levels are found in the production planning process?
A)2
B)3
C)4
D)5

Accepted Answer

The production planning process typically consists of three distinct levels: strategic (long-term planning), tactical (medium-term planning), and operational (short-term or day-to-day planning).

Quiz 13: Aggregate Planning to Balance Supply and Demand

Aggregate forecasts are always better than the set of component forecasts because the standard deviation of the total (T) of (n) components is equal to the _____ multiplied by the standard deviation of the individual components.

If management is not in control of the situation,_____ occur because of neglect at all three levels of production planning.

_____ is achieved by collecting and lumping all items to be produced together.

Aggregate-planning methods can derive better solutions when P/OM can develop

Which variables are relevant production factors of aggregate planning?

Before trying to do detailed,tactical scheduling,_____ should be used to avoid costly mistakes arising from not being prepared with the proper resources at the right time.

To justify the _____,the sum of costs associated with a constant workforce must be less than the sum of costs associated with a variable workforce.

The supply chain is continuously value adding.It is in _____ with demand.

Backordered work is shown as

What business product lines have customers with ordering behaviors called fill or kill?

Which level of production planning requires a forecast?

For the slightly chasing policy model (C₁) backorders cost $100 per occurrence,costs for carrying inventory are $25 per unit,hires cost $200 per instance,and reductions cost $300 per event - all occurring within the time period.Then,total variable cost TVC (C₁) is

The specific purpose of _____ is to schedule production for the job shop.

_____ is (are) generated by a variety of customers for the different kinds of products made by the job shop or the different kinds of services offered by job shops.

The quality of sequencing decisions is always a consequence of using 1._,and 2._,however sequencing skills and knowledge are based on experience with customers' wants and process requirements.

Because many job shops provide services and not goods,it pays to emphasize the fact that AP is useful to _____ kinds of job shops.

The_____ is the producer's general plan for getting work done.

An aggregate production scheduling plan slightly chases demand when _____.

For the example in the text,total production capacity consists of the output of what machine(s) ?

How many distinct levels are found in the production planning process?