Operations management stevenson 11th edition test bank ch11

ch11 Student: _ Aggregate planning is intermediate-range capacity planning that typically covers a time horizon of one to three months True False The goal of aggregate planning is to achieve a production plan that attempts to balance the organization's resources and meet expected demand True False Aggregate planners are concerned with the quality and quantity of expected demand True False Aggregate planning is used to establish general levels of employment, output, and inventories over an intermediate-range of time True False The assignment of work to specific machines and people are examples of aggregate planning True False The output from aggregate planning is a detailed business plan covering the next to 12 months True False Demand can be altered in aggregate planning by promotion and producing additional product using overtime True False Capacity can be modified in aggregate planning by promotion and producing additional product using overtime True False Organizations facing seasonal changes in demand are prevented from using aggregate planning techniques True False 10 Seasonality in demand has the advantage of leveling out requirements for our product or service True False 11 A level capacity strategy is also known as a chase demand strategy True False 12 An advantage of a "chase" strategy for aggregate planning is that inventories can be kept relatively low True False 13 Linear programming models yield the optimal solution True False 14 Ultimately the overriding factor in choosing a strategy in aggregate planning is overall cost True False 15 Aggregate planners commonly use trial-and-error methods in developing aggregate plans True False 16 The use of tables and charts in aggregate planning usually enables planners to arrive at an optimal plan True False 17 Aggregate planners typically use mathematical techniques such as linear programming and linear decision rules for planning True False 18 Disaggregating an aggregate plan leads to a master schedule True False 19 The master schedule indicates the quantity and timing for delivery of a product, but not the dates production will need to start True False 20 Departmental budgeting is an example of aggregate planning True False 21 Master schedulers are employed primarily by service organizations True False 22 Subcontracting 'in' would apply to periods in which our organization has excess capacity True False 23 Available-to-promise in the first week is equal to beginning inventory plus MPS quantity, if any, less committed customer orders before the next MPS quantity True False 24 A time fence in the master schedule is used to prevent unauthorized people from making changes to the schedule True False 25 After the first period of the planning horizon, available-to-promise is computed only for those periods in which there is an MPS quantity True False 26 In the master production schedule, production is planned for the next period whenever the available-topromise quantity becomes negative True False 27 Which of the following best describes aggregate planning? A the link between intermediate term planning and short term operating decisions B a collection of objective planning tools C make or buy decisions D an attempt to respond to predicted demand within the constraints set by product, process and location decisions E manpower planning 28 Accommodating peak demands and effectively using labor resources during periods of low demand would be the goal of aggregate planners in … A Manufacturing B Military C Archeology D Libraries E Financial Services 29 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 one or more years 30 One area to which aggregate planning decisions relate is: A job sequencing B customer order quantities C inventory levels D location E layout 31 Which of the following is an input to aggregate planning? A beginning inventory B forecasts for each period of the schedule C customer orders D all of the above E quantity discounts 32 Essentially, the output of aggregate planning is the: A marketing plan B production plan C rough-cut capacity plan D assignment plan E material requirements plan 33 In doing "aggregate planning" for a firm producing paint, the aggregate planners would most likely deal with: A just gallons of paint, without concern for the different colors and sizes B gallons of paint, but be concerned with the different colors to be produced C gallons, quarts, pints, and all the different sizes to be produced D all the different sizes and all the different colors by size E none of the above 34 Aggregate planning requires which of the following information? A a forecast of expected demand B current levels of inventory C (a) and (b) D policies regarding employment levels E all of the above 35 Aggregate planners attempt to balance: A demand and inventories B demand and costs C capacity and inventories D capacity and costs E capacity and demand 36 Which of the following is not an input to the aggregate planning process? A resources available B demand forecast C policies on work force changes D master production schedules E cost information 37 Which one of the following would not be considered a decision option for purposes of aggregate planning? A inventory levels B manpower levels C pricing D production costs E promotion 38 Which of the following is not a basic option for altering the availability of capacity in a service environment? A overtime B hiring/layoff C part time D inventory E All of these are basic capacity options 39 Which one of the following is not a basic option for altering demand? A promotion B backordering C pricing D subcontracting E All are demand options 40 One option for altering the pattern of demand is: A backorders B overtime C part-time workers D inventories E subcontracting 41 Which of the following would not be a strategy associated with adjusting aggregate capacity to meet expected demand? A subcontract B vary the size of the workforce C vary the intensity of workforce utilization D allow inventory levels to vary E use backorders 42 One option for altering the availability of manufacturing capacity is: A pricing B promotion C backorders D inventories E none of the above apply to manufacturing capacity 43 One option for altering the availability of capacity is: A use of overtime or slack time B pricing C promotion D backorders E none of the above 44 In order to use the "level capacity strategy," variations in demand are met by: A varying output during regular time without changing employment levels B varying output during regular time by changing employment levels C (a) and (b) D using combination of inventories, overtime, part time, and back orders E price adjustments 45 In using the "chase strategy" variations in demand could be met by: A varying output during regular time without changing employment levels B varying output during regular time by changing employment levels C (a) and (b) D varying inventory levels E price increases 46 Uncommitted inventory is called … A Available-to-promise inventory B Free inventory C Safety stock D Lead time inventory E Obsolete inventory 47 Aggregate planners seek to match supply and demand: A at minimum overall cost B by staying within company policy C (a) and (b) D keeping inventories at a minimum E all of the above 48 In practice, the more commonly used techniques for aggregate planning are: A mathematical techniques B informal trial-and-error techniques C (a) and (b) about equally D simulation models E linear programming optimization 49 The main disadvantage(s) of informal techniques used for aggregate planning is(are): A they are expensive to B they may not result in the best plan C they take a long time to D they require use of a computer E lack of formal education of the planners 50 Inventory information for firm ABC: What is the expected inventory at the end of April, 1999? A 350 B 250 C 150 D 50 E none of the above 51 Inventory information for firm ABC: What was the inventory at the end of March, 1999? A 350 B 250 C 150 D 50 E none of the above 52 Linear programming to produce an aggregate plan: A will produce the best plan if accurate inputs are used B is the most widely used technique C (a) and (b) D will produce a plan that may not be the best plan E requires an excel spread sheet 53 Simulation to produce an aggregate plan: A will produce the best plan B is the most widely used technique C both (a) and (b) D will produce a plan that may not be the best plan E requires a minimum of iterations to be accurate 54 Which term is most closely associated with the term disaggregation? A subcontracting B master schedule C diversity D varying inventory levels E firing and laying off 55 The direct result of disaggregating the aggregate plan is the: A marketing plan B production plan C rough-cut capacity plan D master schedule E material requirements plan 56 Moving from the aggregate plan to a master production schedule requires: A rough cut capacity planning B disaggregation C sub-optimization D strategy formulation E chase strategies 57 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 high margin inventory E none of the above 58 Proactive and Reactive aggregate planning strategies are best associated with: A Input and Output B Make and Buy C Quantitative and Qualitative D Exact and Approximate E Demand and Capacity options 59 A manager has prepared a forecast of expected aggregate demand for the next six months Develop an aggregate 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 in ending inventory Determine the cost of this plan if regular time cost is $20 per unit and beginning inventory is zero 55 The direct result of disaggregating the aggregate plan is the: A marketing plan B production plan C rough-cut capacity plan D master schedule E material requirements plan The aggregate plan is disaggregated into the master schedule AACSB: Reflective Thinking Blooms: Remember Difficulty: Medium Learning Objective: 11-05 Describe the master scheduling process and explain its importance Stevenson - Chapter 11 #55 Topic Area: Disaggregating the Aggregate Plan 56 Moving from the aggregate plan to a master production schedule requires: A rough cut capacity planning B disaggregation C sub-optimization D strategy formulation E chase strategies The aggregate plan is disaggregated into the master schedule AACSB: Reflective Thinking Blooms: Remember Difficulty: Hard Learning Objective: 11-05 Describe the master scheduling process and explain its importance Stevenson - Chapter 11 #56 Topic Area: Disaggregating the Aggregate Plan 57 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 high margin inventory E none of the above Available-to-promise values are calculated to help marketing make realistic commitments AACSB: Reflective Thinking Blooms: Remember Difficulty: Easy Learning Objective: 11-05 Describe the master scheduling process and explain its importance Stevenson - Chapter 11 #57 Topic Area: The Master Scheduling Process 58 Proactive and Reactive aggregate planning strategies are best associated with: A Input and Output B Make and Buy C Quantitative and Qualitative D Exact and Approximate E Demand and Capacity options Demand and capacity are the targets of proactive and reactive aggregate planning strategies AACSB: Reflective Thinking Blooms: Remember Difficulty: Medium Learning Objective: 11-02 Identify the variables decision makers have to work with in aggregate planning and some of the possible strategies they can use Stevenson - Chapter 11 #58 Topic Area: Basic Strategies for Meeting Uneven Demand 59 A manager has prepared a forecast of expected aggregate demand for the next six months Develop an aggregate 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 in ending inventory Determine the cost of this plan if regular time cost is $20 per unit and beginning inventory is zero The aggregate plan should look like this: With costs as follows: Total cost of this plan is $12,200 Feedback: Production remains constant in a level aggregate plan AACSB: Analytic Blooms: Apply Difficulty: Medium Learning Objective: 11-04 Prepare aggregate plans and compute their costs Stevenson - Chapter 11 #59 Topic Area: Basic Strategies for Meeting Uneven Demand 60 Given the projected demands for the next six months, prepare an aggregate plan that uses inventory, regular time and overtime, and backorders The plan must wind up with no units in ending inventory in Period Regular time capacity is 150 units per month Overtime capacity is 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 The aggregate plan should look like this: With costs as follows: Total cost of this plan is $20,200 Feedback: Overtime and backordering are used to work around demand capacity imbalances in this scenario AACSB: Analytic Blooms: Apply Difficulty: Medium Learning Objective: 11-04 Prepare aggregate plans and compute their costs Stevenson - Chapter 11 #60 Topic Area: Basic Strategies for Meeting Uneven Demand 61 Use either the transportation method or linear programming to develop an optimum aggregate plan, given the following data: The optimum aggregate plan for this scenario is as follows: The total cost for this plan is $5,320 Feedback: This is an optimal solution found through linear programming AACSB: Analytic Blooms: Apply Difficulty: Medium Learning Objective: 11-04 Prepare aggregate plans and compute their costs Stevenson - Chapter 11 #61 Topic Area: Techniques for Aggregate Planning 62 Prepare a master schedule based on the following information: Currently there are 145 units in inventory Policy calls for a fixed order quantity of 250 units Feedback: There are units available-to-promise in several time periods AACSB: Analytic Blooms: Apply Difficulty: Medium Learning Objective: 11-05 Describe the master scheduling process and explain its importance Stevenson - Chapter 11 #62 Topic Area: The Master Scheduling Process Stevenson - Chapter 11 63 What is total forecasted demand? 1,800 units Feedback: Simply add up demand forecasts across the six periods AACSB: Analytic Blooms: Apply Difficulty: Medium Learning Objective: 11-04 Prepare aggregate plans and compute their costs Stevenson - Chapter 11 #63 Topic Area: Basic Strategies for Meeting Uneven Demand 64 What is total regular time capacity? 1,680 units Feedback: Multiply the per-period regular-time capacity (280) by six AACSB: Analytic Blooms: Apply Difficulty: Medium Learning Objective: 11-04 Prepare aggregate plans and compute their costs Stevenson - Chapter 11 #64 Topic Area: Basic Strategies for Meeting Uneven Demand Stevenson - Chapter 11 65 How should overtime capacity be utilized? 40 units each in periods 3, 4, and Feedback: This represents the best use of overtime capacity AACSB: Analytic Blooms: Apply Difficulty: Medium Learning Objective: 11-04 Prepare aggregate plans and compute their costs Stevenson - Chapter 11 #65 Topic Area: Basic Strategies for Meeting Uneven Demand 66 What are total regular time costs? $33,600 Feedback: Multiply units produced on regular time by their regular time cost AACSB: Analytic Blooms: Apply Difficulty: Medium Learning Objective: 11-04 Prepare aggregate plans and compute their costs Stevenson - Chapter 11 #66 Topic Area: Basic Strategies for Meeting Uneven Demand 67 What are total overtime costs? $3,600 Feedback: Multiply the units produced on overtime by their per-unit overtime cost AACSB: Analytic Blooms: Apply Difficulty: Medium Learning Objective: 11-04 Prepare aggregate plans and compute their costs Stevenson - Chapter 11 #67 Topic Area: Basic Strategies for Meeting Uneven Demand 68 What are total carrying costs? $520 Feedback: For every unit in inventory at the end of a period, multiply by the per-unit per-period holding cost AACSB: Analytic Blooms: Apply Difficulty: Medium Learning Objective: 11-04 Prepare aggregate plans and compute their costs Stevenson - Chapter 11 #68 Topic Area: Basic Strategies for Meeting Uneven Demand 69 What are total backorder costs? $400 Feedback: For every unit backordered, multiply by the per-unit backorder cost AACSB: Analytic Blooms: Apply Difficulty: Medium Learning Objective: 11-04 Prepare aggregate plans and compute their costs Stevenson - Chapter 11 #69 Topic Area: Basic Strategies for Meeting Uneven Demand 70 What are total costs for each period? $5,680; $5,760; $6,980; $6,900; $7,200; $5,600 Feedback: Use appropriate costs to calculate these totals AACSB: Analytic Blooms: Apply Difficulty: Medium Learning Objective: 11-04 Prepare aggregate plans and compute their costs Stevenson - Chapter 11 #70 Topic Area: Basic Strategies for Meeting Uneven Demand 71 What are total costs for the six periods? $38,120 Feedback: Use appropriate costs to calculate these totals AACSB: Analytic Blooms: Apply Difficulty: Medium Learning Objective: 11-04 Prepare aggregate plans and compute their costs Stevenson - Chapter 11 #71 Topic Area: Basic Strategies for Meeting Uneven Demand 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 Customer orders are 22 for period and 17 for period Stevenson - Chapter 11 72 What is the projected on-hand inventory at the end of period 2? A 21 B C 12 D 20 E impossible to say without more information The POH at end of period is 21 Subtract from this the forecasted demand for period AACSB: Analytic Blooms: Apply Difficulty: Medium Learning Objective: 11-04 Prepare aggregate plans and compute their costs Stevenson - Chapter 11 #72 Topic Area: The Master Scheduling Process 73 What quantity is available for commitment to new customers in either of the first two periods? A 21 B C 20 D E impossible to say without more information Subtract from the beginning on-hand inventory (43) the booked orders until the third week (39) AACSB: Analytic Blooms: Apply Difficulty: Medium Learning Objective: 11-04 Prepare aggregate plans and compute their costs Stevenson - Chapter 11 #73 Topic Area: The Master Scheduling Process A firm has 56 units of product X on hand Forecasts of demand are for 20 units per week An MPS quantity of 100 units is planned to arrive in period Customer orders are 24 for period 1, 18 for period 2, and 15 for period Stevenson - Chapter 11 74 What is the projected on hand inventory at the end of period 2? A 14 B 32 C 12 D 20 E impossible to say without additional information Subtract the week forecast (20) from the week projected ending on-hand (32) AACSB: Analytic Blooms: Apply Difficulty: Medium Learning Objective: 11-04 Prepare aggregate plans and compute their costs Stevenson - Chapter 11 #74 Topic Area: The Master Scheduling Process 75 What quantity is available for commitment to new customers prior to the receipt of the MPS quantity in week 3? A 14 B 32 C 12 D 20 E impossible to say without additional information There are 56 units in beginning inventory, and booked orders for 42 units until the next MPS quantity receipt AACSB: Analytic Blooms: Apply Difficulty: Medium Learning Objective: 11-04 Prepare aggregate plans and compute their costs Stevenson - Chapter 11 #75 Topic Area: The Master Scheduling Process 76 When the opportunity cost of lost revenue is relatively high, _ become(s) relatively more attractive A Layoffs B Backorders C Excess capacity D Disaggregation E Both B and C The excess capacity costs diminish in relation to the potential lost revenue AACSB: Reflective Thinking Blooms: Understand Difficulty: Medium Learning Objective: 11-02 Identify the variables decision makers have to work with in aggregate planning and some of the possible strategies they can use Stevenson - Chapter 11 #76 Topic Area: Basic Strategies for Meeting Uneven Demand 77 The more demand is, the more the aggregate plan will tend to reflect the strategy A Stable; Level B Aggregated; Outsourcing C Variable; Chase D Complex; Uncommitted E Both A and C These pure strategies reflect particular underlying demand patterns AACSB: Reflective Thinking Blooms: Understand Difficulty: Medium Learning Objective: 11-02 Identify the variables decision makers have to work with in aggregate planning and some of the possible strategies they can use Stevenson - Chapter 11 #77 Topic Area: Basic Strategies for Meeting Uneven Demand 78 In a service setting, the aggregate plan results in a time-phased projection of requirements A customer B staff C inventory D subcontracting E outsourcing Staff requirements are the focus of aggregate planning in services AACSB: Reflective Thinking Blooms: Remember Difficulty: Medium Learning Objective: 11-01 Explain what aggregate planning is and how it is useful Stevenson - Chapter 11 #78 Topic Area: Aggregate Planning in Services 79 Which of the following differs between aggregate planning in services and aggregate planning in manufacturing? A uncertainty in demand B costs of storing inventory C the perishability of capacity D cost of overtime E cost of hiring Capacity is inherently perishable in services AACSB: Reflective Thinking Blooms: Understand Difficulty: Medium Learning Objective: 11-01 Explain what aggregate planning is and how it is useful Stevenson - Chapter 11 #79 Topic Area: Aggregate Planning in Services 80 At XYZ Corp., the aggregate planning unit reflects the fact that 50% of its output is product version A, 30% is version B, and 20% is version C Suppose that over the coming year forecasted total demand (in planning units) is for 10,400 units Once the production plan is disaggregated, what will the weekly forecast for version A be (assume 52 weeks per year)? A 1000 B 200 C 400 D 100 E 50 Divide 5,200 (annual demand) by 52 weeks AACSB: Analytic Blooms: Apply Difficulty: Medium Learning Objective: 11-05 Describe the master scheduling process and explain its importance Stevenson - Chapter 11 #80 Topic Area: Disaggregating the Aggregate Plan 81 A master production schedule quantity of 300 units will arrive in week Weekly demand over weeks through 10 is forecasted at 50 units At present, orders have been booked in various quantities in weeks 1, 2, and What is the available to promise for week 6? A 50 B C 300 D 100 E Cannot be determined without projected on-hand information No orders are booked after week 4, so all 300 units arriving in week are available-to-promise in week AACSB: Analytic Blooms: Apply Difficulty: Medium Learning Objective: 11-05 Describe the master scheduling process and explain its importance Stevenson - Chapter 11 #81 Topic Area: Introduction 82 Which of the following steps is necessary to ensure that a master schedule is valid? A worker scheduling B order promising C inventory counting D order booking E rough-cut capacity planning Rough-cut capacity planning insures that the master schedule is reasonably feasible AACSB: Reflective Thinking Blooms: Remember Difficulty: Medium Learning Objective: 11-05 Describe the master scheduling process and explain its importance Stevenson - Chapter 11 #82 Topic Area: Introduction ch11 Summary Category # of Questio ns AACSB: Analytic 21 AACSB: Reflective Thinking 61 Blooms: Apply 21 Blooms: Remember 53 Blooms: Understand Difficulty: Easy 17 Difficulty: Hard 13 Difficulty: Medium 52 Learning Objective: 11-01 Explain what aggregate planning is and how it is useful 18 Learning Objective: 11-02 Identify the variables decision makers have to work with in aggregate planning and some of the possible strategies they can use 24 Learning Objective: 11-03 Describe some of the graphical and quantitative techniques planners use Learning Objective: 11-04 Prepare aggregate plans and compute their costs 18 Learning Objective: 11-05 Describe the master scheduling process and explain its importance 14 Stevenson - Chapter 11 86 Topic Area: Aggregate Planning in Services Topic Area: Basic Strategies for Meeting Uneven Demand 23 Topic Area: Disaggregating the Aggregate Plan Topic Area: Introduction 26 Topic Area: Techniques for Aggregate Planning 11 Topic Area: The Master Scheduling Process 11 ... scheduling B order promising C inventory counting D order booking E rough-cut capacity planning ch11 Key Aggregate planning is intermediate-range capacity planning that typically covers a time... Difficulty: Medium Learning Objective: 11-01 Explain what aggregate planning is and how it is useful Stevenson - Chapter 11 #1 Topic Area: Introduction The goal of aggregate planning is to achieve... Difficulty: Easy Learning Objective: 11-01 Explain what aggregate planning is and how it is useful Stevenson - Chapter 11 #2 Topic Area: Introduction Aggregate planners are concerned with the quality