ISDS 13

A firm practices the pure chase strategy. Production last quarter was 1000. Demand over the next four quarters is estimated to be 900, 700, 1000, and 1000. Hiring cost is $20 per unit, and firing cost is $5 per unit. Over the next year, the sum of hiring and firing costs will be

$7,500

The typical time horizon for aggregate planning is

3 to 18 months

Which of the following statements about aggregate planning is true?

A pure chase strategy allows lower inventories when compared to pure level scheduling.

Which of the following statements about aggregate planning is false?

Aggregate planning produces a plan detailing which products are made and in what quantities.

Which of the following statements about aggregate planning is true?

Aggregate planning uses the adjustable part of capacity to meet production requirements.

Which of the following statements regarding aggregate planning is true?

In a mixed strategy, there are changes in both inventory and in work force and production rate over the planning horizon.

Which choice best describes level scheduling?

Inventory goes up or down to buffer the difference between demand and production.

Which of the following statements regarding Anheuser-Busch is false?

Its aggregate planning focuses entirely on facilities, ignoring employee issues.

Which of the following statements regarding aggregate planning in services is false?

Level scheduling is far more common than chase.

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

a mathematical model that will minimize costs over the intermediate planning period

Which of the following is consistent with a pure chase strategy?

a. vary production levels to meet demand requirements b. vary work force to meet demand requirements c. vary production levels and work force to meet demand requirements d. little or no use of inventory to meet demand requirements e. All of the above are consistent with a pure chase strategy.

Which of the following is not consistent with a pure level strategy?

a. varying the use of subcontracting b. variable work force levels c. little or no use of inventory to meet demand requirements d. varying production levels and/or work force to meet demand requirements e. All of the above are inconsistent with the pure level strategy.

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

aggregate planning

Yield management is most likely to be used in which one of the following situations?

an airline attempting to fill "perishable" seats at maximum revenue

Which of these is among the demand options of aggregate planning?

back-ordering during high-demand periods

Disaggregation

breaks the aggregate plan into greater detail

"Yield management" is best described as

capacity allocation to different classes of customers in order to maximize profits

Which of these is not a characteristic that makes yield management attractive?

capacity is easily changed

Which of the following aggregate planning strategies is a "capacity option"?

changing inventory levels

Which of the following aggregate planning strategies is a "demand option"?

changing price

Which of the following is not an ingredient for controlling labor cost in services?

contract overseas labor to obtain a lower wage scale

Which choice below best describes the counterseasonal demand option?

developing a mix of products that smoothes out their demands

A firm uses the pure chase strategy of aggregate planning. It produced 1000 units in the last period. Demand in the next period is estimated at 800, and demand over the next six periods (its aggregate planning horizon) is estimated to average 900 units. In following the chase strategy, the firm will

fire workers to make up the 200 unit difference

A firm's demand in the next four quarters (its aggregate planning horizon) is forecast to be 80, 50, 40, and 90 units. Last quarter, the firm produced 60 units. If it uses level scheduling, the firm will.

hire workers to permit production of 65 units per quarter for the next four quarters

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

intermediate-range plans

A firm uses graphical techniques in its aggregate planning efforts. Over the next twelve months (its intermediate period) it estimates the sum of demands to be 105,000 units. The firm has 250 production days per year. In January, which has 22 production days, demand is estimated to be 11,000 units. A graph of demand versus level production will show that

level production of 420 units per day is below the January requirement

Which of the following uses regression to incorporate historical managerial performance into aggregate planning?

management coefficients model

Which of the following is not an advantage of level scheduling?

matching production exactly with sales

Aggregate planning for service firms that provide intangible output deals mainly with

planning for human resource requirements and managing demand

Which of the following attempts to manipulate product or service demand?

price cuts

In level scheduling, what is kept uniform from month to month?

production/workforce levels

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

short-range plans

Dependence on an external source of supply is found in which of the following aggregate planning strategies?

subcontracting

In aggregate planning, which one of the following is not a basic option for altering demand?

subcontracting

Which of the following aggregate planning strategies might direct your client to a competitor?

subcontracting

Which of the following is not associated with manipulation of product or service demand?

subcontracting

Aggregate planning is capacity planning for

the intermediate range

Which of the following aggregate planning models is based primarily upon a manager's past experience?

the management coefficients model

"An optimal plan for minimizing the cost of allocating capacity to meet demand over several planning periods" best describes

the transportation method

Which of the following aggregate planning methods does not work if hiring and layoffs are possible?

the transportation method

Which of the following actions is consistent with the use of pure level strategy?

use inventory to meet demand requirements

Which of these aggregate planning strategies adjusts capacity to match demand?

using part-time workers

Which of the following aggregate planning strategies is known to lower employee morale?

varying work force size by hiring or layoffs