Production & Operations Management Chapter 13

Test #1 For goods-producing firms, at which of the following levels of resource planning does scheduling for individual subassemblies and resources by week and day take place? a. Aggregate planning b. Disaggregation c. Execution d. Demand forecasting

b. Disaggregation

Test #3 Which of the following is true of a level production strategy? a. Labor schedules are dynamic. b. Equipment schedules are stable. c. There are no capacity restrictions. d. The production rate keeps changing.

b. Equipment schedules are stable.

Test #13 Resource management for most service-providing organizations generally requires as many intermediate levels of planning as it does for manufacturing. a. True b. False

b. False

Test #16 The purpose of a master production schedule (MPS) is to break down the aggregate planning decisions into such details as order sizes and schedules for individual subassemblies and resources by week and day. a. True b. False

b. False

Test #7 Which of the following is true of the lot-for-lot (LFL) rule? a. It minimizes the costs associated with production setups. b. It ignores the costs associated with purchase orders. c. It maximizes the amount of inventory that needs to be carried. d. It masks the true nature of dependent demand.

b. It ignores the costs associated with purchase orders.

Test #6 Which of the following is true of a master production schedule (MPS)? a. Its primary output is a time-phased report for scheduling raw materials purchase. b. It provides a means for evaluating alternative schedules in terms of capacity requirements. c. Its input is obtained from the materials requirements planning. d. It projects the requirements for the individual parts based on the demand for the finished goods.

b. It provides a means for evaluating alternative schedules in terms of capacity requirements.

Test #2 In the context of aggregate planning options, which of the following costs are an implication of allowing stockouts? a. Inventory-carrying costs b. Lost sales and customer loyalty costs c. High labor costs and premiums d. Separation costs

b. Lost sales and customer loyalty costs

13.4 #1 Which of the following is the correct sequence for disaggregating an aggregate production plan in manufacturing firms? a. Capacity requirements planning, materials requirements planning, and master production scheduling b. Master production scheduling, materials requirements planning, and capacity requirements planning c. Master production scheduling, capacity requirements planning, and materials requirements planning d. Materials requirements planning, capacity requirements planning, and master production scheduling

b. Master production scheduling, materials requirements planning, and capacity requirements planning

Test #19 _____ is the process of using the logic of dependent demand to calculate the quantity and timing of orders for all subassemblies and components that go into and support the production of the end item(s). Select One: a. Final assembly schedule b. Materials requirements planning explosion c. Disaggregation d. Capacity requirements planning

b. Materials requirements planning explosion

13.2 #1 In the context of aggregate planning options, which of the following costs are an implication of subcontracting? a. Labor cost and productivity changes b. Overhead costs c. Idle time or lost opportunity costs d. Separation costs

b. Overhead costs

Test #9 Which of the following lot sizing rules bases the order quantity on a standard-size container or pallet load? a. The lot-for-lot rule b. The fixed-order quantity rule c. The periodic-order quantity rule d. The gross requirements rule

b. The fixed-order quantity rule

13.4 #7 Which of the following lot sizing rules is best applied when setup or order costs are low? a. The fixed-order quantity rule b. The lot-for-lot rule c. The periodic-order quantity rule d. The gross requirements rule

b. The lot-for-lot rule

Test #4 A company currently has no items in inventory. The demand for the next four months is 200, 400, 250, and 350 units. Assuming a level production rate of 350 units per month, determine the ending inventory at the end of the fourth month. a. 100 b. 150 c. 200 d. 250

c. 200

Test #12 In a garments factory, a part requires 0.10 hours of labor per unit in Work Center B and 1 hour of setup time. The planned order release (order size) for a week is 2000 units. Which of the following is the capacity requirement for a week at Work Center B? a. 101 b. 151 c. 201 d. 251

c. 201

Test #17 _____ is the process of translating aggregate plans into short-term operational plans that provide the basis for weekly and daily schedules and detailed resource requirements. Select One: a. Aggregation b. Execution c. Disaggregation d. Enterprise resource planning

c. Disaggregation

13.1 #3 Service firms frequently take their aggregate plans and disaggregate them down to the: a. master schedule level . b. material resource planning level. c. execution level. d. resource planning level.

c. execution level.

13.3 #6 In the context of disaggregation in manufacturing, lot-for-lot (LFL) is an ordering schedule that covers the _____ for each week. a. scheduled receipts b. planned order releases c. projected on-hand inventory d. gross requirements

d. gross requirements

13.5 #2 In a furniture factory, a component requires 1 hour of labor per unit in Work Center C and 2 hours of setup time. The planned order release (order size) for a week is 100 units. What is the capacity requirement for a week at Work Center C? a. 102 b. 152 c. 202 d. 252

a. 102

13.1 #4 Which of the following service organizations is likely to use a three-level resource planning similar to manufacturing firms? a. A fast-food restaurant b. A banking branch c. A credit card authorization company d. A telemarketer

a. A fast-food restaurant

Test #20 _____ is the process of determining the amount of labor and machine resources required to accomplish the tasks of production on a more detailed level, taking into account all component parts and end items in the materials plan. Select One: a. Capacity requirements planning b. Materials requirements planning explosion c. Disaggregation d. Execution

a. Capacity requirements planning

13.1 #2 Which of the following steps is performed at the time of aggregate planning? a. Specific capacity allocation b. Equipment scheduling c. Setting priorities for jobs d. Demand forecasting

a. Specific capacity allocation

13.4 #8 Which of the following lot sizing rules is best applied when the inventory-carrying costs are low? a. The fixed-order quantity rule b. The lot-for-lot rule c. The periodic-order quantity rule d. The gross requirements rule

a. The fixed-order quantity rule

Test #10 Which of the following lot sizing rules is best applied when setup or order costs are high? a. The fixed-order quantity rule b. The lot-for-lot rule c. The periodic-order quantity rule d. The gross requirements rule

a. The fixed-order quantity rule

Test #14 Enterprise resource planning (ERP) systems integrate all aspects of a business into a unified information system. a. True b. False

a. True

Test #15 In industries where jobs have low skill requirements, changing workforce levels can be cost effective. a. True b. False

a. True

13.4 #4 Manufactured parts and purchased parts are examples of _____. a. components b. parent items c. end items d. subassemblies

a. components

13.3 #2 In a chase demand strategy, _____. a. inventories are reduced b. lost sales are increased c. the production rate is stable d. the number of machines is fixed

a. inventories are reduced

Test #8 The lot-for-lot (LFL) rule is best applied when: a. inventory-carrying costs are high. b. space constraints are low. c. costs associated with purchase orders are high. d. setup costs are moderate.

a. inventory-carrying costs are high.

Test #11 Capacity requirements are computed by multiplying the number of units scheduled for production at a work center by the: a. the unit resource requirements and then adding in the setup time. b. the setup time and then subtracting the unit resource requirements. c. the setup time and then adding in the unit resource requirements. d. the unit resource requirements and then subtracting the setup time.

a. the unit resource requirements and then adding in the setup time.

13.4 #5 The time bucket used in materials requirements planning (MRP) explosion process is usually a _____. a. week b. quarter c. month d. day

a. week

13.5 #1 In an automobile factory, a component requires 0.75 hours of labor per unit in Work Center A and 1 hour of setup time. The planned order release (order size) for a week is 200 units. What is the capacity requirement for a week at Work Center A? a. 101 b. 151 c. 201 d. 251

b. 151

13.3 #1 A company currently has no items in inventory. The demand for the next four months is 200, 400, 250, and 350 units. Determine the monthly production rate if a level strategy is selected with the goal of ending the fourth month with 100 units in inventory. a. 300 units/month b. 325 units/month c. 350 units/month d. 400 units/month

b. 325 units/month

Test #5 A company currently has 100 items in inventory. The demand for the next four months is 500, 800, 900, and 300 units. Determine the monthly production rate if a level strategy is selected with the goal of ending the fourth month with 400 units in inventory. a. 500 units/month b. 700 units/month c. 900 units/month d. 1100 units/month

b. 700 units/month

13.4 #3 A master production schedule (MPS) is usually determined by the known customer orders in: a. assemble-to-stock industries. b. assemble-to-order industries. c. make-to-order industries. d. make-to-stock industries.

c. make-to-order industries.

13.2 #2 _____ are crucial for good aggregate planning and capacity utilization. a. Chase resource strategies b. Chase demand strategies c. Level production strategies d. Demand management strategies

d. Demand management strategies

Test #18 _____ refers to moving work from one workstation to another, assigning people to tasks, setting priorities for jobs, scheduling equipment, and controlling processes. Select One: a. Aggregate planning b. Disaggregation c. Capacity planning d. Execution

d. Execution

13.1 #1 Which of the following is true of aggregate plans? a. They are not driven by demand forecast. b. They are not associated with budget allocation. c. They focus on individual products. d. They focus on total capacity requirements.

d. They focus on total capacity requirements.

13.4 #2 The purpose of _____ is to translate the aggregate plan into a separate plan for individual finished goods. a. a final assembly schedule b. forecasting c. execution d. a master production schedule

d. a master production schedule