ISDS chapter 13

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

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

subcontracting

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

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

A hotel room that goes unrented and an airline seat that goes unsold are both examples of perishability of services inventory.

True

Aggregate planning for fast food restaurants is very similar to aggregate planning in manufacturing, but with much smaller units of time.

True

Aggregate planning in manufacturing ties organizational strategic goals to a production plan

True

Aggregate planning occurs over the medium or intermediate future of 3 to 18 months.

True

Controlling the cost of labor in services involves quick response to consumer demand, on-call labor for unexpected demand, flexibility of labor for reallocation, and flexibility of hours or rate of output of individual workers

True

Disaggregation is the process of breaking the aggregate plan into greater detail; one example of this detail is the Master Production Schedule.

True

Finding an ideal mixed strategy is complicated by the huge number of possible strategies

True

Graphical techniques are easy to understand and use, but are not well-suited for generating optimal strategies

True

High levels of efficiency at Anheuser-Busch are the result of excellence in aggregate planning and in high facility utilization.

True

In aggregate planning, one of the adjustable elements of capacity is the extent of subcontracting.

True

In aggregate planning, the amount of overtime and the size of the work force are both adjustable elements of capacity

True

Mixed strategies in aggregate planning utilize inventory, work force, and production rate changes over the planning horizon.

True

One motive for using demand-influencing aggregate planning options is to create uses for excess capacity within an organization

True

One of the four things needed for aggregate planning is a logical overall unit for measuring sales and output.

True

One question that operations managers must ask when generating an aggregate plan is what factors are likely to influence demand and by how much

True

The management coefficients model is a formal planning model built around a manager's experience and performance

True

The strategies of aggregate planning are broadly divided into demand options and capacity options.

True

The transportation method of linear programming is an optimizing approach to aggregate planning

True

The use of part-time workers as an aggregate planning option may be less costly than using fulltime workers, but may also reduce quality levels

True

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 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

The aggregate planning process usually includes expediting and dispatching of individual products

False

The level scheduling strategy allows lower inventories than the pure chase strategy

False

The only objective of aggregate planning is to minimize the cost of matching capacity to demand over the planning period

False

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

Advertising and promotion are methods of manipulating product or service supply in aggregate planning.

False

Because service firms do not inventory their output, pure chase strategy is not appropriate

False

One of the demand options of aggregate planning is to vary the workforce by hiring or firing.

False

Plans for new product development generally fall within the scope of aggregate planning

False

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

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

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 "persihable" 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

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

short-range plans

Which choice below best describes the counterseasonal demand option?

developing a mix of products that smoothes out their demands

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 statements regarding aggregate planning in services is false?

level scheduling is far more common than chase

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

panning 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

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