OPM 101 CH 18, 11

Rough-cut capacity planning is the validation of a ________master schedule. It ensures the _________of a master schedule.

-tentative, draft, or proposed -feasibility or viability

Click and drag on elements in order Place the following steps for aggregate planning in the correct order. Instructions Choice 1 of 6. Determine all relevant costs. toggle button Determine all relevant costs. Choice 2 of 6. Determine demand for each period. toggle button Determine demand for each period. Choice 3 of 6. Select the best plan. toggle button Select the best plan. Choice 4 of 6. Identify relevant company/departmental policies. toggle button Identify relevant company/departmental policies. Choice 5 of 6. Develop alternative plans and compute the cost for each. toggle button Develop alternative plans and compute the cost for each. Choice 6 of 6. Determine capacities for each period. toggle button Determine capacities for each period.

1. Determine demand for each period. 2. Determine capacities for each period. 3. Identify relevant company/departmental policies. 4. Determine all relevant costs. 5. Develop alternative plans and compute the cost for each. 6. Select the best plan.

What is a channel in queuing theory

A synonym for "server"

Which of the following statements about aggregate planning is not true? Multiple choice question. While the overall cost of the plan is important, it is not the only consideration. It requires good information on demand, available resources, and cost structures. Aggregate plans are periodically updated, even though they cover the next 12 to 18 months. Aggregate planners try to ensure that capacity always exceeds demand.

Aggregate planners try to ensure that capacity always exceeds demand.

______ takes a big-picture approach to planning, focusing on groups of similar products and services rather than on individual items. Multiple choice question. Tactical planning Aggregate planning Strategic planning Operational planning

Aggregate planning

Which of the following statements about intermediate and aggregate planning is/are true? Multiple select question. Aggregate planning is based on a master schedule. Aggregate planning decisions define the framework in which operating decisions will be made. Aggregate planning is independent of other strategic business decisions. It is included in business plans along with long-term planning.

Aggregate planning decisions define the framework in which operating decisions will be made. It is included in business plans along with long-term planning.

Which of the following is not a way to deal with variations in demand? Multiple choice question. Avoid delayed differentiation. Wait as long as possible before committing to a plan. Maintain excess capacity. Maintain a degree of flexibility.

Avoid delayed differentiation.

Which of the following statements about demand options for dealing with demand-supply mismatches are true? Multiple select question. The "new demand" option refers to using marketing and other means to increase demand for existing products. Back orders allow fulfillment to be shifted to other periods. Many organizations struggle to balance capacity with uneven demand.

Back orders allow fulfillment to be shifted to other periods. Many organizations struggle to balance capacity with uneven demand.

Which of the following data sources is an input to the master schedule? Multiple choice question. Unit cost Status of open shop orders Beginning inventory Bill of materials

Beginning inventory

Which of the following are inputs to the master schedule? Multiple select question. Projected inventory. Beginning inventory Customer orders Forecasts for each period Production requirements Hiring costs

Beginning inventory Customer orders Forecasts for each period

In what ways do waiting lines cost businesses?

Business must provide adequate space for customers to wait. Disruption to operations can occur if lines are too long.

Which statement about aggregate planning in services is correct? Multiple choice question. Flexibility of labor is lower for services than for goods. Capacity availability can be difficult to predict. Inventory can be built ahead to manage peak demand.

Capacity availability can be difficult to predict.

The queuing model that is chosen is based upon what?

Characteristics of the capacity and demand

Which are the three important factors in choosing a strategy for meeting uneven demand? Multiple choice question. Company policy, flexibility, costs Company policy, flexibility, revenues Company profile, forecast accuracy, revenues Company profile, forecast accuracy, costs

Company policy, flexibility, costs

Which of the following firms likely use yield management. Multiple select question. Cruise lines Restaurants Fast food facilities Resorts Hotels Airlines Department stores

Cruise lines Restaurants Resorts Hotels Airlines

What are some negative customer-side implications of waiting lines

Customers may leave the line, potentially resulting in loss of goodwill. Customer dissatisfaction may occur from waiting too long.

What is one difference between aggregate planning for goods and for services? Multiple choice question. Demand for service can be difficult to predict. Inventory levels for goods are more difficult to manage. Scheduling labor is less complicated for services.

Demand for service can be difficult to predict.

True or false: A service operation manager will typically want to achieve 100% system utilization.

False

What is the main difference between a finite and an infinite source population in queuing theory

Finite is a relatively small group potentially needing service, while infinite source greatly exceeds the number of servers.

Which of the following are the inputs for master scheduling. Multiple select question. Forecasts for each period of the schedule The beginning inventory Customer orders The ending inventory

Forecasts for each period of the schedule The beginning inventory Customer orders

Which are the correct descriptions of the three time fence phases? Multiple choice question. Cold, warm, hot Set in stone, mushy, liquid Frozen, slushy, liquid Frozen, mushy, liquid Set in stone, slushy, liquid Frozen, slushy, gaseous

Frozen, slushy, liquid

Which of the following statements about aggregate planning is not true? Multiple choice question. If capacity and demand are approximately equal for the planning period, no additional work is required. It requires good information on demand, available resources, and cost structures. While the overall cost of the plan is important, it is not the only consideration. Aggregate plans are periodically updated, even though they cover the next 12 to 18 months.

If capacity and demand are approximately equal for the planning period, no additional work is required.

Theoretically, in an infinite-source queuing model how long is the maximum line length with 100% probability?

Infinitely long

Which of the following approaches do managers use to handle customer-perceived waiting time?

Inform customers of estimated waiting times (restaurants, phone centers, etc.) to reduce anxiety. Use distractions like video screens or have customer fill out forms.

Which of the following is the correct formula for projected on-hand inventory? Multiple choice question. Inventory from previous week + current week's requirement Current week's requirement - inventory from previous week Inventory from previous week - current week's requirement

Inventory from previous week - current week's requirement

Which of the following statements about the master schedule are true? Multiple select question. It allows marketing to make valid delivery commitments. It is used at the operational level, not by higher-level management. Because it is derived from the aggregate plan, the numbers in the master plan always match those in the aggregate plan. It is different from the aggregate plan.

It allows marketing to make valid delivery commitments. It is different from the aggregate plan.

Which of the following is/are reasons companies engage in aggregate planning? Multiple select question. The finance and marketing departments require aggregate planning. It can help synchronize flow through the supply chain. It takes time to implement plans. Accurately forecasting timing is impossible.

It can help synchronize flow through the supply chain. It takes time to implement plans. Accurately forecasting timing is impossible.

Which of the following statements about the master schedule are false? Multiple select question. It allows marketing to make valid delivery commitments to customers. It is used at the operational level, not by higher-level management. It is different from the aggregate plan. Because it is derived from the aggregate plan, the numbers in the master plan match those in the aggregate plan.

It is used at the operational level, not by higher-level management. Because it is derived from the aggregate plan, the numbers in the master plan match those in the aggregate plan.

Which of the following statements about intermediate planning is true? Multiple choice question. It involves scheduling jobs, workers, and equipment. It relates to product and service selection, as well as facility and equipment decisions. It relates to general levels of employment, output, and inventories.

It relates to general levels of employment, output, and inventories.

According to Little's law, for a stable system, the average number of customers in line or in the system is equal to the average customer arrival rate multiplied by the average time in line or in the system. What are the implications for the analysis of waiting lines?

It requires no assumptions about which customers arrive or are serviced The relationships are independent of any probability distribution It requires no assumption regarding the order in which they are served

Which of the following data sources is not an input to aggregate planning? Multiple choice question. Policies for changing capacity Lead times for purchased parts and components Forecasted demand Resources available over the planning period

Lead times for purchased parts and components

What is included in customer waiting costs?

Loss of business due to customers refusing to wait Salaries paid to employees who are waiting Cost of space provided for waiting lines

Using Little's Law, the average number of customers in the system is

Ls = Lq + r

According to Little's Law, for a stable system, identify the correct equation to determine the average time customers are waiting in the system.

Ls = λWs

Which of the following are possible demand options for dealing with demand-capacity mismatches? Multiple select question. New demand Part time Back orders Overtime

New demand Back orders

What are the four main characteristics of waiting lines which determine the queuing model?

Order of service Number of channels Arrival/service patterns Population source

Which of the following are possible supply options for dealing with demand-capacity mismatches? Multiple select question. Part-time workers Promotion New products Pricing Inventories Overtime

Part-time workers Inventories Overtime

What is the theoretical distribution which describes the arrival or service rate?

Poisson distribution

Which of the following are possible demand options for dealing with demand-capacity mismatches? Multiple select question. Overtime Inventories. Promotion Pricing

Promotion Pricing

What are the assumptions for using the single server, exponential service time queuing model

Queue discipline is first come, first served Service time can be modeled by negative exponential distribution Rates are Poisson distributed

Which of the following statements about queuing theory are correct? (Select all that apply.)

Queuing theory is directly applicable to many service operations. A.K. Erlang developed queuing theory while working on automatic dialing equipment.

What impact will increasing the standardization have on the service time

Reduce variability

Which of these situations lends itself best to part-time workers? Multiple choice question. Unionized workplaces where workers pay union dues Highly skilled work requiring an advanced degree Seasonal work requiring low-to-moderate job skills

Seasonal work requiring low-to-moderate job skills

Which of the following are differences between manufacturing and service aggregate planning? Multiple select question. Demand for both manufacturing and services is equally variable. Services cannot be inventoried. It can be more difficult to measure or define capacity availability in services. Employees in services are often able to handle a wider variety of tasks, making labor a little more flexible.

Services cannot be inventoried. It can be more difficult to measure or define capacity availability in services. Employees in services are often able to handle a wider variety of tasks, making labor a little more flexible.

Why would there be waiting in an underloaded system?

Services cannot be stored. Customers arrive randomly.

Which of the following statements about supply options for dealing with demand-supply mismatches are true? Multiple select question. Subcontracting allows less control over output and may lead to higher costs and quality problems. The cost of inventory includes more than simply the storage cost for the items. Overtime is advantageous because it can be implemented quickly, with almost no additional overhead. Hiring new workers is always a good option when additional capacity is required.

Subcontracting allows less control over output and may lead to higher costs and quality problems. The cost of inventory includes more than simply the storage cost for the items. Overtime is advantageous because it can be implemented quickly, with almost no additional overhead.

There are four infinite-source queuing models covered in this chapter. What assumptions do they all have in common? (Select all correct answers.)

System is operating under steady-state conditions. Arrival rates can be described by a Poisson distribution

Which of the following statements about disaggregating the aggregate plan is not true? Multiple choice question. The aggregate plan must be broken down by units. In order to implement a production plan, the aggregate plan must be disaggregated. The master production schedule has information that is important to marketing. The master production schedule covers the next six to eight weeks.

The aggregate plan must be broken down by units.

The capacity of a service system in queuing theory is a function of what

The capacity of a service system in queuing theory is a function of what?

Which of the following statements about demand options for dealing with demand-supply mismatches are true? Multiple select question. The degree of price elasticity affects how well pricing strategies will work. When pricing is increased too much, a company faces the opportunity cost of lost profit due to insufficient capacity Promotions could exacerbate the demand-capacity mismatch.

The degree of price elasticity affects how well pricing strategies will work. Promotions could exacerbate the demand-capacity mismatch.

Which of the following statements about time fences is true? Multiple choice question. The frozen phase allows anyone to make changes to the schedule. Order promise dates in the liquid phase are relatively stable. Time fences provide useful guidelines for schedule changes. The further out a proposed change is, the easier it is to make it.

The further out a proposed change is, the easier it is to make it.

What is meant by the term queue discipline

The rule-based order in which customers are processed in the system

For the single server, exponential service time queuing model, what statement is correct about length of queue?

There is no limit on length of queue.

In the context of supply chain partners, which of the following should operations managers do during the aggregate planning stage? Multiple choice question. They need not take supply chain partners into account at this stage. They should consult supply chain partners irrespective of whether any changes are planned. They should discuss quality concerns with supply chain partners. They should consult supply chain partners only if new goods or services are involved.

They should consult supply chain partners irrespective of whether any changes are planned.

Which of the following is a task of aggregate planners? Multiple choice question. To ensure expected demand is less than the projected capacity in the planning horizon. To create policies about demand and supply. To ensure projected capacity is less than the expected demand in the planning horizon. To achieve rough equality of demand and capacity over the entire planning horizon.

To achieve rough equality of demand and capacity over the entire planning horizon.

Why would a service operations manager need to calculate maximum line length for his or her system?

To know how much space to provide for waiting lines

Why is it is essential to take supply chain capabilities into account when doing aggregate planning? Multiple select question. To make sure there are no quality issues To make sure there are no quantity issues To make sure there are no transportation issues To make sure there are no timing issues

To make sure there are no quantity issues To make sure there are no timing issues

What is the goal of waiting line management

To minimize total costs of providing capacity and customer waiting costs.

Which of the following are outputs of the aggregate planning process? Multiple select question. Demand for level B inventory items Projected levels of capital needs Demand for level C inventory items Total cost of a plan Projected levels of employment Projected levels of inventory Projected levels of subcontracting Projected levels of output

Total cost of a plan Projected levels of employment Projected levels of inventory Projected levels of subcontracting Projected levels of output

True or false: Waiting lines will occur even though a system is basically underloaded.

True

What does a Poisson distribution of arrivals mean in practical terms

Usually there are only a few or no customers in line.

Under what conditions are waiting lines most likely to occur?

When service times are particularly lengthy When arrivals are bunched together

When is production triggered? Multiple choice question. In the period before the projected on-hand inventory becomes negative. In the period after projected on-hand inventory becomes negative. When the projected on-hand inventory becomes negative. It depends on the inventory cost.

When the projected on-hand inventory becomes negative.

Match these infinite-source symbols with their meaning.

Wq matches Choice, The average time customers wait in line The average time customers wait in line Ws matches Choice, The average time customers spend in the system (waiting in line and service time) The average time customers spend in the system (waiting in line and service time) 1μ matches Choice, Service time Service time P0 matches Choice, The probability of zero units in the system The probability of zero units in the system Pn matches Choice, The probability of n units in the system The probability of n units in the system M matches Choice, The number of servers The number of servers Lmax matches Choice, The maximum expected number waiting in line The maximum expected number waiting in line

Using Little's Law, the average time customers are waiting in line is

Wq = Lqλ

When planners lump all models of a product together and deal with them as though they are a single product, this is called ______ planning. Multiple choice question. modular singular aggregate

aggregate

One output of the master scheduling process is the knowledge of uncommitted inventory, also known as ______. Multiple choice question. available to promise overproduction first-come, first-served

available to promise

One reason aggregate planning is so important is that it is connected to the ______ process. Multiple choice question. training budgeting promotional

budgeting

The potential source of customers who enter waiting lines for service is referred to as what?

calling population

A ______ strategy matches planned output to expected demand for each period. Multiple choice question. chase capacity level load chase demand level capacity

chase demand

One of the factors that influences an organization's selection of aggregate planning strategy, such as the circumstances in which layoffs are permitted, is _____. Multiple choice question. subcontracting flexibility company policy

company policy

When first-come, first-served is not used, how is the next customer selected for processing?

customer with highest cost

In order to put the production plan into operation, an aggregate plan must be ______. Multiple choice question. disaggregated translated summarized

disaggregated

The goal of aggregate planning is to effectively match a company's resources with __________. Multiple choice question. number of employees units of production forecasted demand

forecasted demand

Aggregate planning is capacity planning for the ______. Multiple choice question. short range long range intermediate range

intermediate range

Match the customer queuing behavior with the definition.

jockeying matches Choice, Switching lines, especially if another becomes shorter Switching lines, especially if another becomes shorter reneging matches Choice, After waiting awhile, deciding to leave the queue and exit After waiting awhile, deciding to leave the queue and exit balking matches Choice, Never getting in line and exiting the system, due to line length Never getting in line and exiting the system, due to line length

A ______ strategy meets variations in demand with some combination of inventory, overtime, part-time workers, subcontracting, and backorders. Multiple choice question. chase capacity level load level capacity chase demand

level capacity

A mathematical technique for aggregate planning that finds an optimal solution for cost minimization or profit maximization is ______. Multiple choice question. linear programming multiple regression trial-and-error method

linear programming

The result of disaggregating the aggregate plan is a ______. Multiple choice question. master production schedule material plan sales and operations plan

master production schedule

The result of disaggregating the aggregate plan is a ______. Multiple choice question. material plan sales and operations plan master production schedule

master production schedule

Techniques for aggregate planning fall into two categories: ______ techniques and _______ techniques. Multiple select question. mathematical informal trial-and-error geometrical formal

mathematical informal trial-and-error

Linear programming models obtain ________ solutions to problems involving the allocation of scare resources in terms of cost minimization or profit maximization. Multiple choice question. inflexible optimal marketing-focused

optimal

Customer _________refer to units that have already been committed to customers.

orders

The supply-side option for dealing with a demand-supply mismatch that can be used most selectively and implemented most quickly is _____. Multiple choice question. part-time overtime inventory

overtime

The models covered in this textbook assume customers are what?

patient

Studies have shown a remarkable difference between actual waiting time and _________________ waiting time.

percieved

If service time is exponential, then the service rate is what?

poisson

The five measures used to evaluate queuing systems relate to

potential customer dissatisfaction and costs

Aggregate planners are concerned with the ________ of expected demand. Multiple choice question. source and likelihood quantity and timing frequency and quality

quantity and timing

The master production schedule indicates the ______________ of specific end items for a scheduled horizon. Multiple choice question. use and demand quantity and timing material requirements

quantity and timing

A mathematical approach to the analysis of waiting lines is called what?

queuing theory

What does a negative exponential distribution of service time mean in practical terms?

service doesnt take too long

If a service manager cannot shift demand to spread out customer arrivals, then he or she should focus on processing speed or standardization to increase the

service rate

In services, the types of variety are more pervasive than in manufacturing, which makes it more difficult to establish ______. Multiple choice question. payscales for employees simple measures of capacity flexibility of labor

simple measures of capacity

True or false: Most businesses use rolling 3-, 6-, 9-, and 12-month forecasts. True false

true

Yield management uses ______ to try to maximize revenue. Multiple choice question. fixed pricing unionized workforces variable pricing mass customization

variable pricing

____________ ____________refers to the application of pricing strategies to allocate capacities among various categories of demand. (Enter only one word per blank.)

yield management

Match these infinite-source symbols with their meaning.

λ matches Choice, Customer arrival rate Customer arrival rate μ matches Choice, Service rate per server Service rate per server Lq matches Choice, The average number of customers waiting for service The average number of customers waiting for service Ls matches Choice, The average number of customers in the system (waiting and/or being served) The average number of customers in the system (waiting and/or being served) r matches Choice, The average number of customers being served The average number of customers being served ρ matches Choice, The system utilization The system utilization

What is the formula for system utilization?

ρ = λ/(Μμ)