Ch 14

A hotel manager must decide how many rooms to overbook. Room rates are $125 per night and each room costs $45 to maintain. A bumped customer is sent to another hotel at a cost of $75. Given the distribution of no-shows below, how many rooms should the manager overbook? No-Shows Probability 7 0.15 8 0.20 9 0.15 10 0.15 11 0.10 12 0.10 13 0.05 14 0.05 15 0.05 a. Overbook 9 rooms b. Overbook 10 rooms c. Overbook 11 rooms d. Overbook 12 rooms

B

The difference between planned production and customer orders is known as a. the master production schedule. b. available-to-promise. c. capable-to-promise. d. the disaggregate plan.

B

The following information relates to a company's aggregate production planning activities: Quarter Demand Forecast 1 25,000 2 50,000 3 35,000 4 60,000 Beginning Workforce = 50 workers Production per Employee = 250 units per quarter Hiring Cost = $1000 per worker Firing Cost = $1,500 per worker Inventory Carrying Cost = $15 per unit per quarter If a level production strategy is used then the number of workers required is a. 125 b. 170 c. 250 d. 325

B

The following information relates to a company's aggregate production planning activities: Quarter Demand Forecast 1 25,000 2 50,000 3 35,000 4 60,000 Beginning Workforce = 50 workers Production per Employee = 250 units per quarter Hiring Cost = $1000 per worker Firing Cost = $1,500 per worker Inventory Carrying Cost = $15 per unit per quarter If a level production strategy is used then the required output per quarter is a. 60,000 units b. 42,500 units c. 35,000 units d. 25,000 units

B

A hot dog vendor must decide on Monday how many hot dogs to have available for the coming Saturday's football game. Each hot dog costs the vendor $3.00 and is sold for $5.00. After the game any unsold hot dogs are discounted and sold to the university cafeteria for $1.75. The vendor believes that the demand for hot dogs follows the probability distribution shown below: Demand for Hot Dogs Probability 1000 0.30 1500 0.20 2000 0.30 2500 0.15 3000 0.05 The vendor's cost of underestimating demand, Cu, is a. $3.00 b. $1.75 c. $2.00 d. $3.25

C

All of the following are inputs to the aggregate production planning process except a. demand forecasts. b. financial constraints. c. sales plans. d. capacity constraints.

C

The following information relates to a company's aggregate production planning activities: Quarter Demand Forecast 1 25,000 2 50,000 3 35,000 4 60,000 Beginning Workforce = 50 workers Production per Employee = 250 units per quarter Hiring Cost = $1000 per worker Firing Cost = $1,500 per worker Inventory Carrying Cost = $15 per unit per quarter If a chase demand strategy is used then the number of workers fired at the start of quarter 3 is a. 0 b. 50 c. 60 d. 100

C

The following information relates to a company's aggregate production planning activities: Quarter Demand Forecast 1 37,500 2 45,000 3 25,000 4 62,500 Beginning Workforce = 125 workers Production per Employee = 500 units per quarter Hiring Cost = $750 per worker Firing Cost = $1,500 per worker Inventory Carrying Cost = $10 per unit per quarter If a level production strategy is used the number of workers required each quarter is a. 50 b. 75 c. 85 d. 125

C

A bagel company bakes a specialty bagel that it sells by the dozen every day. These specialty bagels can only be baked early in the morning before the store opens for business. The company estimates that the daily demand (in dozens) for its specialty bagel is distributed as follows: Demand PROB. (dozens) 1 .1 2 .2 3 .15 4 .25 5 .30 Specialty bagels are sold by the dozen only at a cost of $9.00 per dozen. The cost to make one bagel is $0.50. Leftover specialty bagels are sold by the dozen the next day for a 50% discount. The bagel company's cost of overestimating demand, Co, is a. $1.50 b. $3.00 c. $4.50 d. $6.00

A

A company is developing a linear programming model for its aggregate production plan. If It = units in inventory at the end of period t, Pt = units produced in period t, and Dt = demand in period t, then the company's demand constraint to ensure that demand is met in quarter 3 is a. D3 = I2 - I3 + P3 b. D3 = I3 + P3 c. D3 = I3 - I2 + P3 d. D3 = I2 - I3 + P2

A

An optimizing technique originally developed for aggregate planning in the paint factory is the a. linear decision rule. b. search decision rule. c. management coefficients model. d. transportation technique.

A

In capacity planning, the feasibility of the sales and operations production plan is verified by a a. resource requirements plan. b. rough-cut capacity plan. c. capacity requirements plan. d. master production schedule.

A

The following information relates to a company's aggregate production planning activities: Quarter Demand Forecast 1 25,000 2 50,000 3 35,000 4 60,000 Beginning Workforce = 50 workers Production per Employee = 250 units per quarter Hiring Cost = $1000 per worker Firing Cost = $1,500 per worker Inventory Carrying Cost = $15 per unit per quarter If a chase demand strategy is used then the total hiring and firing cost of the plan is a. $340,000 b. $250,000 c. $125,000 d. $90,000

A

The following information relates to a company's aggregate production planning activities: Quarter Demand Forecast 1 37,500 2 45,000 3 25,000 4 62,500 Beginning Workforce = 125 workers Production per Employee = 500 units per quarter Hiring Cost = $750 per worker Firing Cost = $1,500 per worker Inventory Carrying Cost = $10 per unit per quarter If a level production strategy is used the number of units to produce each quarter is a. 42,500 b. 85,000 c. 62,500 d. 37,500

A

The primary cost associated with the level production strategy is the cost of a. holding inventory. b. hiring and firing workers. c. overtime. d. outsourcing (subcontracting)

A

The process of breaking an aggregate plan into more detailed plans is referred to as a. collaborative planning. b. hierarchical planning. c. disaggregation. d. rough-cut planning.

A

A bagel company bakes a specialty bagel that it sells by the dozen every day. These specialty bagels can only be baked early in the morning before the store opens for business. The company estimates that the daily demand (in dozens) for its specialty bagel is distributed as follows: Demand Probability 1 .10 2 .20 3 .15 4 .24 5 .30 Specialty bagels are sold by the dozen only at a cost of $9.00 per dozen. The cost to make one bagel is $0.50. Leftover specialty bagels are sold by the dozen the next day for a 50% discount. The optimal number of specialty bagels that should be baked tomorrow (in dozens) is a. 5 dozen b. 4 dozen c. 3 dozen d. 2 dozen

B

A company is developing a linear programming model for its aggregate production plan. If Wt = workforce size for period t, Ht = number of workers hired for period t, and Ft = number of workers fired for period t, then the company's workforce constraint for period 4 is a. W4 = W3 - H4 + F4 b. W4 = W3 + H4 - F4 c. W4 = W3 + H3 - F3 d. W4 = W3 + H4

B

Adjusting available capacity by hiring and firing workers to match demand is an example of a(n) ________ strategy. a. level production b. chase demand c. mixed production. d. optimal production.

B

Given the information below, the number of available-to-promise units in period 4 is Period On Hand = 200 1 2 3 4 5 6 Forecast 300 250 300 300 200 200 Customer Orders 250 200 250 200 150 250 Master Prod. SERV 500 700 Available-to-Promise a. 500 b. 100 c. 200 d. 350

B

The following information relates to a company's aggregate production planning activities: Quarter Demand Forecast 1 37,500 2 45,000 3 25,000 4 62,500 Beginning Workforce = 125 workers Production per Employee = 500 units per quarter Hiring Cost = $750 per worker Firing Cost = $1,500 per worker Inventory Carrying Cost = $10 per unit per quarter If a chase demand strategy is used the number of workers fired in quarter 3 is a. 0 b. 40 c. 50 d. 75

B

The following information relates to a company's aggregate production planning activities: Quarter Demand Forecast 1 75,000 2 100,000 3 75,000 4 125,000 Beginning Workforce = 35 workers Production per Employee = 1,250 units per quarter Hiring Cost = $500 per worker Firing Cost = $1,000 per worker Inventory Carrying Cost = $20 per unit per quarter If a chase demand strategy is used then the number of workers hired at the start of quarter 2 is a. 10 b. 20 c. 35 d. 80

B

The following information relates to a company's aggregate production planning activities: Quarter Demand Forecast 1 75,000 2 100,000 3 75,000 4 125,000 Beginning Workforce = 35 workers Production per Employee = 1,250 units per quarter Hiring Cost = $500 per worker Firing Cost = $1,000 per worker Inventory Carrying Cost = $20 per unit per quarter If a level production strategy is used then the number of workers required for the plan is a. 35 b. 75 c. 100 d. 125

B

The search decision rule (SDR) is an algorithm that a. solves a set of four quadratic equations. b. finds the minimum cost for combinations of different workforce levels and production rates. c. uses regression analysis to improve the consistency of production planning decisions d. requires that a linear cost function be used.

B

A company is developing a linear programming model for its aggregate production plan. Each worker can produce 500 units per quarter. If Wt = workforce size in period t and Pt = number of units produced in period t, then the production constraint for period 3 is a. W3 = 500P3 b. P3 = W3 - 500 c. P3 = 500W3 d. P3 = W3/500

C

A company is developing a linear programming model for its aggregate production plan. If Wt = workforce size for period t, Ht = number of workers hired for period t, and Ft = number of workers fired for period t, then the company's workforce constraint for period 2 is a. W2 = W1 + F2 - H2 b. W2 = H2 - F2 c. W2 = W1 + H2 - F2 d. W2 = H2 - F2 - W1

C

A hot dog vendor must decide on Monday how many hot dogs to have available for the coming Saturday's football game. Each hot dog costs the vendor $3.00 and is sold for $5.00. After the game any unsold hot dogs are discounted and sold to the university cafeteria for $1.75. The vendor believes that the demand for hot dogs follows the probability distribution shown below: Demand for Hot Dogs Probability 1000 0.30 1500 0.20 2000 0.30 2500 0.15 3000 0.05 The optimal number of hot dogs the vendor should order for next Saturday's game is a. 1000 b. 1500 c. 2000 d. 3000

C

The following information relates to a company's aggregate production planning activities: Quarter Demand Forecast 1 25,000 2 50,000 3 35,000 4 60,000 Beginning Workforce = 50 workers Production per Employee = 250 units per quarter Hiring Cost = $1000 per worker Firing Cost = $1,500 per worker Inventory Carrying Cost = $15 per unit per quarter If a chase demand strategy is used then the number of workers hired at the start of quarter 2 is a. 0 b. 50 c. 100 d. 200

C

The following information relates to a company's aggregate production planning activities: Quarter Demand Forecast 1 37,500 2 45,000 3 25,000 4 62,500 Beginning Workforce = 125 workers Production per Employee = 500 units per quarter Hiring Cost = $750 per worker Firing Cost = $1,500 per worker Inventory Carrying Cost = $10 per unit per quarter If a chase demand strategy is used the total hiring and firing costs for the production plan is a. $67,500 b. $135,000 c. $202,500 d. $337,500

C

The following information relates to a company's aggregate production planning activities: Quarter Demand Forecast 1 37,500 2 45,000 3 25,000 4 62,500 Beginning Workforce = 125 workers Production per Employee = 500 units per quarter Hiring Cost = $750 per worker Firing Cost = $1,500 per worker Inventory Carrying Cost = $10 per unit per quarter If a chase demand strategy is used then the number of workers hired in quarter 4 is a. 0 b. 15 c. 75 d. 125

C

The following information relates to a company's aggregate production planning activities: Quarter Demand Forecast 1 37,500 2 45,000 3 25,000 4 62,500 Beginning Workforce = 125 workers Production per Employee = 500 units per quarter Hiring Cost = $750 per worker Firing Cost = $1,500 per worker Inventory Carrying Cost = $10 per unit per quarter If a level production strategy is used the total cost of the production plan (hiring cost, firing cost, and inventory cost) is a. $60,000 b. $275,000 c. $335,000 d. $610,000

C

The following information relates to a company's aggregate production planning activities: Quarter Demand Forecast 1 75,000 2 100,000 3 75,000 4 125,000 Beginning Workforce = 35 workers Production per Employee = 1,250 units per quarter Hiring Cost = $500 per worker Firing Cost = $1,000 per worker Inventory Carrying Cost = $20 per unit per quarter If a chase demand strategy is used then the total firing cost for the plan is a. $10,000 b. $15,000 c. $20,000 d. $25,000

C

The following information relates to a company's aggregate production planning activities: Quarter Demand Forecast 1 75,000 2 100,000 3 75,000 4 125,000 Beginning Workforce = 35 workers Production per Employee = 1,250 units per quarter Hiring Cost = $500 per worker Firing Cost = $1,000 per worker Inventory Carrying Cost = $20 per unit per quarter If a level production strategy is used then the required quarterly output is a. 75,000 b. 87,350 c. 93,750 d. 125,000

C

Which of the following is not a characteristic of aggregate planning for services? a. labor is usually the most constraining resource for services b. service capacity must be provided at the appropriate place and time c. demand for services is easy to predict d. capacity for services is difficult to predict

C

A bagel company bakes a specialty bagel that it sells by the dozen every day. These specialty bagels can only be baked early in the morning before the store opens for business. The company estimates that the daily demand (in dozens) for its specialty bagel is distributed as follows: Demand Probability 1 .10 2 .20 3 .15 4 .25 5 .30 Specialty bagels are sold by the dozen only at a cost of $9.00 per dozen. The cost to bake each bagel is $0.50. Leftover specialty bagels are sold by the dozen the next day for a 50% discount. The bagel company's cost of underestimating demand, Cu, is a. $9.00 b. $6.00 c. $4.50 d. $3.00

D

A company is developing a linear programming model for its aggregate production plan. If It = units in inventory at the end of period t, Pt = units produced in period t, and Dt = demand in period t, then the company's demand constraint to ensure that demand is met in quarter 2 is a. D2 = I2 - I1 + P2 b. D2 = I1 + P2 c. D2 = I2 + I1 + P2 d. D2 = I1 + P2 - I2

D

A hot dog vendor must decide on Monday how many hot dogs to have available for the coming Saturday's football game. Each hot dog costs the vendor $3.00 and is sold for $5.00. After the game any unsold hot dogs are discounted and sold to the university cafeteria for $1.75. The vendor believes that the demand for hot dogs follows the probability distribution shown below: Demand for Hot Dogs Probability 1000 0.30 1500 0.20 2000 0.30 2500 0.15 3000 0.05 The vendor's cost of overestimating demand, Co, is a. $5.00 b. $3.00 c. $1.75 d. $1.25

D

Given the information below, the number of available-to-promise units in period 2 is Period On Hand = 100 1 2 3 4 5 6 Forecast 200 250 200 300 200 200 Cust Orders 150 125 100 250 150 250 Master 400 400 400 Available-to-Promise a. 400 b. 150 c. 50 d. 0

D

Problems associated with using a part-time workers strategy for adjusting capacity include all of the following except a. high turnover. b. accelerated training requirements c. scheduling difficulties d. high retirement costs

D

Strategies for proactive demand management would not include a. shifting demand into other time periods b. offering products or services with counter cyclical demand patterns c. partnering with suppliers to reduce information distortion along the supply chain d. using subcontracting to meet unexpected high demand levels

D

The following information relates to a company's aggregate production planning activities: Quarter Demand Forecast 1 25,000 2 50,000 3 35,000 4 60,000 Beginning Workforce = 50 workers Production per Employee = 250 units per quarter Hiring Cost = $1000 per worker Firing Cost = $1,500 per worker Inventory Carrying Cost = $15 per unit per quarter If a level production strategy is used then the inventory at the end of quarter 3 is a. 0 b. 5,000 c. 10,000 d. 17,500

D

The following information relates to a company's aggregate production planning activities: Quarter Demand Forecast 1 25,000 2 50,000 3 35,000 4 60,000 Beginning Workforce = 50 workers Production per Employee = 250 units per quarter Hiring Cost = $1000 per worker Firing Cost = $1,500 per worker Inventory Carrying Cost = $15 per unit per quarter If a level production strategy is used then the total cost of the plan (hiring cost, firing cost and inventory carrying cost) is a. $120,000 b. $377,500 c. $675,000 d. $795,000

D

The following information relates to a company's aggregate production planning activities: Quarter Demand Forecast 1 37,500 2 45,000 3 25,000 4 62,500 Beginning Workforce = 125 workers Production per Employee = 500 units per quarter Hiring Cost = $750 per worker Firing Cost = $1,500 per worker Inventory Carrying Cost = $10 per unit per quarter If a level production strategy is used the number of units in inventory at the end of quarter 3 is a. 0 b. 2,500 c. 5,000 d. 20,000

D

The following information relates to a company's aggregate production planning activities: Quarter Demand Forecast 1 75,000 2 100,000 3 75,000 4 125,000 Beginning Workforce = 35 workers Production per Employee = 1,250 units per quarter Hiring Cost = $500 per worker Firing Cost = $1,000 per worker Inventory Carrying Cost = $20 per unit per quarter If a level production strategy is used then the cost of the level production plan (inventory costs plus hiring and firing costs) is a. $20,000 b. $645,000 c. $1,250,000 d. $1,270,000

D

The following information relates to a company's aggregate production planning activities: Quarter Demand Forecast 1 75,000 2 100,000 3 75,000 4 125,000 Beginning Workforce = 35 workers Production per Employee = 1,250 units per quarter Hiring Cost = $500 per worker Firing Cost = $1,000 per worker Inventory Carrying Cost = $20 per unit per quarter If a level production strategy is used then the inventory at the end of quarter 3 is a. 18,750 b. 12,500 c. 25,650 d. 31,250 units

D

The most effective aggregate planning strategy depends on a. the demand distribution b. the competitive position c. the firm's cost structure d. all of the above

D

Yield management can be used to address all of the following problems except a. overbooking. b. portioning demand into fare classes. c. single order quantities. d. backorders.

D