OM Chapter 13 & 14

To use revenue management strategies, a business should have which combination of costs? ◦A) high variable and high fixed ◦B) low variable and high fixed ◦C) high variable and low fixed ◦D) low variable and low fixed ◦E) either A or B

low variable and high fixed

Which of the following is NOT an input to S&OP? ◦A) capacity decisions ◦B) supply-chain support ◦C) workforce ◦D) inventory on hand ◦E) master production schedule

master production schedule

The objective of aggregate planning is to meet forecast demand while ________ over the planning period. ◦A) minimizing cost ◦B) maximizing service level ◦C) minimizing stock out ◦D) minimizing fixed cost ◦E) all of the above

minimizing cost

Which lot-sizing technique orders the quantity needed during a predetermined time between orders? A) economic order quantity B) periodic order quantity C) lot-for-lot D) time fencing E) part-period balancing

periodic order quantity

Under which of the following do planning tasks associated with job assignments, ordering, job scheduling, and dispatching typically fall? ◦A) short-range plans ◦B) intermediate-range plans ◦C) long-range plans ◦D) mission-related planning ◦E) strategic planning

short-range plans

What is the typical time horizon for aggregate planning? ◦A) less than a month ◦B) up to 3 months ◦C) 3 to 18 months ◦D) over one year ◦E) over 5 years

3 to 18 months

Which of the following statements regarding aggregate planning in services is FALSE? ◦A) Approaches to aggregate planning differ by the type of service provided. ◦B) Some service organizations conduct aggregate planning in exactly the same way as manufacturing firms, but with demand management taking a more active role. ◦C) Aggregate planning in some service industries may be easier than in manufacturing. ◦D) Labor is the primary aggregate planning vehicle. ◦E) Level scheduling is far more common than using a chase strategy.

E) Level scheduling is far more common than using a chase strategy.

Which of the following is FALSE concerning enterprise resource planning (ERP)? A) It attempts to automate and integrate the majority of business processes. B) It shares common data and practices across the enterprise. C) It is inexpensive to implement. D) It provides and accesses information in a real-time environment. E) ERP software promises reduced transaction costs.

It is inexpensive to implement.

What directly results from disaggregation of an aggregate plan? ◦A) a master production schedule ◦B) priority scheduling ◦C) a transportation matrix ◦D) a capacity-demand matrix ◦E) detailed work schedules

a master production schedule

Dependent demand and independent demand items differ in that :◦A) for any product, all components are dependent-demand items. ◦B) the need for independent-demand items is forecast. ◦C) the need for dependent-demand items is calculated. ◦D) All of the above are true. ◦E) None of the above is true.

all of the above

Revenue (or yield) management is best described as: ◦A) a situation where management yields to labor demands. ◦B) a situation where the labor union yields to management demands. ◦C) a process designed to increase the rate of output. ◦D) allocation of scarce resources to customers at prices that will maximize revenue. ◦E) management's selection of a product mix yielding maximum profits.

allocation of scarce resources to customers at prices that will maximize revenue

Enterprise resource planning (ERP):◦ A) seldom requires software upgrade or enhancement. B) does not integrate well with functional areas other than operations. C) is inexpensive to implement. D) automates and integrates the majority of business processes. E) all of the above

automates and integrates the majority of business processes

Disaggregation: ◦A) breaks the aggregate plan into greater detail. ◦B) transforms the master production schedule into an aggregate plan. ◦C) calculates the optimal price points for yield management. ◦D) converts product schedules and labor assignments to a facility-wide plan. E) is an assumption required for the use of the transportation model in aggregate planning

breaks the aggregate plan into greater detail.

Effective use of MRP and other dependent demand models does not require which of the following? ◦A) master production schedule ◦B) bill of materials ◦C) inventory availability ◦D) lead times ◦E) cost of individual components

cost of individual components

Top executives tend to focus their attention on which type of forecasts? ◦A) short-range ◦B) intermediate-range ◦C) long-range ◦D) weather E) the forecast for the next day's absentee levels

long-range

An aggregate plan satisfies forecast demand by potentially adjusting all EXCEPT which of the following? ◦A) production rates ◦B) labor levels ◦C) inventory levels ◦D) overtime work ◦E) facility capacity

facility capacity

Under which of the following do planning tasks associated with production planning and budgeting, as well as setting employment, inventory, and subcontracting levels, typically fall? ◦A) short-range plans ◦B) intermediate-range plans ◦C) long-range plans ◦D) demand options ◦E) strategic planning

intermediate-range plans

Which of the following is NOT one of the successful techniques for controlling the cost of labor in services? ◦A) accurate scheduling of labor-hours to assure quick response to customer demand ◦B) an on-call labor resource that can be added or deleted to meet unexpected demand ◦C) little flexibility in worker hours to decrease the burden on management ◦D) flexibility of individual worker skills that permits reallocation of available labor ◦E) flexibility in rate of output or hours of work to meet changing demand

little flexibility in worker hours to decrease the burden on management

In the service sector, which of the following aggregate planning strategies might direct your client to a competitor? ◦A) using part-time workers ◦B) subcontracting ◦C) changing inventory level ◦D) varying production rates through overtime or idle time ◦E) varying work force size by hiring or layoffs

subcontracting

Which of the following aggregate planning options is NOT associated with manipulation of product or service demand? ◦A) price cuts or discounts ◦B) promotion ◦C) subcontracting ◦D) counterseasonal products or services ◦E) advertising

subcontracting

True or False? The lot-for-lot lot-sizing technique is particularly appropriate when demand is not very smooth and set up cost is small compared to holding cost.

true

True or False? The quantity required of a dependent demand item is computed from the demand for the final products in which the item is used.

true

Which of the following aggregate planning strategies is known to lower employee morale? ◦A) yield management ◦B) counterseasonal product and service mixing ◦C) changing inventory levels ◦D) varying work force size by hiring or layoffs ◦E) back ordering during high demand periods

varying work force size by hiring or layoffs