LSU ISDS 3115: Ch. 13 Test Bank
Aggregate planning is concerned with determining the quantity and timing of production in the A. intermediate term. B. short term. C. long term. D. next term.
A
In level scheduling, what is kept uniform from month to month? A. production/workforce levels B. inventory levels C. demand levels D. product mix E. sub-contracting levels
A
In the service sector, which of the following aggregate planning strategies might direct your client to a competitor? A. subcontracting B. varying work force size by hiring or layoffs C. changing inventory level D. using part-time workers E. varying production rates through overtime or idle time
A
Revenue management is MOST likely to be used in which one of the following situations? A. an airline attempting to fill "perishable" seats at maximum revenue B. a dental clinic that wants to fill its appointment book C. a shipping company that can change its fleet size easily D. a fast food restaurant with wide demand fluctuations during the day E. a firm with a good counterseasonal product mix
A
Successful techniques to control the cost of labor in service firms do NOT include: A. Flexibility in rate of output or hours of work to meet changing supply. B. Flexibility of individual worker skills that permits reallocation of available labor. C. Accurate scheduling of labor-hours to assure quick response to customer demand. D. An on-call labor resource that can be added or deleted to meet unexpected demand.
A
The objective of aggregate planning is to meet forecast demand while ________ over the planning period. A. minimizing cost B. minimizing fixed cost C. minimizing stock out D. maximizing service level E. all of the above
A
Which of the following aggregate planning options attempts to manipulate product or service demand? A. price cuts B. overtime/idle time C. inventories D. part-time workers E. subcontracting
A
Which of the following aggregate planning strategies is a demand option? A. changing price B. varying production levels C. using part-time workers D. changing inventory levels E. subcontracting
A
Which of the following plans are the job of the operations manager, working with other functional areas of the firm? A. intermediate plans B. short-range plans C. long-range plans D. All three: short-range, intermediate, and long-range plans.
A
Which of the following statements is NOT true regarding the planning process? A. Job scheduling is made as part of intermediate plans. B. Short-range plans are the responsibility of operations personnel. C. Long-range plans require policies and strategies related to issues such as capacity and capital investment, facility location, new products and processes, and supply chain development. D. Short-range plans are usually for less than 3 months
A
Which of these aggregate planning strategies is a capacity option? A. using part-time workers B. promotion C. back ordering D. counterseasonal product mixing E. changing price
A
Yield management is of interest to organizations having the characteristic of A. segmentable demand. B. stable demand. C. high variable costs. D. low fixed costs.
A
Aggregate planning would entail which of the following production aspects at BMW for a 12-month period? A. number of cars with a hi-fi stereo system to produce B. total number of cars to produce C. number of green cars to produce D. number of two-door vs. four-door cars to produce E. B, C, and D
B
For organizations that have perishable inventory, which of the following characteristics would NOT make yield management of interest? A. low variable costs and high fixed costs B. service or product cannot be sold in advance of consumption C. fluctuating demand D. relatively fixed capacity
B
Revenue management is MOST likely to be used in which one of the following situations? A. a shipping company that can change its fleet size easily B. an airline attempting to fill "perishable" seats at maximum revenue C. a fast food restaurant with wide demand fluctuations during the day D. a dental clinic that wants to fill its appointment book E. a firm with a good counterseasonal product mix
B
The objective of aggregate planning is usually to A. specify what is to be made and when. B. meet forecast demand while minimizing cost over the planning period. C. to determine which plans are feasible in the coming months and which are not. D. provide input to material requirements planning systems
B
What is the primary aggregate planning vehicle in service industries? A. inventory B. labor C. management D. capital
B
Which choice below best describes the counterseasonal product demand option? A. lowering prices when demand is slack B. developing a mix of products that smoothes out their demands C. producing such products as lawnmowers and sunglasses during the winter D. the breaking of the aggregate plan into finer levels of detail E. using subcontractors only when demand is excessive
B
Which of the following aggregate planning strategies is known to lower employee morale? A. changing inventory levels B. varying work force size by hiring or layoffs C. counterseasonal product and service mixing D. yield management E. back ordering during high demand periods
B
Which of the following is NOT one of the features that an S&OP process needs to generate a useful aggregate plan? A. A model that combines forecasts and costs. B. A forecast of demand for a reasonable long-term planning period in aggregate terms. C. A method to determine the relevant costs. D. A logical unit for measuring sales and output.
B
Which of the following is NOT one of the successful techniques for controlling the cost of labor in services? A. flexibility in rate of output or hours of work to meet changing demand B. little flexibility in worker hours to decrease the burden on management C. flexibility of individual worker skills that permits reallocation of available labor D. an on-call labor resource that can be added or deleted to meet unexpected demand E. accurate scheduling of labor-hours to assure quick response to customer demand
B
Which of the following occurs first within a production planning system? A. master production schedule B. aggregate planning C. priority scheduling for products D. detailed work schedules for people
B
Which of the following statements about aggregate planning is TRUE? A. An advantage of the counterseasonal product and service mixing option is that it matches seasonal fluctuations without hiring/training costs. B. A pure chase strategy allows lower inventories when compared to a pure level scheduling. C. The option of varying workforce size by hiring or layoffs is used where the size of the labor pool is small. D. In aggregate planning, back orders are a means of manipulating supply while part-time workers are a way of manipulating product or service demand. E. A disadvantage of subcontracting is that it may require skills or equipment outside the firm's areas of expertise.
B
Which of the following would likely result in the LEAST amount of inventory? A. level strategy B. chase strategy C. Inventory levels are unaffected by the aggregate plan. D. mixed strategy
B
Which statement is characteristic of a mixed strategy for aggregate planning? A. Mixed plans typically yield a worse strategy than a pure plan. B. Mixed plans seek a minimum cost via a combination of eight planning options. C. Mixed plans are less complex to develop than a level plan. D. Mixed plans are less complex to develop than a chase plan
B
Capacity decisions are most critical to which of the following? A. short-range plans B. sales and operations planning C. long-range plans D. intermediate plans
C
In a service business with a highly variable demand, the general approach to aggregate scheduling does NOT involve A. using labor to accommodate most of the changes in demand. B. depleting inventory during peak periods. C. depleting inventory during slack periods. D. building very modest levels of inventory during slack periods
C
In level scheduling, what is kept uniform from month to month? A. inventory levels B. sub-contracting levels C. production/workforce levels D. product mix E. demand levels
C
In the service sector, which of the following aggregate planning strategies might direct your client to a competitor? A. varying work force size by hiring or layoffs B. using part-time workers C. subcontracting D. changing inventory level E. varying production rates through overtime or idle time
C
What directly results from disaggregation of an aggregate plan? A. a transportation matrix B. a capacity-demand matrix C. a master production schedule D. priority scheduling E. detailed work schedules
C
What is an alternative name for revenue management? A. cash flow management B. price and demand management C. yield management D. income management
C
What is the process of breaking an aggregate plan into greater detail? A. aggregation B. decomposition C. disaggregation D. S&OP
C
What makes aggregate planning particularly complex in the airline industry? A. union rules B. significant hiring costs C. the large number of dependent sites D. the large capital investment cost of each airplane
C
Which choice best describes level scheduling? A. Price points are calculated to match demand to capacity. B. Overtime is used to handle seasonal demand fluctuations. C. Inventory goes up or down to buffer the difference between demand and production. D. Daily production is variable from period to period. E. Subcontracting, hiring, and layoffs manipulate supply
C
Which of the following aggregate planning strategies is known to lower employee morale? A. changing inventory levels B. yield management C. varying work force size by hiring or layoffs D. back ordering during high demand periods E. counterseasonal product and service mixing
C
Which of the following is NOT a capacity option of aggregate planning? A. subcontracting B. changing inventory levels C. back ordering during high-demand periods D. varying production rates through overtime or idle time
C
Which of the following is NOT consistent with level scheduling? A. using built-up inventory to meet demand requirements B. finding alternative work for employees during low-demand periods C. varying production levels and/or work force to meet demand requirements D. varying the use of subcontracting E. All of the above are inconsistent with the pure level strategy
C
Which of the following is NOT one of the successful techniques for controlling the cost of labor in services? A. flexibility in rate of output or hours of work to meet changing demand B. accurate scheduling of labor-hours to assure quick response to customer demand C. little flexibility in worker hours to decrease the burden on D. flexibility of individual worker skills that permits reallocation of available labor E. an on-call labor resource that can be added or deleted to meet unexpected demand
C
Which of the following statements regarding aggregate planning is TRUE? A. A pure level strategy allows lower inventories when compared to pure chase and hybrid strategies. B. Because service firms have no inventory, the chase strategy does not apply. C. Mixed strategies in aggregate planning may utilize inventory, work force, and production rate changes over the planning horizon. D. In a pure level strategy, production rates or work force levels are adjusted to match demand requirements over the planning horizon. E. A disadvantage of the option of changing inventory levels is that it forces abrupt production changes.
C
Industries traditionally associated with revenue management operate in which quadrant of the Revenue Management Matrix? A. Quadrant 4: price tends to be variable; use tends to be uncertain. B. Quadrant 1: price tends to be fixed; use tends to be predictable. C. Quadrant 3: price tends to be fixed; use tends to be uncertain. D. Quadrant 2: price tends to be variable; use tends to be predictable.
D
Job assignments are a focused issue in which of the following? A. sales and operations planning B. long-range plans C. intermediate plans D. short-range plans
D
Revenue management is MOST likely to be used in which one of the following situations? A. a dental clinic that wants to fill its appointment book B. a shipping company that can change its fleet size easily C. a fast food restaurant with wide demand fluctuations during the day D. an airline attempting to fill "perishable" seats at maximum revenue E. a firm with a good counterseasonal product mix
D
The objective of aggregate planning is to meet forecast demand while ________ over the planning period. A. maximizing service level B. minimizing fixed cost C. minimizing stock out D. minimizing cost E. all of the above
D
Which of the following is NOT a demand option of aggregate planning? A. influencing demand B. counterseasonal product and service mixing C. back ordering during high-demand periods D. using part-time workers
D
Which of the following statements is NOT true about S&OP? A. S&OP is typically done by cross-functional teams that align competing constraints. B. When the resources appear to be substantially at odds with market expectations, S&OP provides advanced warning to top management. C. S&OP is used to determine which plans are feasible in the coming months and which are not. D. S&OP is also called an aggregate plan
D
Which of the following statements is NOT true regarding aggregate plans? A. An aggregate plan is the output of S&OP. B. An aggregate plan often examines a 3- to 18-month time horizon. C. For service organizations, an aggregate schedule ties strategic goals to workforce schedules. D. Aggregate plans use information regarding individual products rather than product lines.
D
Which of the following statements is NOT true regarding the master production schedule? A. The master production schedule is a result of disaggregation. B. The master production schedule provides input to material requirements planning systems. C. The master production schedule is a timetable that specifies what is to be made and when. D. The master production schedule is a sales forecast.
D
Which of these aggregate planning strategies is a capacity option? A. changing price B. back ordering C. counterseasonal product mixing D. using part-time workers E. promotion
D
Which of these is among the demand options of aggregate planning? A. subcontracting B. varying workforce size C. changing inventory levels D. back-ordering during high-demand periods E. varying production rates through overtime or idle time
D
Dependence on an external source of supply is found in which of the following aggregate planning strategies? A. back ordering during high demand periods B. varying production rates through overtime or idle time C. using part-time workers D. hiring and laying off E. subcontracting
E
Which choice below best describes the counterseasonal product demand option? A. producing such products as lawnmowers and sunglasses during the winter B. using subcontractors only when demand is excessive C. the breaking of the aggregate plan into finer levels of detail D. lowering prices when demand is slack E. developing a mix of products that smoothes out their demands
E
Which of the following is consistent with a chase strategy? A. vary production levels to meet demand requirements B. vary production levels and work force to meet demand requirements C. vary 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 chase strategy.
E
Which of the following statements about aggregate planning is TRUE? A. A disadvantage of subcontracting is that it may require skills or equipment outside the firm's areas of expertise. B. An advantage of the counterseasonal product and service mixing option is that it matches seasonal fluctuations without hiring/training costs. C. The option of varying workforce size by hiring or layoffs is used where the size of the labor pool is small. D. In aggregate planning, back orders are a means of manipulating supply while part-time workers are a way of manipulating product or service demand. E. A pure chase strategy allows lower inventories when compared to a pure level scheduling.
E
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
a. breaks the aggregate plan into greater detail
Which of the following aggregate planning strategies is a "demand option"? a. changing price b. subcontracting c. varying production levels d. changing inventory levels e. using part-time workers
a. changing price
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. a. hire workers to permit production of 65 units per quarter for the next four quarters b. hire 20 workers c. have an increase in inventory of 20 units in the next quarter d. have a decrease in inventory of 5 units in the next quarter e. change its workforce each quarter so that inventory does not change
a. hire workers to permit production of 65 units per quarter for the next four quarters
Planning tasks associated with loading, sequencing, expediting, and dispatching typically fall under a. short-range plans b. intermediate-range plans c. long-range plans d. mission-related planning e. strategic planning
a. short-range plans
Which of the following actions is consistent with the use of pure level strategy? a. use inventory to meet demand requirements b. vary the amount of subcontracting to meet demand requirements c. vary production levels to meet demand requirements d. vary work force to meet demand requirements e. none of the above
a. use inventory to meet demand requirements
Which of the following statements about aggregate planning is false? a. Hiring, layoffs, overtime, and subcontracting are methods of manipulating capacity. b. Aggregate planning produces a plan detailing which products are made and in what quantities. c. Yield management is a way of manipulating product or service demand. d. Aggregate planning uses the adjustable part of capacity to meet production requirements. e. The transportation method is an optimizing technique for aggregate planning.
b. Aggregate planning produces a plan detailing which products are made and in what quantities.
Which of these is among the demand options of aggregate planning? a. subcontracting b. back-ordering during high-demand periods c. changing inventory levels d. varying workforce size e. All of the above are demand options.
b. back-ordering during high-demand periods
Which choice below best describes the counterseasonal demand option? a. producing such products as lawnmowers and sunglasses during the winter b. developing a mix of products that smoothes out their demands c. lowering prices when demand is slack d. using subcontractors only when demand is excessive e. the breaking of the aggregate plan into finer levels of detail
b. developing a mix of products that smoothes out their demands
The planning tasks associated with staffing, production, inventory, and sub-contracting levels typically fall under a. short-range plans b. intermediate-range plans c. long-range plans d. demand options e. strategic planning
b. intermediate-range plans
Dependence on an external source of supply is found in which of the following aggregate planning strategies? a. varying production rates through overtime or idle time b. subcontracting c. using part-time workers d. back ordering during high demand periods e. hiring and laying off
b. subcontracting
In aggregate planning, which one of the following is not a basic option for altering demand? a. promotion b. subcontracting c. back ordering d. pricing e. All are demand options.
b. subcontracting
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
b. subcontracting
Aggregate planning is capacity planning for a. the long range b. the intermediate range c. the short range d. typically one to three months e. typically three or more years
b. the intermediate range
Which of these aggregate planning strategies adjusts capacity to match demand? a. back ordering b. using part-time workers c. counterseasonal product mixing d. changing price e. None of the above is a capacity option.
b. using part-time workers
A firm practices the pure chase strategy. Production last quarter was 1000. Demand over the next four quarters is estimated to be 900, 700, 1000, and 1000. Hiring cost is $20 per unit, and firing cost is $5 per unit. Over the next year, the sum of hiring and firing costs will be a. $500 b. $2,500 c. $7,500 d. $7,000 e. $12,500
c. $7,500
Which of the following statements about aggregate planning is true? a. The development of mathematical models has allowed aggregate planners to discontinue use of trial-and-error methods. b. In aggregate planning, back orders are a means of manipulating supply while part-time workers are a way of manipulating product or service demand. c. A pure chase strategy allows lower inventories when compared to pure level scheduling. d. Disaggregation turns the master production schedule into an intermediate term master plan. e. All of the above are true.
c. A pure chase strategy allows lower inventories when compared to pure level scheduling.
Which of the following statements regarding aggregate planning is true? a. In a pure level strategy, production rates or work force levels are adjusted to match demand requirements over the planning horizon. b. A pure level strategy allows lower inventories when compared to pure chase and hybrid strategies. c. In a mixed strategy, there are changes in both inventory and in work force and production rate over the planning horizon. d. Because service firms have no inventory, the pure chase strategy does not apply. e. All of the above are true.
c. In a mixed strategy, there are changes in both inventory and in work force and production rate over the planning horizon.
Which of the following is not one of the four things needed for aggregate planning? a. a logical overall unit for measuring sales and output b. a method for determining costs, such as hiring, firing, and inventory costs, associated with production schedules c. a mathematical model that will minimize costs over the intermediate planning period d. an aggregate demand forecast for an intermediate planning period e. All of these are needed for aggregate planning.
c. a mathematical model that will minimize costs over the intermediate planning period
Which of these is not a characteristic that makes yield management attractive? a. demand can be segmented b. service can be sold in advance of consumption c. capacity is easily changed d. variable costs are low and fixed costs are high e. demand fluctuates
c. capacity is easily changed
Which of the following is not an ingredient for controlling labor cost 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. contract overseas labor to obtain a lower wage scale 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
c. contract overseas labor to obtain a lower wage scale
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 a. the January requirement is below level production of 420 units b. level production is approximately 1000 units per day c. level production of 420 units per day is below the January requirement d. level production is approximately 420 units per month e. the firm must hire workers between December and January
c. level production of 420 units per day is below the January requirement
Which of the following is not an advantage of level scheduling? a. stable employment b. lower absenteeism c. matching production exactly with sales d. lower turnover e. more employee commitment
c. matching production exactly with sales
In level scheduling, what is kept uniform from month to month? a. product mix b. inventory levels c. production/workforce levels d. demand levels e. sub-contracting levels
c. production/workforce levels
Which of the following 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
c. subcontracting
Which of the following aggregate planning models is based primarily upon a manager's past experience? a. the linear decision rule b. simulation c. the management coefficients model d. the transportation method e. graphical methods
c. the management coefficients model
Which of the following statements about aggregate planning is true? a. Advertising/promotion is a way of manipulating product or service supply. b. Work station loading and job assignments are examples of aggregate planning. c. Overtime/idle time is a way of manipulating product or service demand. d. Aggregate planning uses the adjustable part of capacity to meet production requirements. e. All of the above are true.
d. Aggregate planning uses the adjustable part of capacity to meet production requirements.
Which choice best describes level scheduling? a. Daily production is variable from period to period. b. Subcontracting, hiring, and firing manipulate supply. c. Price points are calculated to match demand to capacity. d. Inventory goes up or down to buffer the difference between demand and production. e. Seasonal demand fluctuations are matched without hirings or layoffs.
d. Inventory goes up or down to buffer the difference between demand and production.
Which of the following is the term used for medium range capacity planning with a time horizon of three to eighteen months? a. material requirements planning b. short-range planning c. strategic planning d. aggregate planning e. none of the above
d. aggregate planning
"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. capacity allocation to different classes of customers in order to maximize profits e. management's selection of a product mix yielding maximum profits
d. capacity allocation to different classes of customers in order to maximize profits
Which of the following aggregate planning strategies is a "capacity option"? a. influencing demand by changing price b. counterseasonal product mixing c. influencing demand by extending lead times d. changing inventory levels e. influencing demand by back ordering
d. changing inventory levels
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 a. add 100 units to inventory in the next period b. add 200 units to inventory in the next period c. hire workers to make up the 100 unit difference d. fire workers to make up the 200 unit difference e. implement a lower price point to increase demand
d. fire workers to make up the 200 unit difference
Which of the following uses regression to incorporate historical managerial performance into aggregate planning? a. transportation method b. simulation c. linear decision rule d. management coefficients model e. keiretsu
d. management coefficients model
"An optimal plan for minimizing the cost of allocating capacity to meet demand over several planning periods" best describes a. the linear decision rule b. simulation c. the management coefficients model d. the transportation method e. graphical methods
d. the transportation method
Which of the following aggregate planning methods does not work if hiring and layoffs are possible? a. the linear decision rule b. simulation c. the management coefficients model d. the transportation method e. graphical methods
d. the transportation method
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
d. varying work force size by hiring or layoffs
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.
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.
e. All of the above are inconsistent with the pure level strategy.
Which of the following statements regarding aggregate planning in services is false? a. When outputs are intangible, aggregate planning deals mainly with human resources requirements and managing demand. b. Perishability of inventory is an important consideration of planning. c. Aggregate planning in some service industries can be simpler than in manufacturing. d. Labor is the primary aggregate planning vehicle. e. Level scheduling is far more common than chase.
e. Level scheduling is far more common than chase.
Yield management is most likely to be used in which one of the following situations? a. a fast food restaurant with wide demand fluctuations during the day b. a dental clinic that wants to fill its appointment book c. a firm with a good counterseasonal product mix d. a shipping company that can change its fleet size easily e. an airline attempting to fill "perishable" seats at maximum revenue
e. an airline attempting to fill "perishable" seats at maximum revenue
Aggregate planning for service firms that provide intangible output deals mainly with a. smoothing the production rate and finding the optimal size of the workforce b. yield management c. centralized purchasing d. centralized production e. planning for human resource requirements and managing demand
e. planning for human resource requirements and managing demand
Which of the following attempts to manipulate product or service demand? a. inventories b. part-time workers c. subcontracting d. overtime/idle time e. price cuts
e. price cuts
