Deck 16: Aggregate Planning and Master Scheduling

Question 1

Aggregate planners typically use mathematical techniques such as linear programming for planning.

Answer 1

False

Question 2

Aggregate planners commonly use trial-and-error methods in developing aggregate plans.

Answer 2

True

Question 3

An advantage of a "chase" strategy for aggregate planning is that inventories can be kept relatively low.

Answer 3

True

Question 4

Linear programming models yield the optimal solution.

Question 5

The goal of aggregate planning is to achieve a production plan that effectively utilizes the organization's resources to meet expected demand.

Question 6

The output from aggregate planning is a detailed business plan covering the next 2 to 12 months.

Question 7

Seasonality in demand has the advantage of leveling out requirements for our product or service.

Question 8

Aggregate planning is capacity planning that typically covers a time horizon of one to three months.

Question 9

Organizations facing seasonal changes in demand are prevented from using aggregate planning techniques.

Question 10

A level capacity strategy is also known as a chase demand strategy.

Question 11

Capacity can be modified in aggregate planning by promotion and producing additional product using overtime.

Question 12

The use of tables and charts in aggregate planning usually enables planners to arrive at an optimal plan.

Question 13

Departmental budgeting is an example of aggregate planning.

Question 14

Aggregate planners are concerned with the quality and quantity of expected demand.

Question 15

Disaggregating an aggregate plan leads to a master schedule.

Question 16

Ultimately the overriding factor in choosing a strategy in aggregate planning is overall cost.

Question 17

Aggregate planning is used to establish general levels of employment, output, and inventories over an intermediate range of time.

Question 18

The master schedule indicates the quantity and timing for delivery of a product, but not the dates production will need to start.

Question 19

The assignment of work to specific machines and people are examples of aggregate planning.

Question 20

Demand can be altered in aggregate planning by promotion and producing additional product using overtime.

Question 21

One area in which aggregate planning decisions are made is:

A) job sequencing
B) customer order quantities
C) inventory levels
D) location
E) layout

Question 22

A time fence in the master schedule is used to prevent changes to the schedule within the frozen section.

Question 23

Aggregate planning requires which of the following information?
(I) a forecast of expected demand
(II) current levels of inventory
(III) policies regarding employment levels

A) II only
B) I and II only
C) I and III only
D) I, II, and III
E) II and III only

Question 24

Which one of the following is not a basic option for altering demand?

A) promotion
B) backordering
C) pricing
D) subcontracting
E) All are demand options.

Question 25

One option for altering the pattern of demand is:

A) pricing differentials
B) overtime.
C) part-time workers.
D) inventories.
E) subcontracting.

Question 26

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 one or more years.

Question 27

Available-to-promise in the first week is equal to beginning inventory plus MPS quantity, if any, less committed customer orders before the next MPS quantity.

Question 28

Which of the following is not an input to the aggregate planning process?

A) resources available
B) demand forecast
C) policies on workforce changes
D) master production schedules
E) cost information

Question 29

Master schedulers are employed primarily by service organizations.

Question 30

In doing aggregate planning for a firm producing paint, the aggregate planners would most likely deal with:

A) just gallons of paint, without concern for the different colors and sizes.
B) gallons of paint, but be concerned with the different colors to be produced.
C) gallons, quarts, pints, and all the different sizes to be produced.
D) all the different sizes and all the different colors by size.
E) all of the different colors targeted for different markets.

Question 31

Which of the following best describes aggregate planning?

A) the link between intermediate-term planning and short-term operating decisions
B) a collection of objective planning tools
C) make-or-buy decisions
D) an attempt to respond to predicted demand within the constraints set by product, process, and location decisions
E) manpower planning

Question 32

Essentially, the output of aggregate planning is the:

A) marketing plan.
B) production plan.
C) rough-cut capacity plan.
D) assignment plan.
E) material requirements plan.

Question 33

Aggregate planners attempt to balance:

A) demand and inventories.
B) demand and costs.
C) capacity and inventories.
D) capacity and costs.
E) capacity and demanD.

Question 34

After the first period of the planning horizon, available-to-promise is computed only for those periods in which there is an MPS quantity.

Question 35

Which of the following is not a basic option for altering the availability of capacity in a service environment?

A) overtime
B) hiring/layoff
C) part time
D) inventory
E) All of the choices are options.

Question 36

Subcontracting "in" would apply to periods in which our organization has excess capacity.

Question 37

Which of the following is an input to aggregate planning?

A) ending inventory
B) demand forecasts for each period
C) customer levels
D) setup costs
E) quantity discounts

Question 38

Which one of the following would not be considered a decision option for purposes of aggregate planning?

A) inventory levels
B) manpower levels
C) pricing
D) production costs
E) promotion

Question 39

Accommodating peak demand and effectively using labor resources during periods of low demand would be the main goals of aggregate planners in:

A) manufacturing.
B) military.
C) archeology.
D) libraries.
E) financial services.

Question 40

In the master production schedule, production is planned for the next period whenever the available-to-promise quantity becomes negative.

Question 41

The main disadvantage(s) of informal techniques used for aggregate planning is(are):

A) they are expensive to do.
B) they may not result in the best plan.
C) they take a long time to do.
D) they require the use of a computer.
E) the lack of formal education of the planners.

Question 42

Moving from the aggregate plan to a master production schedule requires:

A) rough-cut capacity planning.
B) disaggregation.
C) suboptimization.
D) strategy formulation.
E) chase strategies.

Question 43

Which of the following would not be a strategy associated with adjusting aggregate capacity to meet expected demand?

A) Subcontract.
B) Vary the size of the workforce.
C) Schedule overtime.
D) Allow inventory levels to vary.
E) Use back orders.

Question 44

That portion of projected inventory which enables marketing to make realistic commitments about delivery dates for new orders is:

A) beginning inventory.
B) safety stock inventory.
C) available-to-promise inventory.
D) high-margin inventory.
E) master production schedule arrivals.

Question 45

One option for altering the availability of capacity is:

A) use of overtime or slack timE.
B) pricing.
C) promotion.
D) back orders.
E) rigidly fixing work schedules.

Question 46

Aggregate planners seek to match supply and demand:

A) at minimum overall cost.
B) by changing company policy.
C) by minimizing layoffs.
D) keeping inventories at a minimum.
E) by minimizing hires.

Question 47

The direct result of disaggregating the aggregate plan is the:

A) marketing plan.
B) production plan.
C) rough-cut capacity plan.
D) master schedulE.
E) material requirements plan.

Question 48

Information for firm ABC:
What is the expected inventory at the end of April 2008?

A) 350
B) 250
C) 150
D) 50
E) 80

Question 49

Information for firm ABC:
What was the inventory at the end of March 2008?

A) 350
B) 250
C) 150
D) 50
E) 400

Question 50

Proactive and reactive aggregate planning strategies are best associated with:

A) input and output.
B) make and buy.
C) quantitative and qualitative.
D) exact and approximate.
E) demand and capacity options.

Question 51

Linear programming to produce an aggregate plan:

A) will produce the best plan if accurate inputs are useD.
B) is the most widely used technique.
C) is easy to implement.
D) will produce a plan that may not be the best plan.
E) requires an Excel spreadsheet.

Question 52

In order to use the level capacity strategy, variations in demand are met by:

A) varying output during regular time without changing employment levels.
B) varying output during regular time by changing employment levels.
C) varying output by changing overtime levels.
D) using some combination of inventories, overtime, part-time, subcontracting, and back orders.
E) price adjustments.

Question 53

Uncommitted inventory is called:

A) available-to-promise inventory.
B) free inventory.
C) safety stock.
D) lead time inventory.
E) obsolete inventory.

Question 54

Which of the following is most closely associated with disaggregation?

A) subcontracting
B) master schedule
C) diversity
D) varying inventory levels
E) firing and laying off

Question 55

In using the chase strategy, variations in demand could be met by:

A) promotions.
B) varying output during regular time by changing employment levels.
C) varying inventory levels.
D) using some combination of inventories, overtime, part-time, subcontracting, and back orders.
E) price adjustments.

Question 56

Using variable pricing in response to demand variability to maximize revenue using perishable capacity is known as:

A) yield management.
B) profit minimization.
C) capacity loading.
D) demand optimization.
E) perishability avoidance.

Question 57

One option for altering the availability of manufacturing capacity is:

A) pricing.
B) promotion.
C) back orders.
D) inventories.
E) yield management.

Question 58

Which of the following are typically in play in a circumstance in which yield management is worthwhile?
(I) Perishable capacity
(II) Ample finished goods storage
(III) Demand variability
(IV) Low holding costs

A) I, II, and IV only
B) I and III only
C) III only
D) II and III only
E) II, III, and IV only

Question 59

In practice, the more commonly used techniques for aggregate planning are:

A) mathematical techniques.
B) informal trial-and-error techniques.
C) transportation models.
D) simulation models.
E) linear programming optimization.

Question 60

Simulation to produce an aggregate plan:

A) will produce the best plan.
B) is the most widely used technique.
C) is easy to implement.
D) will produce a plan that may not be the best plan.
E) requires a minimum of four iterations to be accurate.

Question 61

A firm has 43 units of a certain product on hand. Forecasts for the first two planning periods are 20 units each. A production quantity of 80 units is planned to be available in period 3. Customer orders are 22 for period 1 and 17 for period 2.What quantity is available for commitment to new customers in either of the first two periods?

A) 21
B) 1
C) 20
D) 4
E) impossible to say without more information

Question 62

Aggregate planning for services is more difficult than aggregate planning for manufacturing because __________ and __________ are more difficult to predict.

A) capacity availability; customer tastes
B) holding costs; overtime costs
C) demand; capacity availability
D) capacity change costs; holding costs
E) hiring costs; holding costs

Question 63

Which of the following differs between aggregate planning in services and aggregate planning in manufacturing?

A) uncertainty in demand
B) costs of storing inventory
C) the perishability of capacity
D) cost of overtime
E) cost of hiring

Question 64

When the opportunity cost of lost revenue is relatively high, _________ become(s) relatively more attractive.

A) layoffs
B) back orders
C) excess capacity
D) disaggregation
E) minimal inventory

Question 65

Aggregate planning in the case of a high-volume product output business such as a restaurant is directed toward:

A) smoothing the service ratE.
B) reducing the size of the workforce.
C) making the kitchen and waitstaff more flexible.
D) coming up with a fixed staffing level.
E) making weekly work schedules more stable.

Question 66

In a service setting, the aggregate plan results in a time-phased projection of __________ requirements.

A) customer
B) staff
C) inventory
D) subcontracting
E) outsourcing

Question 67

A company's disaggregation plan calls for the aggregate production to be broken down into 40 percent Product A, 40 percent Product B, and 20 percent Product C. The aggregate plan calls for total production that averages 1,100 units per quarter. Quarter 1 production will be 800 units, quarter 2 production will be 1,400 units, and quarter 3 production will be 1,200 units. How many units of Product A will be produced in quarter 4?

A) 320 units
B) 400 units
C) 440 units
D) 480 units
E) 560 units

Question 68

A firm has 43 units of a certain product on hand. Forecasts for the first two planning periods are 20 units each. A production quantity of 80 units is planned to be available in period 3. Customer orders are 22 for period 1 and 17 for period 2. What is the projected on-hand inventory at the end of period 2?

A) 21
B) 1
C) 12
D) 20
E) impossible to say without more information

Question 69

One thing that makes aggregate planning in services easier than aggregate planning in manufacturing is:

A) inventory is cheaper to hold.
B) labor availability is more predictable.
C) inventory is less perishable.
D) labor is more flexiblE.
E) demand is less variable.

Question 70

At XYZ Corp., the master schedule reflects the fact that 50 percent of its output is product version A, 30 percent is version B, and 20 percent is version C. Suppose that over the coming year planned aggregate production is for 10,400 units. Once the production plan is disaggregated evenly throughout the year, what will the weekly production for version A be (assume 52 weeks per year)?

A) 1,000
B) 200
C) 400
D) 100
E) 50

Question 71

A firm has 56 units of product X on hand. Forecasts of demand are for 20 units per week. An MPS quantity of 100 units is planned to arrive in period 3. Customer orders are 24 for period 1, 18 for period 2, and 15 for period 3.
What quantity is available for commitment to new customers prior to the receipt of the MPS quantity in week 3?

A) 14
B) 32
C) 12
D) 20
E) impossible to say without more information

Question 72

A firm has 56 units of product X on hand. Forecasts of demand are for 20 units per week. An MPS quantity of 100 units is planned to arrive in period 3. Customer orders are 24 for period 1, 18 for period 2, and 15 for period 3.
What is the projected on-hand inventory at the end of period 2?

A) 14
B) 32
C) 12
D) 20
E) impossible to say without more information

Question 73

A master production schedule quantity of 300 units will arrive in week 6. Weekly demand over weeks 3 through 10 is forecasted at 50 units. At present, orders have been booked in various quantities in weeks 1, 2, 3, and 4. What is available to promise for week 6?

A) 50
B) 6
C) 300
D) 100
E) cannot be determined without projected on-hand information

Question 74

Which of the following steps is necessary to ensure that a master schedule is valid?

A) worker scheduling
B) order promising
C) inventory counting
D) order booking
E) rough-cut capacity planning