Unit 3

Scheduling Operations
Chapter 12: Aggregate Planning

Lesson 38-Tutorial 11

Dear Students, today we are going to have a tutorial session for the previous
lesson. The overall objective is to appreciate how the theoretical concepts are
translated and applied into practical business situations.

Let’s put our thinking caps and start now.

1. An aggregate plan is a statement of strategy which projects production

rates, work-force levels, and inventory levels for a medium range period,
using reduced detail to simplify planning.
a. True
b. False

2. In manufacturing organizations, the production plan is the linkage between

the strategic goals of the business plan and the work-force schedule.
a. True
b. False

3. To achieve aggregate plans, products, labor, and time are grouped in

compatible terms to reduce detail and facilitate periodic updating of the
plan.

a. True
b. False

4. The generation of the Aggregate Plan should be assigned to a group

whose sole purpose is planning and budget development. This approach
will reduce the potential for conflict among operational units.
a. True
b. False
 5. Creative pricing of goods and services is an example of an aggressive
alternative for managing demand patterns in aggregate planning.

a. True
b. False

6. Producing complementary products (similar resource requirements with

different demand cycles) is an example of a reactive alternative for
managing patterns of demand in aggregate planning.

a. True
b. False

7. Reactive alternatives for achieving acceptable aggregate plans are actions

that respond to a given demand pattern as opposed to attempts to modify
demand.

a. true
b. false

8. Both extended overtime and under time are human resource utilization
strategies that may lead to lower per unit productivity.

a. true
b. false

9. Four reactive alternative strategies that are used as starting points for
aggregate plans can be classified as capacity and inventory strategies

a. True
b. False

10. In the aggregate planning process, alternatives, constraints, and costs

must be identified. The costs include wages, inventory, and facility capital
costs.

a. True
b. false

11. In the aggregate planning process, alternatives, constraints, and costs

must be identified. The costs include wages, inventory, and facility capital
costs.

a. True
b. False
12. Acceptable aggregate plans involving anticipation inventory requires the
use of a common unit of measure such as employee-period equivalents.

a. True
b. False

13 When Total Capacity, product demand, and production costs of goods are
known for each production period, one transportation method solution is
sufficient to determine the best work-force plan.

a. True
b. False

14. A common drawback for the transportation method and linear

programming model is the assumption that all costs are linearly related to
the amount of goods produced.

a. True
b. False

15. A level strategy is a preferred approach in the service sector when the
staffing plan is developed.

a. True
b. False

16. An aggregate plan for a manufacturing firm includes consideration of:

a. production rates
b. work-force levels
c. inventory holdings

17. A service firm's aggregate plan links the firm's strategic goals and
objectives with detailed operational plans called:

a. production plan
b. staffing plan
c. work-force schedule
d. none of the above

18. Which of the following statements does NOT apply to a production plan?

a. plans are consistent with company's strategic goals and objectives

 b. enables the assessment of financial and physical resource needs
without excessive detail
c. serves as a bridge between the strategic and operational plans
d. provides a view of detailed work-force schedules

19. The time horizon for an aggregate plan is typically:

a. 0 - 3 months
b. 3 - 18 months
c. 24 - 60 months
d. none of the above

20. A for-profit service may expect to encounter which of the following sequence of
plans?
a. business plan; staffing plan; work-force schedule
b. business plan; production plan; work-force schedule
c. financial plan; staffing plan; master production schedule
d. Annual plan; production plan; master production schedule

21. The operations area input to the aggregate plan includes:

a. demand forecasts
b. cost data
c. work-force capacities
d. product design changes

22. Aggressive alternatives for coping with demand requirements include:

a. anticipation inventory
b. creative pricing
c. employee hiring and layoffs
d. use of subcontractors

23. A reactive strategy that is sometimes called the capacity strategy may be
characterized as:
a. Chase #1: vary work-force level to match demand
b. Chase #2: vary output rate to match demand
c. Level #1: constant work-force level
d. Level #2: constant output rate

24. The aggregate planning strategy that is most likely to impact the productivity of
manufacturing workers, adversely, is:
a. hiring of temporary workers
b. use of overtime
c. layoff of workers
d. building anticipation inventory

25. A linear programming model CANNOT be used when which of the following are
true?
 a. an optimal production plan is desired
b. the values of decision variables are fractional
c. a set of linear constraints may be defined
d. cross product relationships exist between two or more decision
variables
26. The transportation method may be used to determine the costs of alternative
strategies for anticipation inventory when which of the following data are
available?

a. work-force capacity per planning period

b. aggregate demand per planning period
c. beginning inventory
d. all of the above

27. Which of the following statements are true about anticipation inventory?

a. inventory increases during periods of light demand

b. use of anticipation inventory is a reactive alternative to arrive at an
acceptable aggregate plan
c. increase in anticipation inventory leads to increases in pipeline
inventory
d. both a and b

28. When following a utilization strategy, which alternative relies on external sources
of production?
a. overtime/undertime
b. Subcontracting
c. back orders
d. stock outs

29. A major department store initiates a business plan that gets translated into an
operational plan called a _______________.

a. production plan
b. staffing plan
c. master production schedule
d. work-force schedule

30. An appliance manufacturer initiates a business plan that gets translated into an
operational plan called a _______________.

a. production plan
b. staffing plan
c. master production schedule
d. work-force schedule