Chapter 13 Aggregate Planning True / False Questions
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Chapter 13 Aggregate Planning
True / False Questions 1. Aggregate planning is intermediate-range capacity planning that typically covers a time horizon of one to three months. FALSE
Difficulty: Medium TLO: 1 Taxonomy: Knowledge 2. The goal of aggregate planning is to achieve a production plan that attempts to balance the organization's resources and meet expected demand. TRUE
Difficulty: Easy TLO: 1 Taxonomy: Knowledge 3. Aggregate planners are concerned with the quality and quantity of expected demand. FALSE
Difficulty: Easy TLO: 1 Taxonomy: Knowledge 4. Aggregate planning is used to establish general levels of employment, output, and inventories over an intermediate-range of time. TRUE
Difficulty: Easy TLO: 1 Taxonomy: Knowledge 5. The assignment of work to specific machines and people are examples of aggregate planning. FALSE
Difficulty: Medium TLO: 1 Taxonomy: Knowledge 6. The output from aggregate planning is a detailed business plan covering the next 2 to 12 months. FALSE
Difficulty: Easy TLO: 1 Taxonomy: Knowledge 7. Demand can be altered in aggregate planning by promotion and producing additional product using overtime. FALSE
Difficulty: Hard TLO: 2 Taxonomy: Knowledge 8. Capacity can be modified in aggregate planning by promotion and producing additional product using overtime. FALSE
Difficulty: Hard TLO: 2 Taxonomy: Knowledge 9. Organizations facing seasonal changes in demand are prevented from using aggregate planning techniques. FALSE
Difficulty: Medium TLO: 2 Taxonomy: Knowledge 10. Seasonality in demand has the advantage of leveling out requirements for our product or service. FALSE
Difficulty: Medium TLO: 2 Taxonomy: Knowledge 11. A level capacity strategy is also known as a chase demand strategy FALSE
Difficulty: Easy TLO: 2 Taxonomy: Knowledge 12. An advantage of a "chase" strategy for aggregate planning is that inventories can be kept relatively low. TRUE
Difficulty: Medium TLO: 2 Taxonomy: Knowledge 13. Linear programming models yield the optimal solution. TRUE
Difficulty: Medium TLO: 3 Taxonomy: Knowledge 14. Ultimately the overriding factor in choosing a strategy in aggregate planning is overall cost. TRUE
Difficulty: Hard TLO: 2 Taxonomy: Knowledge 15. Aggregate planners commonly use trial and error methods in developing aggregate plans. TRUE
Difficulty: Easy TLO: 3 Taxonomy: Knowledge 16. The use of tables and charts in aggregate planning usually enables planners to arrive at an optimal plan. FALSE
Difficulty: Hard TLO: 3 Taxonomy: Knowledge 17. Aggregate planners typically use mathematical techniques such as linear programming and linear decision rules for planning. FALSE
Difficulty: Medium TLO: 3 Taxonomy: Knowledge 18. Disaggregating an aggregate plan leads to a master schedule. TRUE
Difficulty: Medium TLO: 1 Taxonomy: Knowledge 19. The master schedule indicates the quantity and timing for delivery of a product, but not the dates production will need to start. TRUE
AACSB: AS Difficulty: Easy TLO: 1 Taxonomy: Knowledge 20. Departmental budgeting is an example of aggregate planning. TRUE
Difficulty: Easy TLO: 1 Taxonomy: Knowledge 21. Master schedulers are employed primarily by service organizations. FALSE
Difficulty: Easy TLO: 1 Taxonomy: Knowledge 22. Subcontracting 'in' would apply to periods in which our organization has excess capacity. TRUE
Difficulty: Medium TLO: 2 Taxonomy: Knowledge 23. 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. TRUE
Difficulty: Medium TLO: 1 Taxonomy: Knowledge 24. A time fence in the master schedule is used to prevent unauthorized people from making changes to the schedule. FALSE
Difficulty: Medium TLO: 1 Taxonomy: Knowledge 25. After the first period of the planning horizon, available-to-promise is computed only for those periods in which there is an MPS quantity. TRUE
Difficulty: Medium TLO: 1 Taxonomy: Knowledge 26. In the master production schedule, production is planned for the next period whenever the available-to-promise quantity becomes negative. FALSE
Difficulty: Hard TLO: 1 Taxonomy: Knowledge
Multiple Choice Questions 27. 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
Difficulty: Easy TLO: 1 Taxonomy: Knowledge 28. Accommodating peak demands and effectively using labor resources during periods of low demand would be the goal of aggregate planners in A. Manufacturing B. Military C. Archeology D. Libraries E. Financial Services
Difficulty: Hard TLO: 1 Taxonomy: Knowledge 29. 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
Difficulty: Easy TLO: 1 Taxonomy: Knowledge 30. One area to which aggregate planning decisions relate is: A. job sequencing B. customer order quantities C. inventory levels D. location E. layout
Difficulty: Hard TLO: 1 Taxonomy: Knowledge 31. Which of the following is an input to aggregate planning? A. beginning inventory B. forecasts for each period of the schedule C. customer orders D. all of the above E. quantity discounts
Difficulty: Medium TLO: 2 Taxonomy: Knowledge 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
Difficulty: Hard TLO: 1 Taxonomy: Knowledge 33. 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. none of the above
Difficulty: Medium TLO: 2 Taxonomy: Knowledge 34. Aggregate planning requires which of the following information? A. a forecast of expected demand B. current levels of inventory C. (a) and (b) D. policies regarding employment levels E. all of the above
Difficulty: Medium TLO: 2 Taxonomy: Knowledge 35. 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
Difficulty: Easy TLO: 1 Taxonomy: Knowledge 36. Which of the following is not an input to the aggregate planning process: A. resources available B. demand forecast C. policies on work force changes D. master production schedules E. cost information
Difficulty: Hard TLO: 2 Taxonomy: Knowledge 37. 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
Difficulty: Hard TLO: 2 Taxonomy: Knowledge 38. 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 these are basic capacity options.
Difficulty: Medium TLO: 2 Taxonomy: Knowledge 39. 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.
AACSB: AS Difficulty: Medium TLO: 2 Taxonomy: Knowledge 40. One option for altering the pattern of demand is: A. backorders B. overtime C. part-time workers D. inventories E. subcontracting
Difficulty: Medium TLO: 2 Taxonomy: Knowledge 41. 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. vary the intensity of workforce utilization D. allow inventory levels to vary E. use backorders
Difficulty: Medium TLO: 2 Taxonomy: Knowledge 42. One option for altering the availability of manufacturing capacity is: A. pricing B. promotion C. backorders D. inventories E. none of the above apply to manufacturing capacity
AACSB: AS Difficulty: Medium TLO: 2 Taxonomy: Knowledge 43. One option for altering the availability of capacity is: A. use of overtime or slack time B. pricing C. promotion D. backorders E. none of the above
Difficulty: Medium TLO: 2 Taxonomy: Knowledge 44. 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. (a) and (b) D. using combination of inventories, overtime, part time, and back orders E. price adjustments
Difficulty: Medium TLO: 2 Taxonomy: Knowledge 45. In using the "chase strategy" variations in demand could be met by: A. varying output during regular time without changing employment levels B. varying output during regular time by changing employment levels C. (a) and (b) D. varying inventory levels E. price increases
Difficulty: Medium TLO: 2 Taxonomy: Knowledge 46. Uncommitted Inventory is called A. Available to promise inventory B. Free inventory C. Safety stock D. Lead time inventory E. Obsolete inventory
Difficulty: Medium TLO: 2 Taxonomy: Knowledge 47. Aggregate planners seek to match supply and demand: A. at minimum overall cost B. by staying within company policy C. (a) and (b) D. keeping inventories at a minimum E. all of the above
Difficulty: Easy TLO: 1 Taxonomy: Knowledge 48. In practice, the more commonly used techniques for aggregate planning are: A. mathematical techniques B. informal trial-and-error techniques C. (a) and (b) about equally D. simulation models E. linear programming optimization
Difficulty: Easy TLO: 3 Taxonomy: Knowledge 49. 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 use of a computer E. lack of formal education of the planners
Difficulty: Easy TLO: 3 Taxonomy: Knowledge 50. Inventory information for firm ABC: 
What is the expected inventory at the end of April, 1999? A. 350 B. 250 C. 150 D. 50 E. none of the above
AACSB: AS Difficulty: Easy TLO: 4 Taxonomy: Application 51. Inventory information for firm ABC: 
What was the inventory at the end of March, 1999? A. 350 B. 250 C. 150 D. 50 E. none of the above
AACSB: AS Difficulty: Medium TLO: 4 Taxonomy: Application 52. 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. (a) and (b) D. will produce a plan that may not be the best plan E. requires an excel spread sheet
Difficulty: Hard TLO: 3 Taxonomy: Knowledge 53. Simulation to produce an aggregate plan: A. will produce the best plan B. is the most widely used technique C. both (a) and (b) D. will produce a plan that may not be the best plan E. requires a minimum of 4 iterations to be accurate
Difficulty: Hard TLO: 3 Taxonomy: Knowledge 54. Which term is most closely associated with the term disaggregation? A. subcontracting B. master schedule C. diversity D. varying inventory levels E. firing and laying off
Difficulty: Medium TLO: 1 Taxonomy: Knowledge 55. 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
Difficulty: Medium TLO: 1 Taxonomy: Knowledge 56. Moving from the aggregate plan to a master production schedule requires: A. rough cut capacity planning B. disaggregation C. sub-optimization D. strategy formulation E. chase strategies
Difficulty: Hard TLO: 1 Taxonomy: Knowledge 57. 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. none of the above
AACSB: CA Difficulty: Easy TLO: 1 Taxonomy: Knowledge 58. 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
Difficulty: Medium TLO: 2 Taxonomy: Knowledge
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