MULTIPLE CHOICE

1. The typical time horizon for aggregate planning is

a. less than a month

b. up to 3 months

c. 3 to 18 months

d. over one year

2. 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

3. Aggregate planning is capacity planning for

a. the long range

b. the intermediate range

c. the short range

d. typically one to three months

4. Planning tasks associated with job scheduling, machine loading, and dispatching typically fall
under
a. short-range plans

b. intermediate-range plans

c. long-range plans

d. mission-related planning

5. 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
6. 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 production 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.

7. 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

An option for altering the availability of capacity is

a. pricing

b. promotion

c. inventory levels

d. back orders

8. 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

9. 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

10. 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
11. Which of the following aggregate planning strategies is most likely to lower employee morale?
a. varying work force size by hiring or layoffs

b. varying production rates through overtime or idle time

c. using part-time workers

d. back ordering during high demand periods

12. 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

13. Which of the following attempts to manipulate product or service demand?

a. inventories

b. part-time workers

c. subcontracting

e. price cuts

14. Which of the following aggregate planning strategies is a "demand option"?

a. changing price

b. subcontracting

c. varying production levels

d. changing inventory levels

15. 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
16. Which of the following statements about aggregate planning is true?
a. In spite of the research into mathematical models, aggregate production planners continue to
use trial-and-error methods when developing their plans.

b. In aggregate planning, back orders are a means of manipulating demand while part-time
workers are a way of manipulating product or service supply.

c. A pure chase strategy allows lower inventories when compared to pure level and hybrid
strategies.

d. All of the above are true.

17. 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 (Aggregate planning strategies, moderate)

18. In level scheduling, what is kept uniform from month to month?

a. product mix

b. inventory levels

c. production/workforce levels

d. demand levels

19. 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

e. All of the above are inconsistent with the pure level strategy.
20. 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

e. All of the above are consistent with a pure chase strategy.

21. 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

22. Which of the following actions is consistent with the use of pure level strategy?
a. use of 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

23. "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

24. 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

25. 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

26. 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

27. Which of the following is not an ingredient for controlling labor cost in services?
a. close control of labor hours to assure quick customer response

b. some form of on-call labor resource that can be added or deleted to meet unexpected demand

c. contract overseas labor for lower wage scale

d. flexibility of individual worker skills that permits reallocation of available labor time

28. Aggregate planning for service firms with high-volume tangible output is directed toward
a. smoothing the production rate

b. yield management

c. centralized purchasing

d. decreasing the demand rate during peak periods

29. Yield management is most likely to be used in which one of the following industries?
a. higher education

b. healthcare

c. trucking

e. airlines

30. "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. process designed to increase the rate of output

d. capacity allocation to different classes of customers in order to maximize profits