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Operations management stevenson 11th edition test bank ch11

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AACSB: Reflective Thinking Blooms: Remember Difficulty: Medium Learning Objective: 11-01 Explain what aggregate planning is and how it is usefulA. AACSB: Reflective Thinking Blooms: Reme

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

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17 Aggregate planners typically use mathematical techniques such as linear programming and linear decision rules for planning

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26 In the master production schedule, production is planned for the next period whenever the promise quantity becomes negative

available-to-True False

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

28 Accommodating peak demands and effectively using labor resources during periods of low demand would

be the goal of aggregate planners in …

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

30 One area to which aggregate planning decisions relate is:

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31 Which of the following is an input to aggregate planning?

E material requirements plan

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

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

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

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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 All of these are basic capacity options

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

40 One option for altering the pattern of demand is:

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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 none of the above apply to manufacturing capacity

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

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

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

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46 Uncommitted inventory is called …

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

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

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

50 Inventory information for firm ABC:

What is the expected inventory at the end of April, 1999?

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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

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

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

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

55 The direct result of disaggregating the aggregate plan is the:

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

A rough cut capacity planning

D high margin inventory

E none of the above

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

59 A manager has prepared a forecast of expected aggregate demand for the next six months Develop an aggregate plan to meet this demand given this additional information: A level production rate of 100 units per month will be used Backorders are allowed, and they are charged at the rate of $8 per unit per month Inventoryholding costs are $1 per unit per month in ending inventory Determine the cost of this plan if regular time cost

is $20 per unit and beginning inventory is zero

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60 Given the projected demands for the next six months, prepare an aggregate plan that uses inventory, regular time and overtime, and backorders The plan must wind up with no units in ending inventory in Period 6 Regular time capacity is 150 units per month Overtime capacity is 20 units per month Overtime cost is $30 perunit, backorder cost is $20 per unit, inventory holding cost is $5 per unit, regular time cost of $20 per unit, and beginning inventory is zero.

61 Use either the transportation method or linear programming to develop an optimum aggregate plan, given the following data:

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62 Prepare a master schedule based on the following information:

Currently there are 145 units in inventory Policy calls for a fixed order quantity of 250 units

63 What is total forecasted demand?

64 What is total regular time capacity?

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65 How should overtime capacity be utilized?

66 What are total regular time costs?

67 What are total overtime costs?

68 What are total carrying costs?

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69 What are total backorder costs?

70 What are total costs for each period?

71 What are total costs for the six periods?

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

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73 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

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 period3

74 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 additional information

75 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 additional information

76 When the opportunity cost of lost revenue is relatively high, _ become(s) relatively more

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77 The more demand is, the more the aggregate plan will tend to reflect the strategy

B costs of storing inventory

C the perishability of capacity

D cost of overtime

E cost of hiring

80 At XYZ Corp., the aggregate planning unit reflects the fact that 50% of its output is product version A, 30%

is version B, and 20% is version C Suppose that over the coming year forecasted total demand (in planning units) is for 10,400 units Once the production plan is disaggregated, what will the weekly forecast for version

A be (assume 52 weeks per year)?

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81 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 the available to promise for week 6?

A 50

B 6

C 300

D 100

E Cannot be determined without projected on-hand information

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

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ch11 Key

1 Aggregate planning is intermediate-range capacity planning that typically covers a time horizon of one to three months

FALSE

Aggregate planning covers the mid-term, typically two to 12 months

AACSB: Reflective Thinking

Blooms: Remember

Difficulty: Medium

Learning Objective: 11-01 Explain what aggregate planning is and how it is useful.

Stevenson - Chapter 11 #1

Topic Area: Introduction

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

This is the goal of aggregate planning

AACSB: Reflective Thinking

Blooms: Remember

Difficulty: Easy

Learning Objective: 11-01 Explain what aggregate planning is and how it is useful.

Stevenson - Chapter 11 #2

Topic Area: Introduction

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

FALSE

Aggregate planners are concerned with the quantity and timing of expected demand

AACSB: Reflective Thinking

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

TRUE

This is the domain of aggregate planning

AACSB: Reflective Thinking

Blooms: Remember

Difficulty: Easy

Learning Objective: 11-01 Explain what aggregate planning is and how it is useful.

Stevenson - Chapter 11 #4

Topic Area: Introduction

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

FALSE

Assigning work to specific machines or people is an example of detailed scheduling

AACSB: Reflective Thinking

Blooms: Remember

Difficulty: Medium

Learning Objective: 11-01 Explain what aggregate planning is and how it is useful.

Stevenson - Chapter 11 #5

Topic Area: Introduction

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

FALSE

The output is an aggregate production plan

AACSB: Reflective Thinking

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

overtime

FALSE

These are supply options

AACSB: Reflective Thinking

Blooms: Remember

Difficulty: Hard

Learning Objective: 11-02 Identify the variables decision makers have to work with in aggregate planning and some of the possible strategies they can use Stevenson - Chapter 11 #7

Topic Area: Introduction

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

FALSE

Promotions do not modify capacity

AACSB: Reflective Thinking

Blooms: Remember

Difficulty: Hard

Learning Objective: 11-02 Identify the variables decision makers have to work with in aggregate planning and some of the possible strategies they can use Stevenson - Chapter 11 #8

Topic Area: Introduction

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

FALSE

Aggregate planning can accommodate seasonal changes in demand

AACSB: Reflective Thinking

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

FALSE

Seasonality increases variation in requirements

AACSB: Reflective Thinking

Blooms: Remember

Difficulty: Medium

Learning Objective: 11-02 Identify the variables decision makers have to work with in aggregate planning and some of the possible strategies they can use Stevenson - Chapter 11 #10

Topic Area: Introduction

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

FALSE

Level and chase strategies are opposite approaches

AACSB: Reflective Thinking

Blooms: Remember

Difficulty: Easy

Learning Objective: 11-02 Identify the variables decision makers have to work with in aggregate planning and some of the possible strategies they can use Stevenson - Chapter 11 #11

Topic Area: Basic Strategies for Meeting Uneven Demand

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

TRUE

The chase strategy keeps inventories low

AACSB: Reflective Thinking

Blooms: Understand

Difficulty: Medium

Learning Objective: 11-02 Identify the variables decision makers have to work with in aggregate planning and some of the possible strategies they can use Stevenson - Chapter 11 #12

Topic Area: Basic Strategies for Meeting Uneven Demand

13 Linear programming models yield the optimal solution

TRUE

Linear programming models can find an optimal solution if one exists

AACSB: Reflective Thinking

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

TRUE

The task of aggregate planning is to strike a balance between demand and capacity at minimum cost

AACSB: Reflective Thinking

Blooms: Remember

Difficulty: Hard

Learning Objective: 11-02 Identify the variables decision makers have to work with in aggregate planning and some of the possible strategies they can use Stevenson - Chapter 11 #14

Topic Area: Basic Strategies for Meeting Uneven Demand

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

TRUE

Trial-and-error approaches can lead to good solutions

AACSB: Reflective Thinking

Blooms: Remember

Difficulty: Easy

Learning Objective: 11-03 Describe some of the graphical and quantitative techniques planners use.

Stevenson - Chapter 11 #15

Topic Area: Techniques for Aggregate Planning

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

FALSE

Such solutions may be good solutions, but they're usually not optimal

AACSB: Reflective Thinking

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17 Aggregate planners typically use mathematical techniques such as linear programming and linear decision rules for planning

FALSE

Both qualitative and quantitative approaches are used in aggregate planning

AACSB: Reflective Thinking

Blooms: Remember

Difficulty: Medium

Learning Objective: 11-03 Describe some of the graphical and quantitative techniques planners use.

Stevenson - Chapter 11 #17

Topic Area: Techniques for Aggregate Planning

18 Disaggregating an aggregate plan leads to a master schedule

TRUE

This is an output of the aggregate planning process

AACSB: Reflective Thinking

Blooms: Remember

Difficulty: Medium

Learning Objective: 11-01 Explain what aggregate planning is and how it is useful.

Stevenson - Chapter 11 #18

Topic Area: Disaggregating the Aggregate Plan

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

TRUE

Required start dates depend on products' lead times

AACSB: Reflective Thinking

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20 Departmental budgeting is an example of aggregate planning

TRUE

The challenge is to get requirements into balance with resources

AACSB: Reflective Thinking

Blooms: Remember

Difficulty: Easy

Learning Objective: 11-01 Explain what aggregate planning is and how it is useful.

Stevenson - Chapter 11 #20

Topic Area: Introduction

21 Master schedulers are employed primarily by service organizations

FALSE

Master schedulers are primarily employed in manufacturing

AACSB: Reflective Thinking

Blooms: Remember

Difficulty: Easy

Learning Objective: 11-05 Describe the master scheduling process and explain its importance.

Stevenson - Chapter 11 #21

Topic Area: Disaggregating the Aggregate Plan

22 Subcontracting 'in' would apply to periods in which our organization has excess capacity

TRUE

Subcontracting in would be selling some available capacity

AACSB: Reflective Thinking

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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

This is the ATP calculation for the first week

AACSB: Reflective Thinking

Blooms: Remember

Difficulty: Medium

Learning Objective: 11-05 Describe the master scheduling process and explain its importance.

Stevenson - Chapter 11 #23

Topic Area: The Master Scheduling Process

24 A time fence in the master schedule is used to prevent unauthorized people from making changes to the schedule

FALSE

Time fences are used to ensure that full consideration is given when schedule changes are being considered

AACSB: Reflective Thinking

Blooms: Remember

Difficulty: Medium

Learning Objective: 11-05 Describe the master scheduling process and explain its importance.

Stevenson - Chapter 11 #24

Topic Area: The Master Scheduling Process

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

After the first week, ATP values will only occur in periods in which there are MPS quantities

AACSB: Reflective Thinking

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