OPS MODULE 6 Flashcards
It is an intermediate-range capacity planning that typically covers a time horizon of 2 to 18 months
Aggregate planning
Aggregate planning typically covers a time horizon of __ to __ months
2 to 18 months
T or F: Aggregate planning is useful for organizations that do not experience seasonal, or other variations of demand
False (experience instead of do not experience)
T or F: The goal of aggregate planning is to achieve a production plan that will effectively utilize the organization’s to satisfy the demand
True
In the planning sequence, ______ establishes operations and capacity strategies
business plan
In the planning sequence, ______ operations capacity
Aggregate plan
In the planning sequence, ______ establishes schedules for specific products
Master schedule
In the planning sequence all of the following are the first step except for:
A. Corporate Strategies and Policies
B. Economic, Competitive, and Political Conditions
C. Master Schedule
D. Aggregate Demand Forecasts
E. None of the above
C. Master Schedule
T or F: It takes time to implement plans
True
T or F: Aggregation is important because it is possible to predict with accuracy the timing and volume of demand for individual items
False (it is not possible instead of possible)
Why do organizations need to aggregate planning?
- Planning
- Strategic
- It is connected to the _________
- It can help synchronize flow throughout the _________; it affects costs, equipment utilization; employment levels and customer satisfaction
budgeting process ; supply chain
T or F: In aggregation, the plan must be in units of measurement that can only be understood by the firm’s operations personnel
- Aggregate units of output per month
- Dollar value of total monthly output
- Total output by factory
- Measures that relate to capacity such as labor hours
False (dapat maintindihan din ng mga non-operations personnel)
In dealing with variation, most organizations use rolling _, _, _, and _ month forecasts
3 6 9 12
T or F: Forecasts are updated yearly, rather than relying on periodical forecast
False (Forecasts are updated PERIODICALLY, rather than relying on ONCE-A-YEAR forecast)
T or F: Updating forecasts periodically allow planners to take into account any changes in either expected demand or expected supply and to develop revised plans
True
T or F: In strategies to counter variation, we should maintain a unlimited amount of excess capacity to handle increases in demand
False (certain amount only)
In strategies to counter variation, we maintain a degree of flexibility in dealing with changes by:
- Hiring temporary workers
- Using overtime
T or F: We should immediately commit to a certain level of capacity as a strategy to counter variation
False (We wait as long as possible before committing)
T or F: We should schedule products or services with known supplies first
False (demand instead of supply)
T or F: We wait to schedule other products until their demands become less uncertain
True
Overview of Aggregate Planning
- Forecast of aggregate demand for the _______ range
- Develop a general plan to meet _____ requirements
- Update the aggregate plan ______
intermediate ; demand ; periodically
Aggregate planners are concerned with the ________ and __________
demand quantity ; timing of demand
T or F: If demand exceeds capacity, attempt to achieve balance by
altering capacity, demand, or both
True
T or F: Even if demand and capacity are unequal, planners
still often have to deal with equal demand within the planning
period
False (Even if demand and capacity are approximately equal, planners
still often have to deal with unequal demand within the planning
period
The following are aggregate planning inputs except for:
A. Resources (workforce/production rates & facilities and equipment)
B. Demand Forecast
C. Costs (inventory carrying, back orders, hiring/firing, overtime, inventory changes, subcontracting)
D. Projected levels of (inventory, employment, subcontracting, backordering)
E. Policies
F. None of the above
D. Projected levels of (inventory, employment, subcontracting, backordering) sa output ito
What are the outputs of aggregate planning?
- Total cost of a plan
- Projected levels of: inventory, output, employment, subcontracting, backordering)
Whare the three aggregate planning strategies?
PRM
- Proactive (altering demand to match capacity)
- Reactive (altering capacity to match demand)
- Mixed
T or F: In pricing, it is used to shift demand from off-peak to peak periods
False (peak to off-peak)
________ is important in pricing
Price elasticity
It is the advertising and other forms to promote
Promotion
_______ are orders taken in one period and deliveries promised for a later period
Back orders
T or F: New demand is one of the demand options
True
All of the following are supply options except for:
A. Back order
B. Hire and layoff workers
C. Overtime/slack time
D. Part-time workers
E. Inventories
F. Subcontracting
G. None of the above
A. Back order
Prominent Aggregate Planning Strategies:
- Maintain a level ______
- Maintain a _____ output rate
- Match demand _____ by _____
- Use a combination of ________ variables
workforce ; steady ; period by period ; decision
Techniques for Aggregate Planning
General Procedure:
1. Determine _____ for each period
2. Determine _____ for each period
3. Identify ________ or ______ policies that are pertinent
4. Determine unit _______
5. Develop alternative _____ and _____
6. Select the plan that best satisfies ______
- demand
- capacities
- company or departmental
- costs
- plans and costs
It is an aggregate planning pure strategy that involves maintaining a steady rate of regular-time output while meeting variations in demand by a combination of options:
- Inventories, overtime, part-time workers, subcontracting, and back orders
Level capacity strategy
T or F: In level approach, capacities keep changing over the planning horizon
False (capacities are kept constant)
T or F: The advantage of a level approach is stable output rates and workforce
True
The disadvantages of level approach are the following except for:
A. Greater inventory costs
B. Increased overtime and idle time
C. Resource utilization vary overtime
D. None of the above
D. None of the above
It is an aggregate planning pure strategy that matches capacity to demand; the planned output for a period is set at the expected demand for that period
Chase demand strategy
T or F: In chase approach, capacities are maintained to match demand requirements over the planning horizon
False (adjusted not maintained)
The advantages of chase approach is that the ___________ is low and _______ is high
- Investment in inventory
- Labor utilization
T or F: The disadvantages of the chase approach is that the cost of adjusting output rates and/or workforce levels
True
It is a mathematical technique and computerized model that can be tested under different scenarios to identify acceptable solutions to problems
Simulation models
What are the two mathematical techniques that can be used in aggregate planning?
Linear programming models
Simulation models
______ approaches consist of developing simple table or graphs that enables planners to visually compare projected demand requirements with existing capacity
Trial-and-error
T or F: In trial-and-error techniques, alternatives are compared based on their initial costs
False: Total
T or F: Trial-and-error approach necessarily result in an optimal aggregate plan
False (does not result)
Aggregate planning is used in ________ to allocate funds, staff, and supplies to meet the
demands of patients for their medical services
Hospitals
Aggregate planning in high-volume business like _______ is directed toward smoothing the service rate, determining workforce size, and managing
demand to match a fixed capacity. Can use inventory; however, it is perishable
Restaurants
Aggregate planning in ________ is complex due to the number of factors involved. Capacity decisions must take into account the percentage of seats to be allocated to various fare classes in order to maximize profit or yield
Airlines
It is an approach to maximizing revenue by using a strategy of variable pricing; prices are set relative to capacity availability. It is also used by airlines, restaurants, and hotels
Yield management
In yield management:
During periods of _____ demand; price discounts are offered
During periods of _____ demand, higher prices are charged
- low
- peak
What is the flow of disagreggation?
Aggregate plan -> disaggregation -> master schedule
It is the result of disaggregating an aggregate plan and shows quantity and timing of specific end items for a scheduled horizon
Master schedule
It is the heart of production planning and control and determines the quantity needed to meet demand from all sources.
It interfaces with:
- Marketing
- Capacity planning
- Production planning
- Distribution planning
Master scheduling
T or F: Master scheduling provides senior management with the ability to determine whether the business plan and its strategic objectives will be disregarded
False (achieved not disregarded)
What are the inputs in a master scheduling process?
BFC
-Beginning Inventory
-Forecast
-Customer Order
Which of the following is NOT an output of master scheduling proces?
A. Projected inventory
B. Master production schedule
C. Committed inventory
D. None of the above
C. Committed Inventory (should be uncommitted)
T or F: There is no need to validate a tentative master production schedule (MPS)
False (It must be validated)
It is a tool used in the validation process of a master production schedule (MPS)
Rough cut capacity planning (RCCP)
T or F: Rough cut capacity planning (RCCP) is the approximate balancing of capacity and demand to test the infeasibility of a master schedule
False (feasibility not infeasibility)
Rough cut capacity planning (RCCP) involves checking the capacities of production and warehouse facilities, labor, and vendors to ensure no ______ exist that will render the MPS unworkable
gross deficiencies
