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One way of leveling a seasonal demand pattern is by developing complementary products or services.

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The primary concern with having a large positive capacity cushion is


A) reduced customer satisfaction due to the high level of backorders.
B) underutilization of facility capacity.
C) greater likelihood of stock-outs and lost sales.
D) keeping cost of running out in balance with the cost of excess capacity.

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Which of the following statements is true about facilities decisions?


A) They are generally short-range.
B) They are not critical because they determine only future availability of output.
C) They involve all organizational units and are often made at the highest corporate level.
D) They are simple and easy to analyze.

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A firm produces 12 different services and has capacity to service 360,000 customers per year.A total of 24 service workers are employed.If 270,000 customers receive service during a particular year,what is the capacity cushion during that year?


A) 25%.
B) 50%.
C) 75%.
D) There is not enough information to determine the answer.

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Which of the following fits with a preemptive facilities strategy?


A) Wait and see what competitors do, then seek to match or exceed their capacity.
B) Create a positive capacity cushion to stimulate the market.
C) Reduce risk by allowing capacity to lag the market by a small amount.
D) All of the above.

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Which of the following statement(s) correctly describes aggregate planning?


A) Aggregate planning is concerned with matching supply and demand of output.
B) Aggregate planning determines not only the output levels planned but also the appropriate resource mix to be used.
C) The aim of aggregate planning is to set overall output levels for the medium-range future.
D) All of the above.

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Correctly complete the following sentence.Aggregate planning typically


A) entails a planning horizon of about 12 months.
B) is an activity of matching supply with demand.
C) is done for a single, or a few, overall measures of output.
D) has all of the above features.

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In aggregate planning,


A) the concern is over a long-range planning horizon.
B) output levels are set in the face of certain demand.
C) "aggregate" implies that planning is done for a single overall measure of output or at most a few products.
D) firms should never consider overtime, hiring, firing, or subcontracting.

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There are four basic types of facility choices.Which of the following statements concerning facility choice is NOT true?


A) Process-focused facilities generally have one technology, or at most two, and usually produce components or parts that are shipped to other facilities for further processing or assembly.
B) Market-focused facilities are typically located in the markets they serve, commonly serving local customers, and are frequently service firms.
C) Demand-focused facilities are quickly constructed and have the ability to serve global markets with fast order response times as warranted by the nature of customer demand.
D) General-purpose facilities are commonly used by smaller companies and may produce several types of products and use several different processes.

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Which of the following statements best fits with the concept of a level aggregate planning strategy?


A) Results in a large amount of labor turnover at certain times of the year.
B) The rate of production output will be variable, depending on demand.
C) Changes in the workforce will absorb variations in demand.
D) None of the above.

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Assume you have been assigned the task of identifying a level strategy aggregate production plan for the coming year.You have been informed that beginning inventory is 0 units,your plan should provide an ending inventory for the year equal to 0 units,and you have been provided the following forecasts of aggregate demand.What should be the planned rate of quarterly production? Assume you have been assigned the task of identifying a level strategy aggregate production plan for the coming year.You have been informed that beginning inventory is 0 units,your plan should provide an ending inventory for the year equal to 0 units,and you have been provided the following forecasts of aggregate demand.What should be the planned rate of quarterly production?   A)  6,250 units B)  6,000 units C)  5,750 units D)  5,500 units


A) 6,250 units
B) 6,000 units
C) 5,750 units
D) 5,500 units

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It is possible in the short term for a firm to operate above 100% utilization.

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One option for altering the pattern of demand through aggregate planning is


A) using overtime.
B) carrying inventory.
C) subcontracting.
D) pricing.

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Aggregate planning differs from scheduling in that


A) the former refers to the long range and the latter refers to the short range.
B) the former is concerned with allocating available resources and the latter with the acquisition of resources.
C) the former refers to the long range and the latter refers to the medium range.
D) the former is concerned with the acquisition of resources and the latter with allocating available resources.

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Which of the following is NOT a factor affecting the elements of a facilities strategy?


A) Cost of facilities.
B) Likely behavior of competitors.
C) Business strategy.
D) Whether the company uses make-to-stock or assemble-to-order.

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Sales and operations planning is a stand-alone system that is used to match supply and demand using a cross-functional approach.

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If a facility has a utilization rate of 80%,and current output levels requires 3,328 hours annually,what is the facility's annual capacity?


A) 2,582 hours.
B) 3,785 hours.
C) 4,160 hours.
D) None of the above.

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C

A large capacity cushion is appropriate when


A) a make-to-stock process is used.
B) a firm is attempting to capture market share in a growing industry.
C) the market for its products or services is shrinking.
D) a firm wants its capacity to match average demand.

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B

Describe the most important questions to be answered concerning facilities decisions.Apply the questions to a fast-food restaurant chain with expanding demand.

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How large should each facility be? In a ...

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The aggregate planning problem


A) should consider only supply management options.
B) affects only marketing and production, but human resources are not involved in decisions.
C) should consider only demand management options.
D) needs to consider multiple trade-offs such as customer service level, inventory levels, labor force stability, and costs.

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D

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