Demand Planning: Forecasting And Demand Management

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Questions Bank

Introduction to Managing Operations Across the Supply Chain
Operations and Supply Chain Strategy
Managing Processes and Capacity
Extension : A Supplement: Process Mapping and Analysis
Productprocess Innovation
Manufacturing and Service Process Structures
Managing Quality
Extension: A Supplement: Quality Improvement Tools
Managing Inventories
Lean Systems
Customer Service Management
Sourcing and Supply Management
Logistics Management
Demand Planning: Forecasting and Demand Management
Sales and Operations Planning
Materials and Resource Requirements Planning
Project Management
Extension : A Supplement: Advanced Methods for Project Scheduling
Sustainable Operations Managementpreparing for the Future

All Questions

Question 1

Free

Multiple Choice

Generally speaking, the sales function and operations function differ in objectives.Which of the following is NOT one of those differences?

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Sales prefers detailed forecasts for setting bonuses, operations prefers aggregate forecasts.

Sales prefers many product variations, operations prefers few variations.

Sales emphasizes revenue, operations emphasizes cost minimization.

Sales prefers rapid response, operations prefers stable production schedules.

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Question 2

Free

Multiple Choice

Decisions being made about the aggregate production plans represent what type of planning?

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Strategic level planning

Tactical planning

Detailed operational planning

Long-term planning

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Question 3

Free

Multiple Choice

Which of the following is true concerning sales and operations planning?

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Once the plan is finalized, it should not be changed during the planning period.

There is a specific set of steps all firms should follow in the sales and operations planning process.

A benefit of the process is that the firm should achieve high service levels with lower inventory.

By keeping the schedule stable, production can be optimized.

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Question 4

Free

Multiple Choice

Each month the sales and operations team at Johnson Company meets to develop plans for each of the next six months.This process is known as:

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Collaborative planning and forecasting.

Rolling planning horizons.

Unconstrained planning.

Continuous planning.

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Question 5

Free

Multiple Choice

The focus of an aggregate production plan, in general, is on all of the following EXCEPT:

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The intermediate-term future rather than the very short-term future.

Product lines rather than specific items.

Facilities and capital equipment rather than labor and inventory.

Inventory levels rather than new plants.

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Question 6

Multiple Choice

Which of the following is NOT one of the costs considered in aggregate production planning?

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Subcontracting cost.

Capital equipment cost.

Inventory cost.

Firing (layoff) cost.

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Question 7

Multiple Choice

If a make-to-stock manufacturing firm with highly seasonal demand follows a chase demand strategy, which of the following is likely to be true?

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Inventory will fluctuate significantly during the year.

The production rate must be set equal to the demand in the heaviest demand period, and it must stay at that level all year.

It will be easy to keep the workforce size stable.

The firm likely will have higher capital investment than if it followed a level plan.

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Question 8

Multiple Choice

If a company strongly prefers that its aggregate output plan be closer to a level plan than a chase plan, this implies that it is concerned about minimizing:

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Inventory carrying costs.

Hiring and layoff costs.

Cost of subcontracting.

Overtime cost

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Question 9

Multiple Choice

If a make-to-stock manufacturing firm with highly seasonal demand follows a level production strategy, which of the following is likely to be true?

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Inventory will fluctuate significantly during the year.

The production rate must be set equal to the demand in the heaviest demand period, and stay at that level all year.

It will be difficult to keep the workforce size stable.

The firm must make sure that its maximum capacity is at least as high as the heaviest demand period.

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Question 10

Multiple Choice

Zanda Corp.and Jones Corp.are identical in every way (products produced, costs, demand, etc.) except for one.Zanda uses a level production plan while Jones prefers a chase production plan.Which of the following is most likely to be true?

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Zanda will have higher investment in plant and equipment.

Zanda will have higher hiring and firing costs.

Zanda will have higher inventory carrying costs.

Zanda will have lower total production costs.

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Question 11

Multiple Choice

Zanda Corp.and Jones Corp.are identical in every way (products produced, costs, demand, etc.) except for one.Zanda uses a level production plan while Jones prefers a chase production plan.Which of the following is most likely to be true?

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Jones will have higher investment in plant and equipment.

Jones will have higher hiring and firing costs.

Jones will have lower inventory carrying costs.

All of the selections are true.

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Question 12

Multiple Choice

Which type of aggregate production plan is likely to have the LEAST negative impact on the local community and the workforce?

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Chase plan with hiring and firing

Chase plan with overtime

Level plan

The plans do not differ in their impact on the local community and the workforce.

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Question 13

Multiple Choice

Jones Corporation is preparing an aggregate production plan for washers for the next four quarters.The company's expected quarterly demand is given in the following chart.The company will have 1,000 washers in inventory at the beginning of the year and wishes to maintain at least that number at the end of each quarter.Following is other critical data: Production cost per unit = $250
Inventory carrying cost per quarter per unit = $10 (based on quarter-ending inventory) Hiring cost per worker = $1,000
Firing cost per worker = $2,000 Beginning number of workers = 10
Each worker can produce 100 units per quarter.
Any worker on the staff at the end of the year will not be fired at that time.
If Jones prefers a level plan, what will be the regular production rate per quarter?

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5,000 units

4,000 units

6,000 units

Regular production will vary each month.

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Question 14

Multiple Choice

Jones Corporation is preparing an aggregate production plan for washers for the next four quarters.The company's expected quarterly demand is given in the following chart.The company will have 1,000 washers in inventory at the beginning of the year and wishes to maintain at least that number at the end of each quarter.Following is other critical data: Production cost per unit = $250
Inventory carrying cost per quarter per unit = $10 (based on quarter-ending inventory) Hiring cost per worker = $1,000
Firing cost per worker = $2,000 Beginning number of workers = 10
Each worker can produce 100 units per quarter.
Any worker on the staff at the end of the year will not be fired at that time.
Given this data, what is the inventory carrying cost of a LEVEL plan?

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$100,000

$700,000

$70,000

$7,000

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Question 15

Multiple Choice

Jones Corporation is preparing an aggregate production plan for washers for the next four quarters.The company's expected quarterly demand is given in the following chart.The company will have 1,000 washers in inventory at the beginning of the year and wishes to maintain at least that number at the end of each quarter.Following is other critical data: Production cost per unit = $250
Inventory carrying cost per quarter per unit = $10 (based on quarter-ending inventory) Hiring cost per worker = $1,000
Firing cost per worker = $2,000 Beginning number of workers = 10
Each worker can produce 100 units per quarter.
Any worker on the staff at the end of the year will not be fired at that time.
Given this data, what is the total cost of a LEVEL plan?

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$5,000,000

$5,140,000

$5,110,000

$5,740,000

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Question 16

Multiple Choice

Zanda Corporation is preparing an aggregate production plan for its product for the next four months.The company's expected monthly demand is given in the following chart.The company will have 100 units in inventory at the beginning of the month and wishes to maintain at least 100 units at the end of each month.Following is other critical data: Production cost per unit = $125
Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $50
Firing cost per worker = $100 Beginning number of workers = 25
Each worker can produce 25 units per month.
The total inventory carrying cost of a chase plan is:

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$6,000

$4,000

$5,000

$4,500

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Question 17

Multiple Choice

Zanda Corporation is preparing an aggregate production plan for its product for the next four months.The company's expected monthly demand is given in the following chart.The company will have 100 units in inventory at the beginning of the month and wishes to maintain at least 100 units at the end of each month.Following is other critical data: Production cost per unit = $125
Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $50
Firing cost per worker = $100 Beginning number of workers = 25
Each worker can produce 25 units per month.
What is the total cost of a CHASE plan (using hiring/firing)?

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$379,800

$379,000

$381,100

$380,300

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Question 18

Multiple Choice

Wiedmer Corporation is preparing an aggregate production plan for widgets for the next four months.The company's expected monthly demand is given in the following chart.The company will have 50 widgets in inventory at the beginning of the first month and wishes to maintain at least that number at the end of each month.Following is other critical data: Production cost per unit = $50
Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $300
Firing cost per worker = $200 Beginning number of workers = 16
Each worker can produce = 50 units per month.LEVEL PLAN
What is the regular monthly actual production for a level plan?

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800

1,000

1,250

1,500

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Question 19

Multiple Choice

Wiedmer Corporation is preparing an aggregate production plan for widgets for the next four months.The company's expected monthly demand is given in the following chart.The company will have 50 widgets in inventory at the beginning of the first month and wishes to maintain at least that number at the end of each month.Following is other critical data: Production cost per unit = $50
Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $300
Firing cost per worker = $200 Beginning number of workers = 16
Each worker can produce = 50 units per month.LEVEL PLAN
What is the total inventory carrying cost for the level plan?

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$6,000

$8,000

$6,500

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Question 20

Multiple Choice

Wiedmer Corporation is preparing an aggregate production plan for widgets for the next four months.The company's expected monthly demand is given in the following chart.The company will have 50 widgets in inventory at the beginning of the first month and wishes to maintain at least that number at the end of each month.Following is other critical data: Production cost per unit = $50
Inventory carrying cost per month per unit = $10 (based on ending month inventory) Hiring cost per worker = $300
Firing cost per worker = $200 Beginning number of workers = 16
Each worker can produce = 50 units per month.LEVEL PLAN
What is the total cost of the level plan?

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$250,000

$260,700

$252,700

$258,000

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