Aggregate Planning

Question 1

What is the primary focus of aggregate planning?

Answer 1

To balance supply and demand over a specific period of time

Aggregate planning is essential for ensuring that an organization can meet customer demand while minimizing costs.

Question 2

List three variables in aggregate planning strategies.

Answer 2

• Capacity options
• Demand options
• Inventory levels

These variables help organizations to effectively manage their production and workforce.

Question 3

What are capacity options for managing an aggregate plan?

Answer 3

• Overtime or idle time
• Contract or part-time workers
• Employing/dismissing workers

These options allow organizations to adjust their workforce and production capacity based on demand.

Question 4

What demand options can be utilized in aggregate planning?

Answer 4

• Influence demand
• Backlogs/back ordering
• Different pricing strategies
• Creating new demand

These strategies help organizations manage customer demand effectively.

Question 5

What is one strategy for managing uneven demand?

Answer 5

Adjusting production levels or workforce size

This strategy helps to align production capacity with fluctuating demand.

Question 6

What costs are prevalent in aggregate planning?

Answer 6

• Labor costs
• Inventory holding costs
• Stockout costs

Understanding these costs is crucial for effective aggregate planning.

Question 7

True or False: Aggregate planning strategies have both advantages and disadvantages.

Answer 7

True

Each strategy has its own benefits and drawbacks that must be considered.

Question 8

What factors should be considered when choosing an aggregate planning strategy?

Answer 8

• Demand variability
• Capacity constraints
• Cost implications

These factors help determine the most appropriate strategy for an organization.

Question 9

What are two aggregate planning methods?

Answer 9

• Chase demand strategy
• Level production strategy

These methods represent different approaches to aligning production with demand.

Question 10

How does aggregate planning differ in a service environment compared to manufacturing?

Answer 10

It often focuses more on managing capacity and customer interaction

Service environments require different considerations due to the intangible nature of services.

Question 11

Fill in the blank: Aggregate planning aims to balance _______ and _______.

Answer 11

[supply], [demand]

This balance is critical for operational efficiency.