1. Which of the following statements regarding aggregate planning is true?
A) In a pure level strategy, production rates or work force levels are adjusted to match demand requirements over the planning horizon.
B) A pure level strategy allows lower inventories when compared to pure chase and hybrid strategies.
C) In a mixed strategy, there are changes in both inventory and in work force and production rate over the planning horizon.
D) Because service firms have no inventory, the pure chase strategy does not apply.
E) All of the above are true.
2. The planning tasks associated with staffing, production, inventory, and sub-contracting levels typically fall under
A) Short-range plans
B) intermediate-range plans
C) Long-range plans
D) Demand options
E) Strategic planning
3. A firm's demand in the next four quarters (its aggregate planning horizon) is forecast to be 80, 50, 40, and 90 units. Last quarter, the firm produced 60 units. If it uses level scheduling, the firm will
A) Hire workers to permit production of 65 units per quarter for the next four quarters
B) Hire 20 workers
C) Have an increase in inventory of 20 units in the next quarter
D) Have a decrease in inventory of 5 units in the next quarter
E) Change its workforce each quarter so that inventory does not change
4. A firm practices the pure chase strategy. Production last quarter was 1000. Demand over the next four quarters is estimated to be 900, 700, 1000, and 1000. Hiring cost is $20 per unit, and firing cost is $5 per unit. Over the next year, the sum of hiring and layoff costs will be
A) $500
B) $2,500
C) $7,500
D) $7,000
E) $12,500
5. A manager is applying the transportation model of linear programming to solve an aggregate planning problem. Demand in period 1 is 100 units and in period 2 demands are 150 units. The manager has 125 hours of regular employment available for $10/hour each period. In addition, 50 hours of overtime are available for $15/hour each period. If holding costs are $2 per unit each period, how many hours of regular employment should be used in period 1 (assume demand must be met in both periods 1 and 2 for the lowest possible cost and that production is 1 unit per hour)?
A) 100
B) 125
C) 150
D) 50
E) None of the above
6. Yield management is most likely to be used in which one of the following situations?
A) A fast food restaurant with wide demand fluctuations during the day
B) A dental clinic that wants to fill its appointment book
C) A firm with a good counter seasonal product mix
D) A shipping company that can change its fleet size easily
E) An airline attempting to fill "perishable" seats at maximum revenue