P370 Final Exam Questions With Correct
Solutions.
Aggregate Production Planning Section
8 Questions:
6 Conceptual
2 Quantitative
Aggregate Production Planning (APP)
A managerial statement of time-phased production rates, workforce levels, and inventory investment,
which takes into account customer requirements and capacity limitations.
APP.....
Helps you attain in the best way possible the objective(s) set.
Characteristics of Aggregate Production Planning
1. Aggregate
2. Time Horizon
3. Time Buckets
4. Rolling Horizon
5. Nature of Business determines time breakdown
Aggregate
1. Classes of Products
2. Labor or other inputs
3. Geographic location of production
4. Often fictitious
Time Horizon
medium term
Time Buckets
divisions of horizons
Nature of Business determines time breakdown
typically one year with one months buckets
Lower Levels of Planning
1. Master Production Scheduling (MPS)
2. Material Requirements Planning (MRP)
3. Shop Floor Scheduling
Master Production Scheduling (MPS)
1. 1st level of disaggregation
2. Break-down into more real end-items
3. Typically Shorter time horizon (never longer) and finer buckets than APP
4. Typically implemented on rolling horizon
, 5. Formulated at lower organizational level than APP due to greater frequency of revision and greater
specificity.
Material Requirements Planning (MRP)
Extreme detail, down to each nut and bolt
Shop Floor Scheduling
detailed, actual production schedule
Three Pure Aggregate Plans:
To meet changes in demand
1. Chase
2. Level
3. Stable Workforce
Characteristics of Three Pure Aggregate Plans
1. Are three generic strategies that represent extremes on a continuum.
2. Most commonly companies implement plans that fall in the middle of these strategies
Chase
production and manpower fluctuate
Level
constant workforce/production level with fluctuating inventory levels
Stable Workforce
Size of workforce is constant, but number of hours worked fluctuate
Level Plan Without Backorders
1. Level plan with minimum inventory and no backorders
2. Key point: in one of six months ending inventory will be zero. (If it never falls to zero, we are
keeping more inventory than needed)
3. Solution: solve 6 level plans (for each month?) - each plan has zero ending inventory in one of the
six months. Highest production level is solution.
Determinants of Time Horizon and Buckets
Development and Variability. An industry with rapid new product development and high variability
will typically have a shorter horizon with short time buckets. But industries with long lead times and
stable products will often have longer planning horizons and/or longer time buckets.
Rolling Horizon
we do not wait for entire plan to have been executed to develop a new one. For example if a 1 year
plan is divided into 1-month time buckets at the end of 1st time bucket the remaining 11 are
evaluated and a new one bucket is added.
Inventory Section
Solutions.
Aggregate Production Planning Section
8 Questions:
6 Conceptual
2 Quantitative
Aggregate Production Planning (APP)
A managerial statement of time-phased production rates, workforce levels, and inventory investment,
which takes into account customer requirements and capacity limitations.
APP.....
Helps you attain in the best way possible the objective(s) set.
Characteristics of Aggregate Production Planning
1. Aggregate
2. Time Horizon
3. Time Buckets
4. Rolling Horizon
5. Nature of Business determines time breakdown
Aggregate
1. Classes of Products
2. Labor or other inputs
3. Geographic location of production
4. Often fictitious
Time Horizon
medium term
Time Buckets
divisions of horizons
Nature of Business determines time breakdown
typically one year with one months buckets
Lower Levels of Planning
1. Master Production Scheduling (MPS)
2. Material Requirements Planning (MRP)
3. Shop Floor Scheduling
Master Production Scheduling (MPS)
1. 1st level of disaggregation
2. Break-down into more real end-items
3. Typically Shorter time horizon (never longer) and finer buckets than APP
4. Typically implemented on rolling horizon
, 5. Formulated at lower organizational level than APP due to greater frequency of revision and greater
specificity.
Material Requirements Planning (MRP)
Extreme detail, down to each nut and bolt
Shop Floor Scheduling
detailed, actual production schedule
Three Pure Aggregate Plans:
To meet changes in demand
1. Chase
2. Level
3. Stable Workforce
Characteristics of Three Pure Aggregate Plans
1. Are three generic strategies that represent extremes on a continuum.
2. Most commonly companies implement plans that fall in the middle of these strategies
Chase
production and manpower fluctuate
Level
constant workforce/production level with fluctuating inventory levels
Stable Workforce
Size of workforce is constant, but number of hours worked fluctuate
Level Plan Without Backorders
1. Level plan with minimum inventory and no backorders
2. Key point: in one of six months ending inventory will be zero. (If it never falls to zero, we are
keeping more inventory than needed)
3. Solution: solve 6 level plans (for each month?) - each plan has zero ending inventory in one of the
six months. Highest production level is solution.
Determinants of Time Horizon and Buckets
Development and Variability. An industry with rapid new product development and high variability
will typically have a shorter horizon with short time buckets. But industries with long lead times and
stable products will often have longer planning horizons and/or longer time buckets.
Rolling Horizon
we do not wait for entire plan to have been executed to develop a new one. For example if a 1 year
plan is divided into 1-month time buckets at the end of 1st time bucket the remaining 11 are
evaluated and a new one bucket is added.
Inventory Section
