MQM 227 Exam 2 with Verified Answers
1. Which of the following statements is incorrect?
a. Aggregate planning involves planning at a specific product/service level not a product family
level.
b. Scheduling decisions allocate available capacity or resources (equipment, labor, and space) to
jobs for a given period of time.
c. Aggregate planning seeks to determine the resources needed while scheduling allocates the
resources made available through aggregate planning in the best manner to meet operational
objectives.
d. Aggregate planning is done on a time frame of about one year; scheduling is done on a time
frame of a few months, weeks, or hours. —Answer: a. Aggregate planning involves planning at
a specific product/service level not a product family level.
2. Which of the following statements is incorrect?
a. The purpose of forecast accuracy is to determine when the forecasting method is no longer
tracking actual demand and should be reset.
b. Forecasting is only used to predict future events.
c. Through planning, we consciously attempt to alter future events.
d. Whenever demand is not constrained by capacity, inventory, or other management policies;
the forecasting of demand should be the same as the forecasting of sales.
e. The purpose of forecast accuracy is to monitor predictable demand observations or outliers
(which should be carefully evaluated and perhaps excluded from data analysis). —Answer: e.
The purpose of forecast accuracy is to monitor predictable demand observations or outliers
(which should be carefully evaluated and perhaps excluded from data analysis).
3. Which of the following statements is incorrect?
a. Batch and job shop processes generally have even lower utilization.
b. Assembly-line processes may set planned utilization at 80% to allow for flexibility to meet
unexpected demand.
c. In considering economies of scale, larger facilities are generally more economical because
fixed costs can be spread over more units of production.
d. A product-focused facility produces one family or type of product or service.
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, e. In considering economies of scale, larger facilities are generally more economical because the
cost of buildings and equipment increases linearly with volume. —Answer: e. In considering
economies of scale, larger facilities are generally more economical because the cost of buildings
and equipment increases linearly with volume.
4. Which of the following options is not listed as a method of adding capacity to bottlenecks?
a. adding machine time (e.g., coverage during breaks)
b. reducing setup time
c. subcontracting
d. using different equipment if equally efficient —Answer: d. using different equipment if
equally efficient
5. Which of the following statements is incorrect?
a. A project is a permanent endeavor undertaken to create a unique product or service.
b. Large objects such as ships, buildings, and custom-made equipment are manufactured on a
project basis.
c. A project completion date and intermediate milestones are frequently established at the
outset.
d. The budget might impact the schedule if the company has a tight budget and is unwilling to
pay additional money to expedite critical components of the project. —Answer: a. A project is a
permanent endeavor undertaken to create a unique product or service.
6. Which of the following statements is incorrect?
a. Human resource planning is greatly affected by aggregate planning because planning for
future production can result in hiring, layoffs, training, and overtime decisions.
b. Demand management entails modifying or influencing demand by differential pricing which
is often used to reduce peak demand or to build up demand in off-peak periods.
c. Demand management entails modifying or influencing demand by using advertising and
promotion to stimulate and/or smooth out demand.
d. Demand management entails modifying or influencing demand by using backlogs
(customers waiting for late orders).
e. An aggregate plan should be the basis for final budget development and for budget revisions
as conditions warrant. —Answer: e. An aggregate plan should be the basis for final budget
development and for budget revisions as conditions warrant.
7. Which of the following statements is incorrect?
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1. Which of the following statements is incorrect?
a. Aggregate planning involves planning at a specific product/service level not a product family
level.
b. Scheduling decisions allocate available capacity or resources (equipment, labor, and space) to
jobs for a given period of time.
c. Aggregate planning seeks to determine the resources needed while scheduling allocates the
resources made available through aggregate planning in the best manner to meet operational
objectives.
d. Aggregate planning is done on a time frame of about one year; scheduling is done on a time
frame of a few months, weeks, or hours. —Answer: a. Aggregate planning involves planning at
a specific product/service level not a product family level.
2. Which of the following statements is incorrect?
a. The purpose of forecast accuracy is to determine when the forecasting method is no longer
tracking actual demand and should be reset.
b. Forecasting is only used to predict future events.
c. Through planning, we consciously attempt to alter future events.
d. Whenever demand is not constrained by capacity, inventory, or other management policies;
the forecasting of demand should be the same as the forecasting of sales.
e. The purpose of forecast accuracy is to monitor predictable demand observations or outliers
(which should be carefully evaluated and perhaps excluded from data analysis). —Answer: e.
The purpose of forecast accuracy is to monitor predictable demand observations or outliers
(which should be carefully evaluated and perhaps excluded from data analysis).
3. Which of the following statements is incorrect?
a. Batch and job shop processes generally have even lower utilization.
b. Assembly-line processes may set planned utilization at 80% to allow for flexibility to meet
unexpected demand.
c. In considering economies of scale, larger facilities are generally more economical because
fixed costs can be spread over more units of production.
d. A product-focused facility produces one family or type of product or service.
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, e. In considering economies of scale, larger facilities are generally more economical because the
cost of buildings and equipment increases linearly with volume. —Answer: e. In considering
economies of scale, larger facilities are generally more economical because the cost of buildings
and equipment increases linearly with volume.
4. Which of the following options is not listed as a method of adding capacity to bottlenecks?
a. adding machine time (e.g., coverage during breaks)
b. reducing setup time
c. subcontracting
d. using different equipment if equally efficient —Answer: d. using different equipment if
equally efficient
5. Which of the following statements is incorrect?
a. A project is a permanent endeavor undertaken to create a unique product or service.
b. Large objects such as ships, buildings, and custom-made equipment are manufactured on a
project basis.
c. A project completion date and intermediate milestones are frequently established at the
outset.
d. The budget might impact the schedule if the company has a tight budget and is unwilling to
pay additional money to expedite critical components of the project. —Answer: a. A project is a
permanent endeavor undertaken to create a unique product or service.
6. Which of the following statements is incorrect?
a. Human resource planning is greatly affected by aggregate planning because planning for
future production can result in hiring, layoffs, training, and overtime decisions.
b. Demand management entails modifying or influencing demand by differential pricing which
is often used to reduce peak demand or to build up demand in off-peak periods.
c. Demand management entails modifying or influencing demand by using advertising and
promotion to stimulate and/or smooth out demand.
d. Demand management entails modifying or influencing demand by using backlogs
(customers waiting for late orders).
e. An aggregate plan should be the basis for final budget development and for budget revisions
as conditions warrant. —Answer: e. An aggregate plan should be the basis for final budget
development and for budget revisions as conditions warrant.
7. Which of the following statements is incorrect?
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