Suggested Problems:
Chapter 13:
Discussion Questions:
1. Define aggregate planning.
2. Explain what the term aggregate in “aggregate planning” means.
4. Define chase strategy.
5. What is a pure strategy? Provide a few examples.
6. What is level scheduling? What is the basic philosophy underlying it?
7. Define mixed strategy. Why would a firm use a mixed strategy instead of a simple pure strategy?
, Problems:
1. Prepare a graph of the monthly forecasts and average forecasted demand for Industrial Air Corp.,
a manufacturer of a variety of large air conditioners for commercial applications.
3. The president of Hill Enterprises, Terri Hill, projects the firm’s aggregate demand requirements over
the next eight months as follows:
Her operations manager is considering a new plan, which begins in January with 200 units on hand.
Stockout cost of lost sales is $100 per unit. Inventory holding cost is $20 per unit per month. Ignore any
idle-time costs. The plan is called Plan A.
Plan A: Vary the workforce level to execute a “chase” strategy by producing the quantity demanded in the
prior month. The December demand and rate of production are both 1600 units per month. The cost of
hiring additional workers is $5000 per 100 units. The cost of laying off workers is $7500 per 100 units.
Evaluate this plan.
Chapter 13:
Discussion Questions:
1. Define aggregate planning.
2. Explain what the term aggregate in “aggregate planning” means.
4. Define chase strategy.
5. What is a pure strategy? Provide a few examples.
6. What is level scheduling? What is the basic philosophy underlying it?
7. Define mixed strategy. Why would a firm use a mixed strategy instead of a simple pure strategy?
, Problems:
1. Prepare a graph of the monthly forecasts and average forecasted demand for Industrial Air Corp.,
a manufacturer of a variety of large air conditioners for commercial applications.
3. The president of Hill Enterprises, Terri Hill, projects the firm’s aggregate demand requirements over
the next eight months as follows:
Her operations manager is considering a new plan, which begins in January with 200 units on hand.
Stockout cost of lost sales is $100 per unit. Inventory holding cost is $20 per unit per month. Ignore any
idle-time costs. The plan is called Plan A.
Plan A: Vary the workforce level to execute a “chase” strategy by producing the quantity demanded in the
prior month. The December demand and rate of production are both 1600 units per month. The cost of
hiring additional workers is $5000 per 100 units. The cost of laying off workers is $7500 per 100 units.
Evaluate this plan.
