MQM 227 Exam 2QUESTIONS AND CORRECT 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. - ✔✔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). - ✔✔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.
e. In considering economies of scale, larger facilities are generally more economical because the cost of
buildings and equipment increases linearly with volume. - ✔✔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 - ✔✔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. - ✔✔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. - ✔✔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?
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. - ✔✔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). - ✔✔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.
e. In considering economies of scale, larger facilities are generally more economical because the cost of
buildings and equipment increases linearly with volume. - ✔✔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 - ✔✔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. - ✔✔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. - ✔✔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?
