Aggregate Planning Options Quiz

What is an advantage of changing inventory levels as an aggregate planning option?

• No abrupt production changes

• Avoids the costs of other alternatives

• Matches seasonal fluctuations without hiring/training costs

• Permits flexibility and smoothing of the firm’s output

What is a disadvantage of varying workforce size by hiring or layoffs as an aggregate planning option?

• Loss of quality control; reduced profits; loss of future business

• Overtime premiums; tired workers; may not meet demand

• Hiring, layoff, and training costs may be significant

• Inventory holding cost may increase

What is a disadvantage of varying production rates through overtime or idle time as an aggregate planning option?

• Changes in human resources are gradual or none; no abrupt production changes

• Hiring, layoff, and training costs may be significant

• Overtime premiums; tired workers; may not meet demand

• Loss of quality control; reduced profits; loss of future business

What is an advantage of sub-contracting as an aggregate planning option?

• Permits flexibility and smoothing of the firm’s output

• Matches seasonal fluctuations without hiring/training costs

• Avoids the costs of other alternatives

• No abrupt production changes

What is a disadvantage of using part-time workers as an aggregate planning option?

• High turnover/training costs; quality suffers; scheduling difficult

• Overtime premiums; tired workers; may not meet demand

• Hiring, layoff, and training costs may be significant

• No abrupt production changes

What is an advantage of influencing demand as an aggregate planning option?

• No abrupt production changes

• Hiring, layoff, and training costs may be significant

• Creates marketing ideas. Overbooking used in some businesses

• Matches seasonal fluctuations without hiring/training costs

What is a disadvantage of back ordering during high-demand periods as an aggregate planning option?

• Inventory holding cost may increase

• Customer must be willing to wait, but goodwill is lost

• Hiring, layoff, and training costs may be significant

• Overtime premiums; tired workers; may not meet demand

What is an advantage of counter-seasonal product and service mixing as an aggregate planning option?

• Fully utilizes resources; allows stable workforce

• Matches seasonal fluctuations without hiring/training costs

• Avoids the costs of other alternatives

• No abrupt production changes

What is a critical factor in aggregate planning for services?

• Avoids the costs of other alternatives

• Matches seasonal fluctuations without hiring/training costs

• Controlling the cost of labor

• Permits flexibility and smoothing of the firm’s output

What is a key requirement for accurate scheduling of labor-hours in services?

• Hiring, layoff, and training costs may be significant

• No abrupt production changes

• Creates marketing ideas. Overbooking used in some businesses

• Flexibility of individual worker skills