This set of Production Planning and Control Multiple Choice Questions & Answers (MCQs) focuses on “General Design of Sales and Operation Planning”.
1. Advanced planning systems for aggregate planning rely heavily on _____ to deliver their full potential.
a) Forecasting
b) Constraints
c) Data accuracy
d) The supply chain
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Explanation: To make the best results of the forecasting of the product made in a firm, data accuracy should be maximum during production then only the planning will deliver its full potential.
2. What is aggregate planning concerned to determine?
a) The production level, sales level and capacity for each period
b) The demand level, inventory level and capacity for each period
c) The production level, inventory level and capacity for each period
d) The production level, staffing level and production for each period
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Explanation: Aggregate planning is done to make an estimate of the production level, how much inventory will be used and what will be the capacity to produce a product in a particular period.
3. What happens when capacity utilization increases?
a) It becomes more important to perform aggregate planning
b) It does not affect the importance of performing aggregate planning
c) It becomes less important to perform aggregate planning
d) It lessens the importance of aggregate planning
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Explanation: When capacity utilization increases, it means there is an increase in the use of inventory so aggregate planning is to be done to maintain the production level and inventory level.
4. Which capacity is used to satisfy the demand which is higher than forecasted?
a) Safety sales
b) Safety capacity
c) Safety inventory
d) Safety backlog
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Explanation: When the demand increases from the forecasted the there is an emergency storage of the products which is used to satisfy the need which is called as safety capacity.
5. How frequently should the aggregate planning be rerun?
a) As inputs to the aggregate plan change
b) Every 3 to 8 months
c) Weekly
d) Monthly
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Explanation: Whenever there is a change in the input then there is a change in the production level which needs to be maintained so at that time aggregate planning should be done.
6. Inventory held to satisfy demand that is higher than forecasted is _____
a) Safety inventory
b) Safety sales
c) Safety backlog
d) Safety capacity
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Explanation: When the demand of the product increases from the forecasted then there is change in the production level as well as in the inventory level. So, to accomplish the production rate there is an extra inventory stored only for these conditions which is called safety inventory.
7. _____ is used to determine customer service levels.
a) Workforce hired
b) Inventory held
c) Backlog
d) Machine capacity increase
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Explanation: Backlog is the accumulation of the stock which is not sold. The more the accumulation the less demand of the people is met and there is a decrease in the customer service levels.
8. Which strategy is used while doing aggregate planning in combination?
a) Level strategy
b) Adjustable strategy
c) Mixed strategy
d) Chase strategy
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Explanation: While doing a combined aggregate planning then mixed strategy is used. It allows change in the workforce level as well as inventory level while doing aggregate planning.
9. Where is the focus of aggregate planning?
a) On customer relationship management
b) Beyond enterprise boundaries
c) On short term production scheduling
d) Within an enterprise
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Explanation: Aggregate planning is mainly focused on the production level, inventory level and the capacity level which comes within a system or an enterprise.
10. What is the length of planning horizon?
a) Three and five years
b) Three and eighteen months
c) One and three months
d) One and three years
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Explanation: Planning horizon is done prior to the production to determine the material requirements and all the production plans. It is started 18 months before the production and is ended 3 months before the production.
11. Which operational parameter is concerned with the number of units completed per unit time?
a) Backlog
b) Overtime
c) Workforce
d) Production rate
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Explanation: Production rate is the parameter which is concerned with the number of units completed per unit time. It determines the number of units which can be produced in one minute.
12. What is planning horizon?
a) The length of time required to produce the aggregate plan
b) The duration of each time period in the aggregate plan
c) The solution to the aggregate plan
d) The time period over which the aggregate plan is to produce a solution
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Explanation: Planning horizon is the time period in which aggregate plan is to be made and forecast is done for the amount of materials required and other planning processes.
13. How can the quality of aggregate planning be improved?
a) By using information only from the local firm
b) By using information only from upstream partners
c) By using information from all parts of supply chain
d) By using information only from downstream partners
View Answer
Explanation: By using all the previous data of manufacturing like inventory, production rate and demand is used to improve the quality of aggregate planning.
Sanfoundry Global Education & Learning Series – Production Planning and Control.
To practice all areas of Production Planning and Control, here is complete set of Multiple Choice Questions and Answers.
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