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Global Supply Chain Management; Chapter summary
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TRL3709 Prescribed Book - Supply Chain Management: Strategy, Planning, and Operation, Chopra, S. 7th Edition
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Supply Chain Management, 6e, Global Edition (Chopra/Meindl)Chapter 8 Aggregate Planning in a Supply Chain
8.1 True/False Questions
1) The goal of aggregate planning is to satisfy demand in a way that minimizes profit.
Answer: FALSE
Diff: 1
Topic: 8.1 The Role of Aggregate Planning in a Supply Chain
AACSB: Application of knowledge
Objective: LO 8.1: Understand the importance of aggregate planning as a supply chain activity.
2) Aggregate planning is a process by which a company determines levels of capacity,
production, subcontracting, inventory, stockouts, and even pricing over a specified time horizon.
Answer: TRUE
Diff: 1
Topic: 8.1 The Role of Aggregate Planning in a Supply Chain
AACSB: Application of knowledge
Objective: LO 8.1: Understand the importance of aggregate planning as a supply chain activity.
3) Traditionally, much of aggregate planning is focused within an enterprise and may not always
be seen as a part of supply chain management.
Answer: TRUE
Diff: 2
Topic: 8.1 The Role of Aggregate Planning in a Supply Chain
AACSB: Application of knowledge
Objective: LO 8.1: Understand the importance of aggregate planning as a supply chain activity.
4) Short-term production serves as a broad blueprint for operations and establishes the
parameters within which aggregate planning decisions are made.
Answer: FALSE
Diff: 1
Topic: 8.1 The Role of Aggregate Planning in a Supply Chain
AACSB: Application of knowledge
Objective: LO 8.1: Understand the importance of aggregate planning as a supply chain activity.
5) The aggregate planning problem is concerned with determining the production level,
inventory level, and capacity level (internal and outsourced) for each period that maximizes the
firm's profit over the planning horizon.
Answer: TRUE
Diff: 2
Topic: 8.1 The Role of Aggregate Planning in a Supply Chain
AACSB: Application of knowledge
Objective: LO 8.1: Understand the importance of aggregate planning as a supply chain activity.
1
Copyright © 2016 Pearson Education, Ltd.
,6) To create an aggregate plan, a company must specify the planning horizon for the plan and the
duration of each period within the planning horizon.
Answer: TRUE
Diff: 1
Topic: 8.1 The Role of Aggregate Planning in a Supply Chain
AACSB: Application of knowledge
Objective: LO 8.1: Understand the importance of aggregate planning as a supply chain activity.
7) A planning horizon is usually between three and five years.
Answer: FALSE
Diff: 2
Topic: 8.2 The Aggregate Planning Problem
AACSB: Application of knowledge
Objective: LO 8.2: Describe the information needed to produce an aggregate plan and the
outputs obtained.
8) A poor aggregate plan may result in a large amount of excess inventory and capacity, thereby
raising costs.
Answer: TRUE
Diff: 2
Topic: 8.2 The Aggregate Planning Problem
AACSB: Application of knowledge
Objective: LO 8.2: Describe the information needed to produce an aggregate plan and the
outputs obtained.
9) The aggregate planner must make a trade-off between capacity, inventory, and backlog costs.
Answer: TRUE
Diff: 2
Topic: 8.2 The Aggregate Planning Problem
AACSB: Application of knowledge
Objective: LO 8.3: Explain the basic trade-offs to consider when creating an aggregate plan.
10) Most strategies that an aggregate planner actually uses are in combination, and are referred to
as hybrid strategies.
Answer: TRUE
Diff: 1
Topic: 8.3 Aggregate Planning Strategies
AACSB: Application of knowledge
Objective: LO 8.3: Explain the basic trade-offs to consider when creating an aggregate plan.
2
Copyright © 2016 Pearson Education, Ltd.
, 11) To improve the quality of aggregate plans, forecast errors must be taken into account when
formulating aggregate plans.
Answer: TRUE
Diff: 2
Topic: 8.6 Aggregate Planning in Excel
AACSB: Application of knowledge
Objective: LO 8.4: Formulate and solve basic aggregate planning problems using Microsoft
Excel.
12) Forecasting errors are dealt with in aggregate plans using either safety backlog or safety
capacity.
Answer: FALSE
Diff: 2
Topic: 8.6 Aggregate Planning in Excel
AACSB: Application of knowledge
Objective: LO 8.4: Formulate and solve basic aggregate planning problems using Microsoft
Excel.
13) Safety inventory is defined as inventory held to satisfy demand that is higher than forecasted.
Answer: FALSE
Diff: 1
Topic: 8.6 Aggregate Planning in Excel
AACSB: Application of knowledge
Objective: LO 8.4: Formulate and solve basic aggregate planning problems using Microsoft
Excel.
14) Safety capacity is defined as capacity used to satisfy demand that is lower than forecasted.
Answer: FALSE
Diff: 1
Topic: 8.6 Aggregate Planning in Excel
AACSB: Application of knowledge
Objective: LO 8.4: Formulate and solve basic aggregate planning problems using Microsoft
Excel.
15) Companies should work with downstream partners to produce forecasts and with upstream
partners to determine constraints when doing aggregate planning.
Answer: TRUE
Diff: 1
Topic: 8.6 Aggregate Planning in Excel
AACSB: Application of knowledge
Objective: LO 8.4: Formulate and solve basic aggregate planning problems using Microsoft
Excel.
3
Copyright © 2016 Pearson Education, Ltd.
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