Study Guide for the Second Exam Aggregate Production Planning (APP) 1. What are the major inputs, constraints, and outputs of the aggregate production plan (APP)? 2. Does APP have to be in terms of a real product? 3. Where does APP fit in the hierarchy of plans? 4. What is a pure strategy? What is a mixed strategy? Give examples? How do we determine (judge) whether one plan is better than the other? 5. What is relevant (incremental) cost? Does it exist in accounting books? 6. Is it appropriate for a company, which competes on the basis of quality, to construct a chase plan?
Explain and give examples if necessary? 7. What is the major cost (excluding regular production cost) for the level plans? 8. Describe the (computational) steps involved in constructing a level plan? 9. What is the major cost (excluding regular production cost) for the chase plan? 10. What is backordering? It is usually mixed with what other type of strategy? (Hint: The example on the handout. ) 11. Arrange in order of increasing cost (left to right, from least to most expensive): overtime, subcontract, backorder ? 12. Describe the APP strategy (including their competitive priorities)
Japanese car manufacturers used in 1980s. 13. All the problems assigned and/or done in class. Concentrate on the practice problems (for the test) and problems on the handout. Do not worry too much about the problems in the book. But read the book. Forecasting 1. Do forecasting accuracy increase or decrease as the planning horizon increases? 2. Do forecasting accuracy increase or decrease as items are grouped (aggregated? ) 3. What is Delphi method? What makes it work? 4. What problems do you see with sales force composite estimate? 5. What is causal (associative) forecasting? 6. What is time series forecasting? . What are the components of time series? 8. Which statistic do we use to choose between two forecasting methods? 9. In using simple exponential smoothing, what do we do if we do not have a forecast for the first period? 10. Which component of time series do we smoothen with exponential smoothing? With moving averages? 11. As a forecasting technique, is exponential smoothing always better than moving averages? 12. What happens when we increase alpha[pic]? Are we giving more or less weight to more recent data? 13. In general, do weighted moving averages give more or less weight to more recent data? 4. What is the difference between MAD and MAPE? 15. All the problems (assigned and/or done in class. ) Inventory Management 1. What does inventory do for a company? Why do we carry it? 2. What is dependent inventory? What is independent inventory? How do you plan and control each? 3. What is EOQ? How does an EOQ/ROP system work? 4. What is the relationship between annual ordering and carrying costs? Why? 5. What is ABC analysis? 6. Describe Wheeled Coach’s ABC classification. How do they use it? (Hint: Cycle counting)? 7. What is cycle counting? Why do we do it? 8.
Do you forecast the demand for components? Why (Why not? )? 9. Where do EOQ, optimal annual ordering, optimal annual carrying, and optimal (minimum) total (annual) inventory costs go on the cost profile? Know the graph for the cost profile for Exam II. 10. All the problems (done or assigned. ) Also, the computation of the optimal total cost, optimal number of orders per year, order cycle time and deterministic reorder point. 11. What is the formula for the reorder point? What are the two major categories? * MAKE SURE YOU PUT ALL YOUR FORMULAS ON YOUR COPY SHEET *