Deck 11: Sales and Operations Planning Aggregate Planning

Question 1

Sales and operations planning indicates how the organization will use its tactical capacity resources to meet expected customer demand.

Answer 1

True

Question 2

At the beginning of the semester,you decide to devote 12 hours a week outside of class time to your operations management studies,regardless of scheduled tests,assignments,or project due dates.This is a level plan approach to your favorite course.

Answer 2

True

Question 3

The alternative production strategies of level,chase,or mixed that are available in top-down planning cannot be used in bottom-up planning.

Answer 3

False

Question 4

Planning numbers are somewhat aggregated (month by month)in:

A)strategic planning.
B)operational planning.
C)tactical planning.
D)detailed planning and control.

Question 5

Each entity in a supply chain should produce its own sales and operations plan independent of the other members in order to improve the overall cost performance in a supply chain.

Question 6

Detailed planning and control is riskier than strategic planning.

Question 7

Sales and operations planning across a supply chain is similar in nature to collaborative planning,forecasting,and replenishment.

Question 8

Net cash flow is the difference between the value added and the cash on hand at the end of the period.

Question 9

Last month,the sales and operations plan showed projections from January through April.This month,the sales and operations plan shows projections from February through May.This is an example of a rolling planning horizon.

Question 10

Offloading is part of a level strategy employed by services.

Question 11

Planning values are used in bottom-up planning,but cannot be used in top-down planning.

Question 12

Last month a firm made 100 model A's using all of their available labor.If they have already taken orders for 150 model A's for next month,then their planning value must be 1.5.

Question 13

A routine flight from LaGuardia Airport to Will Rogers Airport may have passengers that have paid radically different ticket prices.These prices fluctuate based on an approach called yield management.

Question 14

Detailed planning and control offers the greatest ability to adjust capacity.

Question 15

The objective function of an optimization modeling approach to S&OP should not allow available labor or equipment time to be exceeded.

Question 16

When the products and services have very different resource requirements and the mix is unstable from one period to the next,bottom-up planning works best.

Question 17

A home improvement store adds several workers to the garden center in the summer in order to meet the demands of do-it-yourselfers for their dazzling array of plants.Once gardening season is over,both the workers' jobs (and the plants they sold)will perish.The home improvement store is following an offloading strategy.

Question 18

Within the context of the planning cycle,the planning that takes place at the highest levels of the firm is called:

A)strategic planning.
B)operational planning.
C)tactical planning.
D)detailed planning and control.

Question 19

Bottom-up planning should be used when the product/service mix is unstable and resource requirements vary greatly across the offerings.

Question 20

Sales and operations planning is a necessary task for all companies,but is never a source of competitive advantage.

Question 21

Sales and operations planning must consider:

A)customer demand.
B)capabilities of suppliers.
C)capabilities of logistics service providers.
D)All of these must be considered when performing S&OP.

Question 22

Which of these is NOT an advantage of linking sales and operations planning throughout the supply chain as mentioned in the book?

A)increased sales revenue
B)greater coordination
C)improved productivity
D)fewer disruptions in the flow of goods and services

Question 23

Seventy percent of a house painter's business is exterior work and the other thirty percent is interior.The average exterior paint job takes 20 hours of labor and $400 of paint and primer,but the average interior job takes only 6 hours of labor and $75 of paint and primer.If he gets 20 service calls for the coming month,which of the following resource requirements is correct?

A)The painter has supply costs of $4750 for next month.
B)The painter has a labor demand of 260 hours for next month.
C)The painter has supply costs of $6050 for next month.
D)The painter has a labor demand of 204 hours for next month.

Question 24

A company that makes the rocket widget has one machine capable of producing this unique item.The machine requires an attendant,who works 40 hours a week for $12 per hour and has made himself available for a maximum of 8 hours of overtime.It costs $20 per hour to run the machine and it is capable of producing 10,000 rocket widgets per hour.The widgets sell for $10 per hundred and cost $1 per hundred in materials.If the production manager wishes to develop a sales and operations plans using an optimization model,which of the following statements is valid?

A)The objective function should limit overtime to less than 8 hours per week.
B)The objective function should maximize the amount of rocket widgets produced.
C)The objective function must be to minimize costs.
D)None of these statements will help plan production using optimization modeling.

Question 25

What is the ending inventory level for April in the production plan shown in the table? All entries in the table are in terms of sales units.

A)150 units
B)125 units
C)100 units
D)75 units

Question 26

The Super Bowl is right around the corner and Gowgem Hotels is aquiver with anticipation.They'd like to price their rooms at their three city locations,next to the stadium,near the airport,and in the suburbs,as high as possible but still achieve 100% occupancy.The approach they should take to this opportunity is:

A)yield management.
B)a tiered workforce.
C)a load profile.
D)beagling.

Question 27

In order for ________ planning to work,the mix of products or services must be essentially the same from one time period to the next or the products must have very similar resource requirements.

Question 28

There are few,if any,options for adjusting capacity levels for managers involved in:

A)strategic planning.
B)operational planning.
C)tactical planning.
D)detailed planning and control.

Question 29

A major retailer has recently deployed self-checkout stands at the front of the store.As long as you don't have items like paint,cold medicine,beer,fruits,or vegetables in your shopping cart,you can check out quickly in one of these lines.This retailer is providing a prime example of:

A)a tiered workforce.
B)the strategy of offloading.
C)the strategy of yield management.
D)a constraint.

Question 30

It costs $10 to make a single unit using regular production and $15 to make a single unit using overtime production.Finished units sell for $17 and are built to order.The manufacturing plant has a regular production capacity of 250 units per month and no inventory at the start of the planning period.What is the BEST net cash flow for the entire planning period if the manufacturer uses a chase plan?

A)$6800
B)$7050
C)$7300
D)$7550

Question 31

A sales and operations plan that varies both production and inventory levels is called a(n)________ production plan.

Question 32

This graph of expected sales level and expected output shows:

A)a chase production plan is being used.
B)a level production plan is being used.
C)a mixed production plan is being used.
D)planning levels have been computed.

Question 33

A production planner can confirm future capacity requirements based on released or planned orders by glancing at a(n)________.

Question 34

Forty percent of a house painter's business is exterior work and the other sixty percent is interior.The average exterior paint job takes 30 hours of labor and $500 of paint and primer,but the average interior job takes only 6 hours of labor and $80 of paint and primer.If he gets 25 service calls for the coming month and 30 calls for the month after that,which of the following resource requirements is correct?

A)The painter has supply costs of greater than $13,500 but less than $13,600 for the next two months.
B)The painter has a labor demand of greater than 800 hours but less than 850 hours for the next two months.
C)The painter has supply costs of greater than $13,400 but less than $13,500 for the next two months.
D)The painter has a labor demand of greater than 850 hours but less than 900 hours for the next two months.

Question 35

A(n)________ production plan matches production in each time period with the sales forecast.

Question 36

A company has a sales forecast for the following five months as shown in the table.If they have a beginning inventory of 100 units,what amount should be produced under a level plan in order for them to have an ending inventory of zero units at the end of the five month period?

A)320 units per month
B)360 units per month
C)400 units per month
D)440 units per month

Question 37

The standard equation used by Gigi Enterprises for production planning is Production = Demand.The sales and operations planner is probably using:

A)a mixed production approach.
B)a level production approach.
C)a chase production approach.
D)a bottom-up planning approach.

Question 38

As potato harvest season approaches,the number of year-round llama wranglers is insufficient to meet the demand,so a few wranglers are hired just for the month it takes to haul the harvest down from the mountains to the anxious potato-festival crowd.This approach to meeting the labor requirements is called:

A)a tiered workforce.
B)offloading.
C)labor management.
D)yield management.

Question 39

An organization has developed three alternate sales and operations plans for the coming six months and now must choose between them.They should consider:

A)how their plan will impact supply chain partners.
B)what the cash flows are like.
C)how flexible the plan is.
D)All of these are admirable criteria for a sales and operation plan.

Question 40

Willow Trees Inc.makes seven different products,four of which are within their first year of existence.The demands for all products,especially the newest ones,are not well known.The newest products are intended to complement their existing products and take different materials,different processes,and an entirely different set of labor skills for production.Which of these statements regarding their likely sales and operations planning activities is BEST?

A)The planning values for the oldest items in the product line should be used for the new items in the product line.
B)Willow Trees Inc.should avoid using sales and operations planning until their product line matures.
C)Willow Trees Inc.should use top-down planning.
D)Willow Trees Inc.should use bottom-up planning.

Question 41

There are three phases to sales and operations planning implementation.The first phase,during which employees are trained,information systems implemented,and ideal products are identified for initial efforts is called ________.

Question 42

What is the purpose of S&OP and what takes place at the strategic,tactical,and detailed planning and control levels?

Question 43

Create a level plan with a zero ending inventory for the forecast shown in the table.There is no beginning inventory and regular production capacity is 300 units.Overtime costs $15 extra and is limited to 25 units per month and subcontracting is limited to 60 units per month and costs $10 per unit.Back orders cost $50 per unit and there is a cost of $5 per month to hold a unit in inventory.What is the total plan cost?

Question 44

An organization with twenty people developing sales and operations plans might receive twenty different proposals.What are some factors an organization might consider when deciding among these alternative plans? Provide a ranking for your factors and support your ranking with examples from recent business news media.

Question 45

What are the possibilities for matching capacity to sales and vice versa when doing S&OP in a service environment?

Question 46

A(n)________ limits our ability to increase profits or cut costs by reducing the set of possible solutions in an optimization model.

Question 47

Describe how both top-down and bottom-up planning work and the situations where one approach is superior to the other.

Question 48

Tim subtracted his cash outflows for 2011 from his cash inflows for the same period to arrive at his ________.

Question 49

Your book describes three phases in the implementation of sales and operations planning in an organization.What are the three phases and what takes place in each?

Question 50

How can and why should a firm link S&OP throughout the supply chain?

Question 51

An organization that meets seasonal swings in demand by hiring and then laying off temporary workers while maintaining a few full-time permanent workers is employing a(n)________ strategy.

Question 52

Sales and operations plans must be updated as time progresses,so most firms establish a(n)________.

Question 53

A hotel using yield management would ________ prices if demand is higher than expected only if the expected result is ________.

Question 54

Create a minimum cost chase plan for the forecast shown in the table.There is no beginning inventory and regular production capacity is 350 units.Overtime costs $20 extra and is limited to 50 units per month and subcontracting is limited to 100 units per month and costs $15 per unit.Back orders cost $40 per unit and there is a cost of $5 per month to hold a unit in inventory.There is room for only 100 units in inventory.What is the total plan cost?

Question 55

Describe the differences between level,chase,and mixed production plans.Use the forecast in the table to show the differences by creating a plan of each type.There is no beginning inventory and regular production capacity is 350 units.Overtime costs $10 extra and is limited to 50 units per month.Subcontracting is limited to 100 units per month and costs $15 per unit.Back orders cost $40 per unit and there is a cost of $5 per month to hold a unit in inventory.There is room for only 100 units in inventory.