Supply Chain Management Study Set 2

The aggregate operations plan translates annual and quarterly business plans into broad labor and output plans for the intermediate term of 3 to 18 months.

The objective of the aggregate operations plan is to insure that the marketing and sales plans are realistic.

The aggregate operations plan differs in virtually every aspect in service organizations as contrasted with manufacturing organizations.

The sales and marketing plans are typically developed separately from the aggregate operations plan as a way of cross-checking results to insure the integrity of assumptions about the future.

Aggregate sales and operations planning occur in a company about every 3 to 18 months.

Aggregation in sales and operations planning is by groups of customers on the supply side and by product families on the demand side of the firm's supply chain.

Accurate medium-range planning increases the likelihood of operating within the limits of a budget.

The main purpose of the aggregate production plan is to specify the optimal combination of workforce level and inventory on hand.

The International Aggregate Planning Society (IAPS) has developed aggregate operations planning guidelines that are followed by a majority of manufacturing firms.

The sales and operations planning process consists of a series of meetings.

The sales and operations planning process is made up of a variety of analytical techniques that interact to produce short and intermediate term goals.

Subcontracting is viewed as a risky strategy because the firm may lose control of product design and pricing.

The operations plan should not be updated but should be followed precisely until the longest-term planning horizon has passed.

Fixed and variable costs incurred in producing a given product type in a given time period are relevant aggregate operations planning costs.

Backordering costs incurred in producing a given product type in a given time period are relevant aggregate operations planning costs.

Foregone profit margins are considered as relevant aggregate operations planning costs.

Costs incurred in hiring, training and laying off personnel are considered relevant aggregate operations planning costs.

Aggregate planning techniques is developed from the master schedule and the strategic capacity plan.

The widespread adoption of computing technology has led to the virtual abandonment of simple cut-and-try charting and graphical methods to develop aggregate operations plans.

The increasing complexity of modern operations management has made simple cut-and-try charting and graphical methods formerly used to develop aggregate operations plans impractical and obsolete.