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Exam 10: Sales and Operations Planning Aggregate Planning

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Question 41

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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.

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Question 42

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A company has the cost structure shown in the table and faces a demand in July that exceeds capacity by 200 units. They enter June with an inventory of zero and a demand equal to capacity. Their best course of action in order to completely fill all of the orders for both June and July by the end of July is to subcontract the extra 200 units in June and hold the inventory one period for July's demand. $\begin{array} { | l | c | } \hline { \text { Managerial Lever } } & \text { Cost } \\\hline \text { Regular production } & \$ 1,000 / \text { unit } \\\hline \text { Overtime production } & \$ 1300 / \text { unit } \\\hline \text { Subcontracting } & \$ 1200 / \text { unit } \\\hline \text { Inventory holding } & \$ 100 / \text { unit/month } \\\hline \text { Backlog cost } & \$ 400 / \text { unit/month } \\\hline\end{array}$

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Question 43

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

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:

It costs $10 to make a single unit using regular production and $15 to make a single unit using overtime production. Total overtime production is limited to 1000 units for the five-month period. The manufacturing plant has a regular production capacity of 250 units per month and 225 units in inventory at the start of the planning period. There is a $5 per unit charge for holding inventory at the end of each month and a limit of 600 units ending inventory for any period. What is the minimum cost production plan if the forecast must be met with a zero ending inventory each month? $\begin{array} { | l | c | } \hline { \text { Month } } & \text { Forecast } \\\hline \text { Tanuary } & 250 \\\hline \text { February } & 200 \\\hline \text { March } & 300 \\\hline \text { April } & 400 \\\hline \text { May } & 500 \\\hline\end{array}$

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.

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.

Compared to other levels of planning, detailed planning and control offers the greatest ability to adjust capacity.

It costs $12 to make a single unit using regular production and $15 to make a single unit using overtime production. Total overtime production is limited to 500 units for the five month period. The manufacturing plant has a regular production capacity of 250 units per month and 50 units in inventory at the start of the planning period. There is a $5 per unit charge for holding inventory at the end of each month and a limit of 250 units ending inventory for any period. What is the lowest cost production plan if the forecast must be met with a zero ending inventory each month? $\begin{array} { | l | c | } \hline { \text { Month } } & \text { Forecast } \\\hline \text { Tanuary } & 250 \\\hline \text { February } & 200 \\\hline \text { March } & 300 \\\hline \text { April } & 400 \\\hline \text { May } & 500 \\\hline\end{array}$

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 ________.

A company has a sales forecast for the following five months as shown in the table. If they have a beginning inventory of 1225 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? $\begin{array} { | l | c | } \hline { \text { Month } } & \text { Forecast } \\\hline \text { Tanuary } & 1575 \\\hline \text { February } & 1420 \\\hline \text { March } & 1680 \\\hline \text { April } & 1750 \\\hline \text { May } & 1975 \\\hline\end{array}$

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

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?

Planning numbers are somewhat aggregated (month by month) in what planning level?

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:

Tim subtracted his cash outflows for 2015 from his cash inflows for the same period to arrive at his ________.

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

To develop a superior plan, sales and operations planning must consider:

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?

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.