Section A: Demand Management Principles

D

A sales forecast for a product in a certain period is defined as the company's: desired sales. sales quota. shipments to customers. expected sales.

B

After the business plan, what is the next step in the planning hierarchy? Logistics plan Sales and operations plan Master schedule Production plan

A

Customer relationship management supports lean principles because: it encompasses quality at the source. both address equal service to all customers. it creates the demand that lean supplies. on-time delivery relies on production simplification.

B

From a master scheduling perspective, what is mass customization most similar to? Make-to-stock Assemble-to-order Make-to-order Engineer-to-order

B

How often is the forecast information used in the sales and operations planning process updated? Weekly Monthly Quarterly Annually

A

Improving forecast accuracy contributes to which of the following actions? Decreasing delivery lead times Increasing productivity Decreasing sales and operations planning frequency Increasing inventory turnover

A

In a make-to-stock environment, what indicates that the correct level of finished goods is being planned in a time of increasing sales? High customer service levels Actual sales exceeding plan Increasing customer base Increasing inventory turnover

B

Management agrees that a good way to win sales for the organization's standard product, which competes in a highly variable demand market, is to switch from make-to-order to make-to-stock. The primary order winner for this product is most likely: product quality. delivery lead time. cost. design flexibility.

A

Mass customization is the ability to produce: a large variety of individual products at a low cost. generic products that the customer can use in multiple ways. products with multiple features. large quantities of customer-configured products.

D

Sales and operations planning (S&OP) is typically performed at which of the following levels? Raw material End item (finished goods) Semi-finished goods Product family

A

Sales and operations planning (S&OP) typically includes which of the following functions? Sales, marketing, finance, and operations Operations, purchasing, quality, and design Design, distribution, marketing, and quality Quality, planning, sales, and production

A

Subassemblies and options need to be master-scheduled separately from the end item in which of the following environments? Assemble-to-order Make-to-order Engineer-to-order Make-to-stock

B

The creation of a high-volume product with large variety so that a customer may specify an exact model is: mass production. mass customization. make-to-order. design-to-order.

A

The plan for determining actions to support the mission, goals, and objectives of an organization is the: strategic plan. project plan. tactical plan. sales and operations plan.

D

The sales forecast is disaggregated into individual forecasts at the distribution center level. What may this result in? Inconsistency between the total forecast and the distribution center forecasts Increases in the planners' need for involvement Decreases in safety stock levels Forecast errors at the detail level

D

What is the first step in planning the scheduling of goods and services? Forecasting Production planning Master production scheduling Sales and operations planning

C

Which manufacturing environment is the most economical production approach, with long runs, high capacity utilization rates, and few setups? Batch Cellular Continuous flow Intermittent

C

Which of the following best applies to the sales forecast development process as it relates to sales and operations planning? It enables forecasts to be extended to the demand horizon. It is constrained only by demonstrated capacity. It is a check and/or revision of the existing forecast. It recognizes that forecasting is an inaccurate process.

D

Which of the following considerations is outside the sales and operations demand management process? Selection of a statistical forecasting technique Customer starting up a new, larger facility Management override of the statistical forecast Capacity of a new assembly line for a new product

C

Which of the following criteria would be essential for the use of rough-cut capacity planning in an engineer-to-order company? Accurate work-in-process inventory and finished goods Successful implementation of a material requirements planning (MRP) system Method of associating planned production with the amount of capacity required Education of customers on capacity management concepts

B

Which of the following is the first level at which existing inventory is accounted for in the planning hierarchy? Master planning Sales and operations planning Business planning Detailed scheduling and planning

A

Which of the following is true of the relationship between the production plan and the resource plan? The production plan is constrained by the resource plan. The resource plan and the production plan are at different levels of the planning hierarchy. The production plan is an output of the resource plan. The resource plan is an input to the production plan.

A

Which of the following process choices is likely to simplify the sales and operations planning process? Line Lot-for-lot Functional Batch

A

Which of the following production environments is most likely to have customer, forecast, and distribution demand? Make-to-stock Make-to-order Engineer-to-order Assemble-to-order

C

Which of the following products is most likely to be the simplest to develop a sales and operations plan for? Ballpoint pens Blue jeans Plywood Printers

B

Which of the following situations is most likely to require a forecast of future demand? Change from functional to flow manufacturing Phase-in of a new product family and options Introduction of a new manufacturing technology Sole-source supplier using allocations by customer

C

Which of the following types of demand benefits from the aggregation process? Distribution Customer Forecasted Service parts

D

Which of the following types of processes best supports the widest range of production volume and permits a company to most easily adjust its capacity to match demand? Line Continuous Jobbing Batch

C

Why does sales and operations planning (S&OP) address both monetary units and product families? Knowing both enables a cross-check to ensure consistency. Accounting needs monetary unit information, and production needs product information. Monetary units are an input, and product family plans are an output. The planning horizon covers both long- and short-term planning.

C

Why is forecasting performed within the sales and operations planning cycle? Aggregate monetary units are unnecessary for a forecast. Sales personnel are trained in forecasting methodologies. It is important to forecast based on customer buying habits. The forecasting function is located within the sales department.

D

A company is expecting a one-year downturn in the economy that is likely to reduce customer demand as compared to past annual sales levels. Which of the following responses would be best in this situation? Match competitors' responses to price and lead time. Increase inventory levels to reduce lead times. Increase order demand satisfied from production. Reduce production output and inventory levels.

C

A discrete manufacturer's marketing strategy is to be the low-cost, high-quality, high-volume, rapid-delivery supplier. Which of the following manufacturing processes would best fulfill this marketing strategy? Jobbing Batch Line Cellular

B

A make-to-stock company ships product within three days of completion of two weeks of manufacturing. Any components with lead times greater than one week are stocked in inventory. The product is standard, with minor customizations, though demand may be erratic. Why should the company maintain the make-to-stock environment rather than attempting to change to assemble-to-order? Level production minimizes the total inventory investment over a chase strategy. Finished goods inventory enables stable production even though demand is erratic. Marketing cannot guarantee a three-day shipment time for an assemble-to-order environment. A product requiring two weeks to produce cannot be assembled and shipped in three days.