Test Bank Chapter 10
A customer is given a due date for their product order with: A) backlog. B) reservation. C) service on demand. D) appointment.
A
A financial assessment of a for-profit organization's near future (for one or two years ahead) is a(n): A) business plan. B) annual plan. C) resource plan. D) financial budget.
A
A sales and operations plan for a service firm is: A) a staffing plan. B) a process plan. C) an operations plan. D) a production plan.
A
Job flow time is defined as the: A) time of completion of a job plus the time it was available in a work station. B) processing time to complete a particular job. C) time of completion of the last job of a group minus the starting time of the first job. D) amount of time by which a group of jobs missed their due dates
A
The timing and size of production quantities for each product in the product family is specified by the: A) master production schedule. B) material requirements plan. C) resource plan. D) scheduling plan.
A
The workforce schedule: A) determines when employees work. B) determines how many workers are needed over an extended horizon. C) determines the daily worker requirements. D) specifies the specific task each worker is to do and when.
A
Which of the following is the best example of a physical constraint on the sales and operations plan? A) inventory storage space B) level of backorders C) use of overtime D) safety stock levels
A
Which of these is an example of complementary services? A) A company that performs lawn care in the summer hangs holiday decorations in November and December. B) A company that offers haircuts also employs a bootblack to shine customers' shoes while they receive their haircut. C) A hospital offers emergency services and has a day care for employees' children. D) The fire department trains all employees in CPR in case a fire victim has a heart attack.
A
Which one of the following statements about sales and operations planning is best? A) A production plan generally focuses on production rates and inventory holdings, whereas a staffing plan focuses on staffing and other labor-related factors. B) Supply options are actions that adjust demand patterns. C) Operations and marketing are the only two functional areas that supply inputs for developing production and staffing plans. D) A level strategy stabilizes inventory levels by adjusting production rates or staff levels to match demand levels over the planning horizon
A
Which one of the following statements concerning production and staffing plans is best? A) Aggregation can be performed along three dimensions: product families, labor, and time. B) A staffing plan is the intermediate link between the business plan and the master production schedule. C) Production plans are based primarily on information from the master production plan. D) A master production schedule is a projected statement of income, costs, and profits.
A
Which one of the following statements concerning supply options is best? A) Subcontracting can help overcome short-term capacity shortages by offloading work on other producers. B) Creating anticipation inventory increases customization and is particularly favored in the service industry. C) Adjusting workforce levels is preferred when the workforce is skilled and the labor pool is small. D) Using overtime capacity usually improves worker hourly productivity.
A
Which one of the following statements is best? A) Demand options adjust demand patterns, whereas supply options change in response to changes in demand. B) Overtime and undertime are two ways to change the workforce level rather than its utilization. C) Subcontracting during the peak season is called an aggressive strategy because it requires a competitive orientation toward suppliers. D) Due to the almost limitless number of possible sales and operations plans, it is virtually impossible to select a desirable plan without using an optimization procedure such as linear programming.
A
Which one of the following statements on sales and operations planning is best? A) Creative pricing is an example of a demand option sales and operations planning strategy. B) Chase strategies are always the lowest cost alternative but are often not chosen because of other factors. C) Vacation schedules are rarely used as a supply option because the planners are at the mercy of the employees' choices for free time. D) A mixed strategy is one that "mixes" the demand of complementary products to level the aggregate demand rate.
A
Which one of the following statements regarding production and staffing plans is best? A) A producer of greeting cards for all occasions can use a level strategy to good advantage because of the complementary nature of the products and the workforce to produce many varieties of cards. B) The production plan outlines time-phased production rates, workforce levels, and inventories without considering capacity limitations. C) A decision to vertically integrate is one of the possible demand options a firm may employ when operating under uneven demand conditions. D) An advantage of employing demand options is that creative pricing and promotional campaigns increase the contribution margin.
A
A TV repair service company has a seasonal demand for its service, and there is a general shortage of skilled TV repairpersons. Which one of the following is a demand option production-planning alternative suitable for this situation? A) Hire and lay off workers to match the demand requirements. B) Increase the backlog for short-term demand surges. C) Build anticipation inventories. D) Subcontract work out during peak demand periods.
B
A company is attempting to cope with seasonal demand patterns by managing its demand. Which one of the following will NOT help achieve this aim? A) complementary products or services B) adjusting workforce levels C) promotional campaigns D) creative pricing
B
A financial assessment of a not-for-profit organization's near future (for one or two years ahead) is a(n): A) business plan. B) annual plan. C) resource plan. D) financial budget.
B
A sales and operations plan for a manufacturing firm that centers on manufacturing rates and inventory holdings is: A) a staffing plan. B) a production plan. C) an operations plan. D) a process plan.
B
A specific time and a hotel room are assigned to a customer by a service provider using a(n): A) backlog. B) reservation. C) service on demand. D) appointment.
B
The intermediate link between the business plan and the MPS is the: A) annual plan. B) production plan. C) financial plan. D) workforce schedule
B
The meaning of undertime is: A) employees work as usual, but they are paid at a lower rate. B) employees don't have enough productive work for the number of hours that they normally work. C) employees work more than normal hours, but they are not compensated. D) the workweek of some employees is permanently reduced.
B
The planning horizon for a sales and operations plan is typically: A) 0 - 3 months. B) 3 - 18 months. C) 18 - 36 months. D) 36 months - 60 months
B
The plans for the components, purchased materials, and workstations are developed in the: A) master production scheduling process. B) material requirements planning process. C) scheduling process. D) constraint management process.
B
The sales and operations planning strategy to be used should be consistent with the business environment. Which one of the following pairs of business environment and strategy is consistent? A) skilled labor in short supply; adjust workforce levels B) low inventory holding cost; build anticipation inventory C) ample labor supply; increase backlog for short-term demand surges D) seasonal requirements and ample, unskilled labor supply; subcontracting
B
Two basic types of decision alternatives are used to arrive at acceptable production or staffing plans: supply options and demand options. If an organization that faces seasonal demand uses a supply option approach, which one of the following actions is it most likely to implement? A) introduction of complementary products B) creating a stock of anticipation inventory C) advertising to generate demand during off-peak periods D) discounting products in off-peak periods
B
Which of the these sales and operations planning levers is associated with interviews, training, and severance pay? A) backorders and stockouts B) hiring and layoffs C) use of overtime D) holding inventory
B
Which of these is an example of complementary products? A) A company that makes watches also makes watch bands. B) A company that produces sweaters also produces swimsuits. C) A firm that produces left shoes produces right shoes as well. D) A firm that makes peanut butter also makes jelly.
B
Which one of the following actions applies to a level strategy? A) Hire workers to increase production output to match increases in demand requirements. B) Build anticipation inventory to meet the variability in demand. C) Decrease production output to match any decreases in demand requirements. D) Use promotional campaigns to boost demand.
B
Which one of the following approaches for scheduling customer demand would be appropriate for a fancy hotel? A) backlogs B) reservations C) service on demand D) appointments
B
Which one of the following conditions can make a level strategy the most attractive? A) The cost of changing the workforce levels is low. B) Products complementary to the existing products can be produced easily with the given facilities. C) The shelf life of the goods being produced is limited. D) Inventory-holding costs are high.
B
Which one of the following is a demand option for sales and operations planning? A) Use seasonal inventories to buffer the manufacturing process from variations in customer demand. B) Offer complementary products or services with contra cyclical demand requirements. C) Use overtime and undertime to change workforce levels. D) Use subcontracting to overcome short-term capacity shortages.
B
Which one of the following statements about managerial inputs to production and staffing plans is best? A) Finance provides labor and machine standards. B) Human resources provide the training capacity and labor-market conditions. C) Marketing provides the schedule of sales associates. D) Materials provide the current staffing level.
B
Which one of the following statements about sales and operations planning is best? A) Supply options are actions that adjust demand patterns. B) All functional areas should supply inputs for developing production and staffing plans. C) The production plan specifies the timing and size of production quantities for each product in the product families. D) The staffing plan is to service organizations what competitive priorities are to manufacturing organizations.
B
Which one of the following statements about sales and operations planning is best? A) When a firm wants to minimize its inventory investment, it should use a level production-planning strategy. B) When a firm wants to emphasize stability in its workforce, it should adopt a level production-planning strategy. C) A make-to-stock production plan that wants to emphasize plant utilization should adopt a chase production strategy. D) A make-to-stock production plan that wants to minimize changes in production rates should adopt a chase production-planning strategy.
B
An aggressive advertising campaign was credited with K-Tel's inability to keep K-Fed's latest CD on the shelves. K-Tel continued to accept orders and promised to ship as soon as they could burn new discs. Customers weren't happy, but were willing to wait. This unfortunate situation can be described as a: A) stockout. B) backlog. C) backorder. D) lost sale.
C
An example of revenue management is: A) two-for-one pricing for bath towels. B) scheduling specific times for dental appointments. C) two passengers, sitting side-by-side in an airplane, charged different prices depending on when they made their reservations. D) accumulating backorders to smooth demand.
C
Companies perform aggregation along the three dimensions of: A) products, labor, customers. B) time, suppliers, services. C) products / services, labor, time. D) time, products, customers.
C
Gantt charts can be used to: A) monitor the progress of jobs but cannot be used to sequence work on each machine. B) sequence work on each machine but cannot be used to monitor the progress of each job. C) monitor the progress of jobs and sequence work on each machine. D) monitor the average number of defective parts generated by a machine on each job.
C
The lowest planning level in a sales and operations plan is: A) resource planning. B) forecasting. C) scheduling. D) sales and operations planning.
C
The purpose of a rotating schedule is to: A) assign each employee to work the same days and hours each week. B) assign senior employees more opportunity to have weekends off. C) deal with certain undesirable aspects of several individual workforce schedules. D) make sure the legal constraints imposed on workforce schedules are satisfied.
C
The time that employees work that is longer than the regular workday or workweek for which they receive additional pay is: A) slack time. B) premium. C) overtime. D) the workweek.
C
Which one of the following conditions favors a level strategy for manufacturing firms? A) high availability of workers B) short shelf life of inventory C) highly automated equipment and a make-to-stock strategy D) high inventory-holding cost
C
A service provider assigns a specific time for personal service to a customer with a(n): A) backlog. B) reservation. C) service on demand. D) appointment.
D
Acme expected demand for rocket-powered roller skates to pick up during Roadrunner Season, so they built hundreds of extra pairs and stored them out of season. The excess production is: A) buffer stock. B) throughput. C) lagniappe. D) anticipation inventory.
D
Backorders and stockouts are most likely to cause expenses for: A) advertising costs. B) lost productivity. C) cost of capital. D) lost sales.
D
Based on the sales and operations plan for a service provider, the next planning level is: A) scheduling. B) annual planning. C) constraint management. D) resource planning.
D
The process of varying pricing at the right time for different customer segments to maximize revenue generated from existing supply capacity is called: A) supply planning. B) backlogging. C) backordering. D) revenue management.
D
Which of the following is NOT a typical product family? A) a group of customers B) a group of products C) a group of services D) a group of suppliers
D
Which one of the following approaches for scheduling customer demand would be appropriate for a dentist? A) backlogs B) reservations C) service on demand D) appointments
D
Which one of the following statements about costs of sales and operations plans is best? A) Overtime wages are typically 50% of regular time wages, exclusive of fringe benefits. B) The cost of capital is not generally included in the inventory-holding cost. C) Fringe benefits, which are a part of regular-time costs, do not typically include health insurance and paid vacations. D) Hiring costs include the costs of advertising jobs, interviews, training programs for new employees, and initial paperwork.
D
Which one of the following statements concerning sales and operations planning alternatives is best? A) Building anticipation inventory during the slack season is a demand management option a firm can follow to satisfy seasonal demand patterns. B) Adjusting workforce levels is an attractive reactive alternative when the cost of training and unemployment compensation is high. C) Creating anticipation inventory has the advantage of increasing customization. D) Using overtime is an undesirable option when the overtime wage premium is high and sustained levels of top worker productivity are important.
D
A fixed schedule gives each employee the next employee's schedule the following week.
False
A level strategy matches demand during the planning horizon by varying either the workforce level or the output rate.
False
A master production schedule is a schedule that specifies the timing, size, and sequence of production for aggregated product families.
False
A rotating schedule calls for each employee to work the same days and hours each week.
False
A services firm's sales and operations plan generates both production plan and a staffing plan.
False
By their nature, firms engaged in customer services cannot do anything to manage customer demand.
False
Complementary products are actions that attempt to modify demand and, consequently, resource requirements.
False
Earliest due date (EDD) is a priority-sequencing rule that states the job requiring the shortest processing time is the next job to be processed.
False
Flow time is only the time a job spends being processed, and excludes any time waiting to be processed, equipment set up time and time spent moving between operations.
False
Once a demand forecast has been entered into a sales and operations plan, it cannot be updated since it would skew the process results
False
Some ways to manage demand include building anticipation inventories of goods and hiring or laying off employees.
False
The operations planning and scheduling process moves from the short term scheduling level to the aggregate level
False
The spreadsheet approach to sales and operations planning for a services provider includes inventory costs as one factor to be considered.
False
The ________ is a schedule that specifies the timing and size of production quantities for each product in the product family.
Master production schedule
A service firm's sales and operations plan, called a(n) ________, centers on staffing and other labor-related factors.
Staffing plan
A manufacturing firm's sales and operations plan generates both production plan and a staffing plan.
True
A product family is a group of customers, services, or products that have similar demand requirements and common processes, labor, and materials requirements.
True
Advanced planning and scheduling systems (APS) seek to optimize resources across the supply chain and align daily operations with strategic goals.
True
Anticipation inventory is used to absorb uneven rates of demand or supply.
True
Firms that are most likely to use backlogs tend to have a make-to-order strategy.
True
For the student advisement service at a university, business majors and education majors would constitute two different product families.
True
Jobs processed using the first-come-first-served priority rule still permits them to be expedited.
True
One distinction between manufacturing and services that affects sales and operations plans is that services have difficulty creating inventories in anticipation of uneven demand.
True
One objective of a sales and operations plan is to minimize changes in production rates.
True
One type of cost considered when preparing a sales and operations plan is inventory holding cost.
True
Operations planning and scheduling is the process of making sure demand and supply plans are in balance.
True
Revenue management is a way to manage demand by varying price at the right time for various customer segments to maximize revenues generated from existing supply capacity.
True
Scheduling involves generating a work schedule for employees or sequences of jobs or customers at workstations.
True
Scheduling is the day-to-day allocation of resources to accomplish specific tasks
True
The Gantt chart can be used as a tool for sequencing work on machines and monitoring its progress
True
The best mix of full- and part-time employees is a sales and operations planning decision.
True
The fast food restaurant had a happy hour drink special, 96 ounces of your favorite beverage for the price of only 64 ounces, from 2 pm to 4 pm. This is an example of promotional pricing used to manage demand.
True
The sales and operations plan typically has a one-year planning horizon
True
The terms "aggregate plan" and "sales and operations plan" are synonymous
True
Undertime is the situation that occurs when employees do not have enough productive work for the regular-time workday or workweek.
True
A sales and operations plan is sometimes called a(n) ________.
aggregate
The three methods commonly used to schedule customer demand are ________, ________, and ________.
appointments reservations backlogs
________ is the accumulation of customer orders that have been promised for delivery at some future date.
backlog
A(n) ________ is a projected statement of income, costs, and profits.
business plan
The lawn mower manufacturer decided to produce snow blowers to stay busy year-round. These two devices can be described as ________.
complementary products
________ are products or services having similar resource requirements but different demand cycles.
complementary products
________ are actions that attempt to modify demand and, consequently, resource requirements.
demand options
The ________ takes the master production schedule and derives plans for components, purchased materials and workstations.
material requirements plan
The ________ is the length of time covered by a sales and operations plan.
planning horizon
A group of customers, services, or products that have similar demand requirements and common process, labor, and materials requirements is called a(n) ________.
product family
Incentives such as two-for-one promotions or charging less for off-peak use of production or service facilities is an example of ________.
promotional pricing
A(n) ________ is a statement of production rates, workforce levels, and inventory holdings based on estimates of customer requirements and capacity limitations.
sales and operations plan
A(n) ________ is an order that cannot be satisfied when demanded and causes the customer to go elsewhere.
stockout
The ________ translates the staffing plan into specific workdays for each employee.
workforce schedule