OPM 311 CH 8 HW

All companies have a formal S&OP process.

False

The master production schedule is a crucial input into the aggregate operations plan.

False

The planning cycle for S&OP is typically done quarterly in high performance manufacturing businesses.

False

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.

False Aggregation on the supply side is done by product families, and on the demand side it is done by groups of customers and converted to Product Families.

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

False The sales and operations planning process consists of a series of meetings, finishing with a high-level meeting where key intermediate-term decisions are made.

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

False Typically, sales and operations planning occurs on a monthly cycle.

Maintaining a stable workforce working at a constant output rate while shortages and surpluses are absorbed by fluctuating inventory levels, order backlogs and allowing lost sales is which of the following production planning strategies? Skill maintenance Stable workforce, variable work hours Chase Level Full employment

Level A level strategy maintains a stable workforce working at a constant output rate with shortages and surpluses absorbed by fluctuating inventory levels, order backlogs, and lost sales.

Typically there is a weekly review meeting in the S&OP process. This is referred to as the Demand Review. This meeting is designed to: Review MTD demand actual against the demand "plan of record" Communicate the "plan of record" to the organization. Preview production levels as compared to the Demand Plan "plan of record". Review mid-month metrics for performance with management

Review MTD demand actual against the demand "plan of record"

The aggregate operations planning variable "inventory on hand" refers to the balance of unused inventory carried over from the previous time period.

True

The aggregate operations planning variable "production rate" refers to the number of units completed per unit of time.

True

There are often multiple levels in an S&OP process in larger manufacturing companies.

True

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

True (Under relevant cost:) Costs associated with changes in the production rate. Typical costs in this category are those involved in hiring, training, and laying off personnel.

Firms that match the production rate to the order rate by hiring and laying off employees as the order rate varies are following what is known as the chase strategy.

True Chase strategy: Match the production rate to the order rate by hiring and laying off employees as the order rate varies

The aggregate operations planning variable "workforce level" refers to the number of workers needed to accomplish the planned production.

True Workforce level is the number of workers needed for production (Production = production rate x workforce level).

The best time for an S&OP review is: at the beginning of each financial quarter at the beginning of each month incorrect at the end of each month at the end of each quarter

at the beginning of each month

The normal planning horizon for an S&OP process in a manufacturing firm is: 12-24 months 1-9 months 3-5 years 3-6 months

12-24 months

Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec Demand Plan 25 22 23 25 28 22 22 23 28 29 30 17 Production Plan Inventory Plan Starting Inventory 20 Ending Inventory 8 Given this Demand Plan, in a MTS environment what would be the average monthly Production Plan? (To the nearest single decimal). Note that the starting inventory (20) is as of the end of Dec in prior year and ending inventory is planned at the end of the upcoming Dec. 24.5 22.5 23.5 26.7

23.5 The Production Plan is the Demand Plan (294) plus or minus the difference in inventory (12) divided by the number of periods. (294 - 12)/12 = 23.5 Since the inventory has to drop from 20 to 8 you subtract the 12.

If, in an MTS organization there was a starting inventory of 500 units, and the demand plan for the next 6 months was: 500, 600, 800, 900, and 400 and the target inventory for the end of this planning horizon was 250, what would the production plan total be for these 6 months? 3700 2700 3200 2950

2950

The recommended number of product groupings in an S&OP process is: 2-5 10-20 1-4 6-12

6-12