SmartBook--Chapter 19: Sales and Operations Planning

Four costs are relevant to the aggregate production plan. Match each with its description. - Basic production costs - Costs associated with changes in the production rate - Inventory holding costs - Backordering costs - Usually, there are very hard to measure and include costs of expediting, loss of customer goodwill, and loss of sales revenues resulting from missed sales. - A major component is the cost of capital tied up in material in storage. - Typical costs in this category are those involved in hiring, training, and laying off personnel. - These are the fixed and variable costs incurred in producing a given product type in a given time period.

- Basic production costs: These are the fixed and variable costs incurred in producing a given product type in a given time period. - Costs associated with changes in the production rate: Typical costs in this category are those involved in hiring, training, and laying off personnel. - Inventory holding costs: A major component is the cost of capital tied up in material in storage. - Backordering costs: Usually, there are very hard to measure and include costs of expediting, loss of customer goodwill, and loss of sales revenues resulting from missed sales.

Select all that apply Which of the following operations and supply planning tasks are related to service? Check all that apply.

- Daily workforce scheduling - Weekly workforce scheduling

Long-range planning activities are which of the following? Check all that apply.

- Designing the manufacturing and service processes that produce the products of the firm. - Designing the logistics activities that deliver products to the customer.

Which of the following are required inputs to the production planning system? Check all that apply. - External capacity - Number of factors planned for the future - Profit levels - Planned workforce expansions - Economic conditions - Current physical capacity - Inventory levels - Raw material availability - Market demand - Activities required for production - Competitors' behavior

- External capacity - Economic conditions - Current physical capacity - Inventory levels - Raw material availability - Market demand - Activities required for production - Competitors' behavior

Sales and operations planning specifically helps businesses with which of the following? Check all that apply.

- General management - Inventory management - Customer service and delivery lead times - Production rate stabilization

Which of the following are internal to the firm inputs to the production planning system? Check all that apply.

- Inventory levels - Current workforce - Current physical capacity - Activities required for production

Click and drag on elements in order Place these in order from least frequent at the top to most frequent at the bottom. - Long-range planning - Intermediate-range planning - Short-range planning

- Long-range planning - Intermediate-range planning - Short-range planning

Select all that apply Sales and operations planning typically requires an integrated effort and cooperation from the following organizations:

- Sales - Distribution and Logistics - Finance - Product Development - Operations

Sales and operations planning is made up of two components. What are they? Check both of them.

- Sales plan - Aggregate operations plan

Which of the following would be a complementary product for a lawnmower manufacturer?

- Snowmobiles - Snowblowers - Leaf blowers

In aggregate planning, if capacity is inadequate, additional capacity can be added using which of the following? Check all that apply.

- Subcontracting - Overtime - Extra workers

The main purpose of the aggregate plan is to specify the optimal combination of what? Check all that apply.

- Workforce level - Production rate - Inventory on hand

Long range planning is generally done _____ and for a time horizon greater than ______year(s).

- annually - 1

Sales and operations planning requires teamwork between which departments? Check all that apply.

- marketing - sales - distribution - logistics - operations - finance - product development.

In a stable workforce - variable work hours plan, one varies the _____ by varying the number of ______ worked through flexible schedules and overtime.

- output - hours

With subcontracting, a manufacturer can lose some control over what? Check all that apply.

- schedule - quality

The end goal of a sales and operations planning meeting is to find the best course of actions to achieve the optimal balance between _____ and _____

- supply - demand

The time horizon for an aggregate operations plan ranges from _____ to _____ months.

-3 -18

From an operation perspective, yield management is most effective when which of the following is true? Check all that apply. - Price is fixed or nearly fixed - Fixed costs are high and variable costs are low - Inventory is perishable - Product can be sold in advance - Demand is highly variable - Demand can be segmented by customer - The firm is short of inventory

-Fixed costs are high and variable costs are low -Inventory is perishable -Product can be sold in advance -Demand is highly variable -Demand can be segmented by customer

_____ _____ entails refined measurement of historical demand patterns blended with expert judgment to determine when to begin production of particular items.

Blank 1: Accurate Blank 2: Response

In using price to manage yield, pricing structures must appear logical to the customer and justify the different prices. Such justification is commonly called _____ _____

Blank 1: rate Blank 2: fences

Short-term details are focused mostly on _____ _____ and shipment orders.

Blank 1: scheduling Blank 2: production

Yield management is the process of allocating which of the following to maximize revenue?

Capacity

_____ products may work for firms facing cyclical demand fluctuations.

Complementary

Another approach is to develop the aggregate plan by simulating various master production schedules and calculating corresponding capacity requirements to see what?

If adequate labor and equipment exist at each workcenter.

Spoilage and obsolescence costs are considered what type of relevant cost?

Inventory holding costs

Which of the following are internal factors that influence a production plan?

Inventory levels

Match these planning horizons with their descriptions. -Long-range planning -Intermediate-range planning -Short-range planning -Involves a time period of usually 3 to 18 months -One year or more -From a day to six months

Long range planning: Intermediate-range planning: Short range planning: From a day to six months.

_____ strategies are more widely applied in industry.

Mixed

Typically, sales and operations planning occurs on what type of cycle?

Monthly

What process gives senior management a better handle on the meeting customer demand over a 3 to 18 month time horizon?

Sales & operations planning

True or false: Distribution and logistics is typically involved in sales and operations planning.

True

True or false: Intermediate-term plan activities include forecasting.

True

The number of workers needed to meet production requirements is called?

Workforce level

Subcontracting production is similar to a _____ strategy, but differs in that it doesn't use company employees to meet customer demand.

chase

In production planning, adjusting the production rate by hiring and laying off employees to match the sales forecast is called a:

chase strategy

The determination of expected _____ is the focus of forecasting and demand management.

demand

There are limits to how much ______ can be controlled.

demand

On the service side, short-term scheduling of _____ is needed to ensure that adequate customer service is provided and fair worker schedules are maintained.

employees

Top management considers an aggregate operations plan a(n) ______term planning tool.

intermediate

The main purpose of an aggregate plan is to specify the:

optimal combination of production rate, workforce level and inventory on hand

From a logistics point of view, supply network planning determines how the product will be distributed to the customer on the _____ side.

outbound

On the supply side of the business, aggregate planning is done by:

product families

The number of units completed per unit of time is called the _____ rate

production

When an organization consistently uses a single variable only to modify production plans, such as, hiring/firing employees, it is likely deploying a _____ strategy

pure

If capacity is sufficient for peak demand, price _____to stimulate off-peak demand should be the focus of yield management.

reductions

By simulating various master production schedules and calculating corresponding capacity, labor and equipment requirements, one is developing a(n):

rough-cut plan

A common approach to developing an aggregation operations plan is from:

the corporate annual plan