OSCM Final Chapter 19

If expected demand during the next four quarters is 150, 125, 100, and 75 thousand units, and each worker can produce 1,000 units per quarter, how many workers should be used if a level strategy is being employed?

113

Given the data from question 7, how many workers would be needed for a chase strategy?

150, 125, 100, 75

From an operational perspective, yield management is most effective when

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

In a service setting, what general operations-related variable is not available compared to a production setting?

Inventory

Maintain a stable workforce working at a constant output rate. Shortages and surpluses are absorbed by fluctuating inventory levels, order backlogs, and lost sales.

Level strategy

Vary the output by varying the number of hours worked through flexible work schedules or overtime.

Stable workforce—variable work hours

The objective of the __________________ is to minimize the cost of resources required to meet demand over that period.

The objective of the aggregate operations plan is to minimize the cost of resources required to meet demand over that period.

The practice of allocating capacity and manipulating demand to make it more predictable.

Yield management

the main purpose of the ____________ plan is to specify the optimal combination of production rate, workforce level, and inventory on hand.

aggregate

translates annual and quarterly business plans into broad labor and output plans for the intermediate term (3 to 18 months).

aggregate operations plan

The output of the sales and operation planning process is the

aggregate plan

a high-level operational plan that can be executed by the operations and supply chain functions.

aggregate plan

what are the four costs relevant to aggregate production plan

basic production costs costs associated with changes in the production rate inventory holding costs backorder costs

A strategy where the production rate is set to match expected demand.

chase

Match the production rate to the order rate by hiring and laying off employees as the order rate varies.

chase strategy

__________ planning activities include forecasting and demand management, as well as sales and operations planning.

intermediate-range planning

is unused inventory carried over from the previous period.

inventory on hand

a ___________ schedule holds production constant over a period of time.

level

A strategy that uses inventory and backorders as part of the strategy to meet demand.

level strategy

__________ planning activities include the design of the manufacturing and service processes that produce the products of the firm, and the design of the logistics activities that deliver products to the customer.

long-range

two or more used in combination constitute a

mixed strategy

refers to the number of units completed per unit of time (such as per hour or per day).

production rate

When doing aggregate planning, these are the three general operations-related variables that can be adjusted.

production rate, workplace level, inventory

When just one of these variables is used to absorb demand fluctuations, it is termed a

pure strategy

Term used to refer to the process a firm uses to balance supply and demand.

sales and operations planning

The term ________________________ was coined by companies to refer to the process that helps firms keep demand and supply in balance, which was originally called aggregate planning.

sales and operations planning

___________ planning activities are focused mostly on scheduling production and shipment orders.

short-term

When overtime is used to meet demand and avoid the costs associated with hiring and firing.

stable workforce - variable work hours

Sometimes a firm may choose to have all or part of the work done by an outside vendor. This is the term used for the approach.

subcontracting

Yield management is most common when price is __________ and duration is _____________.

variable, predictable

is the number of workers needed for production (production = production rate × workforce level).

workforce level

can be defined as the process of allocating the right type of capacity to the right type of customer at the right price and time to maximize revenue or yield

yield management