MS350 Chapter 8

Short-range planning covers a period from one day to ____________ months.

6

The cut-and-try approach to aggregate planning may involve which of the following? Analyzing a number of production planning alternatives. Use of spreadsheets and charts. Selecting the best alternative. Choosing the first feasible plan identified.

Analyzing a number of production planning alternatives. Use of spreadsheets and charts. Selecting the best alternative.

Some trade-offs associated with using a level strategy for production planning are? Decreased customer service levels. Variable production rates. Increased inventory costs. Low employee morale.

Decreased customer service levels. Increased inventory costs.

True or false: The cut-and-try approach will always identify the aggregate plan with the lowest overall cost.

False

Sales and operations planning typically requires an integrated effort and cooperation from the following: Accounting Finance Distribution and Logistics Operations Sales Product Development Human Resources

Finance Distribution and Logistics Operations Sales Product Development

Which if the following actions would be possible in a stable workforce-variable work hours plan? Having workers take time off to reduce production. Hiring and laying off employees Building inventory during slow periods Asking workers to work overtime.

Having workers take time off to reduce production. Asking workers to work overtime.

Cross-functional teams from which of the following are involved in the sales and operations planning (S&OP) process? Logistics Marketing Purchasing Product development

Logistics, marketing, product development

Which of the following are benefits of the sales and operations planning process? Lower inventory Better customer service Stabilized production rates Higher quality

Lower inventory, better customer service, stabilized production rates

Which of the follow is not an operations and supply chain task performed in an intermediate-range plan? Sales and operations planning Make vs. buy assessment Demand management Forecasting

Make vs. buy assessment

A chase strategy can create what major concern?

Motivational impacts due to fear of being laid off during time of low production.

Sales and operations planning specifically helps businesses with the following: Production rate stabilization Inventory management General management control Customer service and delivery lead times Potential customer sales lead generation

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

Which of the following are issues that arise in managing yield? The customer must feel the pricing structures are logical. Variability in arrival times, starting times, duration, and time between customers. Managing the service process so capacity can quickly be reallocated or added. Inventory that has not arrived on time will delay production.

The customer must feel the pricing structures are logical. Variability in arrival times, starting times, duration, and time between customers. Managing the service process so capacity can quickly be reallocated or added.

Which of the following statements about aggregate operations plans is true? The plan is generally stated in aggregate units rather than specifying particular products. Once the plan is developed, it is not updated regardless of conditions. The plan may be developed by simulating a number of master production schedules to choose the best option. The plan may be derived from the corporate plan.

The plan is generally stated in aggregate units rather than specifying particular products. The plan may be developed by simulating a number of master production schedules to choose the best option. The plan may be derived from the corporate plan.

Hiring temporary employees is a way to avoid the costs of training and laying off personnel.

True

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

True

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

True

True or false: Yield management is most effective when products can be sold in advance.

True

One key to a successful budgeting process is a(n) ______ aggregate plan.

accurate

During the sales and operations planning process, both marketing and operations focus on the __________ product and sales volumes.

aggregate

Which of the following is likely to be a rate fence at a hotel? Room with a mountain view Breakfast and dinner included Unlimited use of the internet All of the above

all of the above

Long-range planning is generally done _______ and for a time horizon greater than ____________ year(s).

annually; one

Which relevant costs are often the most difficult to measure?

backordering costs

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

capacity

A major component of inventory holding costs is often the cost of ________ tied up in inventory.

capital

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

Production rate is matched to order rate by hiring and firing employees.

chase strategy

A ___________ product is one that may help smooth cyclical demand fluctuations.

complementary

Yield management is defined as the process of allocating the right type of capacity to the right type of ______ at the right price and ________ to maximize profit.

customer; time

Aggregation on the demand side is done by groups of __________

customers

One simple means of developing aggregate plans, which involves analyzing various alternative plans and selecting the best one, is called ______-and-______.

cut-and-try

From an operation perspective, yield management is most effective when demand is stable. demand can be segmented by customer. inventory can be stored for long periods of time. fixed costs are high and variable costs are low.

demand can be segmented by customer. fixed costs are high and variable costs are low.

Long-range planning activities include purchasing materials for production. developing the optimal production workforce plan to meet the sales forecast. designing the logistics activities that deliver products to the customer. designing the manufacturing and service processes that produce the products of the firm.

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

In a service organization, short-range scheduling focuses on

employees

When product shortages occur, which of the following costs may be incurred? Inventory holding costs Expediting costs Loss of sales revenue Loss of goodwill

expediting costs; loss of sales revenue; loss of goodwill

True or false: It is not necessary for the operational plan to align with the business plan.

false

Basic production costs consist of _______ and __________ costs incurred in producing a given product type in a given time period.

fixed; variable

The production rate is measured in units of time, such as per ______ or per _________ .

hour; day

Services often measure cycles in _______ rather than _______ used in manufacturing.

hours; months

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

inventory holding costs

Unused inventory that is carried over from the previous period is called?

inventory on-hand

Basic production costs consist mainly of charges related to

labor

In production planning, a ____ strategy is executed by maintaining a stable workforce and producing output at a constant rate.

level

maintain a stable workforce and work schedule while using inventory to meet variation in demand.

level strategy

Activities such as designing of manufacturing and service processes or designing logistics activities are part of the ____-range planning process.

long

When using the cut-and-try approach, you may not find all costs in the accounting records. You may need to get them indirectly from ________ personnel.

management

The goal of a yield management system is to

maximize profit or revenue

If an organization is using overtime, hiring/firing employees, and subcontracting to modify production plans, it is likely deploying which type of production strategy?

mixed

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

output; hours

Aggregate plans vary from company to company based on size and need, formal reports generally contain

planning premises that lead to planning objectives

The aggregate operations plan _________ the master schedule.

precedes

Inventory on-hand is the amount of inventory carried over from the ________ period.

previous

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

product families

The aggregate operations plan's objective is to set ________ rates for the intermediate term, from 3 to 18 months.

production

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

production

Short-range operations and supply chain tasks are focused mostly on scheduling ________ and _________ orders.

production and shipment

Hiring, training, and laying off personnel are costs associated with

production rate changes

The aggregate operations plan is mainly concerned with optimal production rates. workforce levels. purchasing. quality assurance.

production rates; workforce levels

Before investigating alternative production plans, demand forecasts should be converted into

production requirements

The workforce level can be determined by which calculation?

production/production rate

When an organization consistently uses a single variable only to modify production plans, such as, hiring/firing employees or building/depleting inventory, it is likely deploying a _________ strategy.

pure

A means of justifying a price difference to customers (such as first-class airline seats) is known as a _______ fence

rate

Accurate medium-range planning can increase the likelihood of reducing inventory expenditures. receiving the requested budget. utilizing a chase strategy. operating within the limits of the budget.

receiving the requested budget. operating within the limits of the budget.

A ______-______ aggregate plan may be further modified by mathematical methods to develop a final and/or lower-cost plan.

rough-cut

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

rough-cut aggregate plan

The planning process that helps firms provide better customer service, shorter lead times, and allows top management to get a handle on the business is known as ____ planning.

sales and operations

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

sales and operations management

A key issue in operating a yield management system is managing the __________ process.

service

Production output is varied by changing work schedules to include overtime (when more production is needed) and idle time (when less production is needed).

stable workforce - variable work schedule

When a manufacturer uses a _________ strategy there is a risk of losing control of the schedule and/or quality.

subcontracting

The end goal of a sales and operations planning meeting is to find the best course of action to achieve the optimal balance between __________ and ___________ .

supply and demand

In plan 2 of our aggregate production plan, the constant number of workers is calculated by finding _____

the average number of workers required each day over the horizon

A common approach to developing an aggregate operations plan is from

the corporate annual plan

Yield management allocates capacity according to type of customer. type of capacity. payment method. time.

type of customer. type of capacity. time.

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

workforce level

Production planning strategies involve trade-offs among production schedule. size of production facility. workforce size. inventory.

workforce size; inventory