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Q:
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
Q:
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.
Q:
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.
Q:
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.
Q:
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
Q:
A customer is given a due date for their product order with:
A) backlog.
B) reservation.
C) service on demand.
D) appointment.
Q:
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.
Q:
As October came to a close, Geoff updated the sales and operations plan with figures for actual sales, production, inventory, costs, and constraints before turning the production staff's attention to November, a process known as:
A) planning.
B) rolling.
C) closing out.
D) pencil whipping.
Q:
Once a demand forecast has been entered into a sales and operations plan, it cannot be updated since it would skew the process results.
Q:
Investment return that is unrealized by stocking raw materials and finished goods can be classified as holding cost.
Q:
One type of cost considered when preparing a sales and operations plan is inventory holding cost.
Q:
A level strategy matches demand during the planning horizon by varying either the workforce level or the output rate.
Q:
What is anticipation inventory and what are the benefits and drawbacks of having it?
Q:
Pick any manufacturing organization and describe some supply options at their disposal.
Q:
A company can meet short-term capacity shortages by arranging with ________ outside of their normal workforce to provide necessary services.
Q:
________ is the situation that occurs when employees do not have enough work for the regular workday or workweek.
Q:
________ is the situation that occurs when employees work longer than the regular workday or workweek.
Q:
________ takes advantage of the tangible nature of manufactured goods to absorb uneven rates of supply and demand.
Q:
The university housekeeping and maintenance staff was cut by 50% during late December and early January when students were home breaking things and trashing their parents' houses instead of university property. This type of schedule for housekeeping and maintenance workers is a(n):
A) vacation schedule.
B) part time schedule.
C) undertime schedule.
D) seasonal schedule.
Q:
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.
Q:
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
Q:
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.
Q:
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.
Q:
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.
Q:
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.
Q:
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
Q:
Jake reports to the courier department Monday through Friday and stays from 9 am to 5 pm but many times does not have enough work to keep him busy. Regardless, he is paid for a full eight hours even on those days when he spends more time on social media than delivering supplies. This is an example of undertime.
Q:
Undertime is the situation that occurs when employees do not have enough productive work for the regular-time workday or workweek.
Q:
One distinction between manufacturing and services that affects sales and operations plans is that services have difficulty creating inventories in anticipation of uneven demand.
Q:
Anticipation inventory is used to absorb uneven rates of demand or supply.
Q:
Firms that are most likely to use backlogs tend to have a make-to-order strategy.
Q:
Some ways to manage demand include building anticipation inventories of goods and hiring or laying off employees.
Q:
The Acme Company is a cosmetics manufacturing company with corporate offices in Indianapolis. Explain how corporate goals and objectives developed as a business plan in Indianapolis become the tangible plans and steps that are actually implemented in Acme's remote production plants located in Virginia, Ohio and Arizona.
Q:
What is a product family?
Q:
How can the workforce be aggregated?
Q:
What is the impact of the sales and operations plan on the human resources and finance functions of a firm?
Q:
The ________ takes the master production schedule and derives plans for components, purchased materials and workstations.
Q:
The ________ is a schedule that specifies the timing and size of production quantities for each product in the product family.
Q:
The ________ is the length of time covered by a sales and operations plan.
Q:
A group of customers, services, or products that have similar demand requirements and common process, labor, and materials requirements is called a(n) ________.
Q:
A sales and operations plan is sometimes called a(n) ________.
Q:
A service firm's sales and operations plan, called a(n) ________, centers on staffing and other labor-related factors.
Q:
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.
Q:
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.
Q:
The lowest planning level in a sales and operations plan is:
A) resource planning.
B) forecasting.
C) scheduling.
D) sales and operations planning.
Q:
The intermediate link between the business plan and the MPS is the:
A) annual plan.
B) production plan.
C) financial plan.
D) workforce schedule.
Q:
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.
Q:
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.
Q:
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 - 60 months.
Q:
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.
Q:
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.
Q:
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.
Q:
The employees of Global Bike Incorporated specialized in either their mountain bike or touring bike line, but there were a few workers that were equally adept at assembling either product. For sales and operations planning purposes, the latter group could be:
A) aggregated.
B) reassigned.
C) subcontracted.
D) overtimed.
Q:
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.
Q:
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) a marketing plan.
D) a process plan.
Q:
A sales and operations plan for a service firm is:
A) a staffing plan.
B) a process plan.
C) a marketing plan.
D) a production plan.
Q:
A master production schedule is a schedule that specifies the timing, size, and sequence of production for aggregated product families.
Q:
A services firm's sales and operations plan generates both a production plan and a staffing plan.
Q:
A manufacturing firm's sales and operations plan generates both a production plan and a staffing plan.
Q:
The sales and operations plan typically has a one-year planning horizon.
Q:
For the student advisement service at a university, business majors and education majors would constitute two different product families.
Q:
A product family is a group of customers, services, or products that have similar demand requirements and common processes, labor, and materials requirements.
Q:
When performing sales and operations planning, companies can aggregate products or services but not members of their workforce.
Q:
The terms "aggregate plan" and "sales and operations plan" are synonymous.
Q:
Operations planning and scheduling is the process of making sure demand and supply plans are in balance.
Q:
10.1 Levels in Operations Planning and Scheduling
Q:
Which one of the following statements is best?
A) The level of safety stock maintained decreases when the desired cycle-service level increases.
B) The level of safety stock maintained decreases when the standard deviation of demand during lead-time increases.
C) When no safety stock is maintained, stockouts will occur during approximately 50% of the cycles.
D) The level of safety stock maintained is greater if mean absolute deviation (MAD) is used rather than standard deviation in estimating forecast errors.
Q:
Which one of the following descriptions best defines the cycle-service level as a measure of customer service?
A) the preferred proportion of annual demand instantaneously filled from stock
B) the number of stockouts tolerated per year
C) the preferred proportion of days in the year when an item is in stock
D) the desired probability of not running out of stock in any one inventory cycle
Q:
Which one of the following statements concerning a continuous review system is best?
A) The inventory position (IP) of an item measures the item's ability to satisfy future demand, relying only on the on-hand inventory.
B) An item's inventory position under a continuous review system increases by Q units as soon as an order is received.
C) An item's on-hand inventory increases by Q units as soon as an order is placed.
D) Under a continuous review system, an item's inventory position corresponds to the on-hand inventory unless there are backorders or one or more scheduled receipts.
Q:
The two-bin inventory system is a type of visual system.
Q:
As the service level increases, the probability of not running out of stock during a cycle decreases.
Q:
The scheduled receipts are orders that have been placed but not yet received.
Q:
A continuous review system is sometimes called a fixed interval reorder system.
Q:
A continuous review system is sometimes called a reorder point system.
Q:
If on-hand inventory = 100 units, scheduled receipts = 100 units and backorders = 100 units, the Inventory Position (IP) is 100 units.
Q:
If on-hand inventory = 100 units, scheduled receipts = 100 units and backorders = 100 units, the Inventory Position (IP) is the sum of the three, or 300 units.
Q:
A company governed by an EOQ system decides to move in a more lean direction and hopes to reduce their Q as much as possible. What specific steps might be taken to help them in their journey towards a Q = 1?
Q:
A Theory of Constraints (TOC) advocate visits your factory and seems bemused by your use of EOQ to set your batch sizes. You launch into a brilliant defense of the EOQ. The TOC advocate grabs a piece of chalk and proceeds to sketch two sets of inventory cost curves on your pristine shop floor. What will his two different sets of cost curves look like and why?
Q:
What production strategies should not employ an EOQ approach to ordering? Why?
Q:
What assumptions are made in calculating the economic order quantity? Which of these assumptions is the least realistic? Why?