Exam 10: Sales and Operations Planning Aggregate Planning

A hotel using yield management would ________ prices if demand is higher than expected only if the expected result is ________.

Create a minimum cost chase plan for the forecast shown in the table. There is no beginning inventory and regular production capacity is 350 units. Overtime costs $20 extra and is limited to 50 units per month and subcontracting is limited to 100 units per month and costs $15 per unit. Back orders cost $40 per unit and there is a cost of $5 per month to hold a unit in inventory. There is room for only 100 units in inventory. What is the total plan cost above regular production cost? Month Forecast Regular Overtime Subcontracting Ending Inventory January 250 February 400 March 500 April 350

The standard equation used by Gigi Enterprises for production planning is Production = Demand. The sales and operations planner is probably using:

What is the ending inventory level for April in the production plan shown in the table? All entries in the table are in terms of sales units. Month Forecast Regular Production Overtime Production Ending Inventory Tanuary 250 250 0 0 February 200 300 0 March 300 325 25 April 500 400 25

An organization with twenty people developing sales and operations plans might receive twenty different proposals. What are some factors an organization might consider when deciding among these alternative plans? Provide a ranking for your factors and support your ranking with examples from recent business news media.

It costs $12 to make a single unit using regular production and $15 to make a single unit using overtime production. Total overtime production is limited to 500 units for the five month period. The manufacturing plant has a regular production capacity of 250 units per month and has 50 units in inventory at the start of the planning period. There is a $5 per unit charge for holding inventory at the end of each month and a limit of 250 units ending inventory for any period. Develop a minimum cost production plan if the forecast must be met and costs must be minimized. Month Forecast Tanuary 250 February 200 March 300 April 400 May 500

A sales and operations plan that varies both production and inventory levels is called a(n)________ production plan.

It costs $20 to make a single unit using regular production and $25 to make a single unit using overtime production. Total overtime production is limited to 50 units for the five-month period. The manufacturing plant has a regular production capacity of 300 units per month and no units in inventory at the start of the planning period. There is a $10 per unit charge for holding inventory at the end of each month and the ending inventory of the five-month planning period should be zero. Develop an objective function and constraints to solve this problem. Month Forecast August 250 September 200 October 300 November 400 December 500

Sales and operations planning indicates how the organization will use its tactical capacity resources to meet expected customer demand.

Distinguish between strategic, tactical and detailed planning and control in terms of their ability to adjust capacity, the amount of risk, and the specificity of the plans.

Regular production costs $13 per unit and selling a unit represents a cash inflow of $28 per unit. Assume that all units reflected on the forecast will be sold. What is the cumulative net cash flow through March? Month Forecast Regular Production Tanuary 250 250 February 200 200 March 300 300 April 400 400

A constraint in an optimization modeling approach to S&OP should not allow overscheduling of equipment time.

A company that makes the rocket widget has one machine capable of producing this unique item. The machine requires an attendant, who works 40 hours a week for $12 per hour and has made himself available for a maximum of 8 hours of overtime. It costs $20 per hour to run the machine and it is capable of producing 10,000 rocket widgets per hour. The widgets sell for $10 per hundred and cost $1 per hundred in materials. If the production manager wishes to develop a sales and operations plans using an optimization model, which of the following statements is valid?

Sales and operations planning should inform all members of the supply chain what to do and what not to do.

A company pondering the implementation of S&OP should first:

Regular production costs $15 per unit and selling a unit represents a cash inflow of $25 per unit. Assume that all units reflected on the forecast will be sold. What is the net cash flow for March? Month Forecast Regular Production Tanuary 250 250 February 200 200 March 300 300 April 400 400

A company that makes the rocket widget has one machine capable of producing this unique item. The machine requires an attendant, who works 40 hours a week for $12 per hour and has made himself available for a maximum of 8 hours of overtime. It costs $20 per hour to run the machine and it is capable of producing 10,000 rocket widgets per hour. The widgets sell for $10 per hundred and cost $1 per hundred in materials. If the production manager wishes to develop a sales and operations plans using an optimization model, which of the following statements is valid?

Tactical capacity resources include:

The purpose of aggregate planning is to help businesses develop effective ________ plans.

A company has a sales forecast for the following five months as shown in the table. If they have a beginning inventory of 350 units, what amount should be produced under a level plan in order for them to have an ending inventory of zero units at the end of the five-month period? Month Forecast Tanuary 525 February 600 March 650 April 750 May 875