Exam 10: Sales and Operations Planning Aggregate Planning

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. It is possible to outsource some production, as long as the total output is limited to less than ten percent of total output. 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 is a necessary task for all companies, but is never a source of competitive advantage.

At the beginning of the semester, you decide to devote 12 hours a week outside of class time to your operations management studies, regardless of scheduled tests, assignments, or project due dates. This is a level plan approach to your favorite course.

How can and why should a firm link S&OP throughout the supply chain?

Planning values are used in bottom-up planning, but cannot be used in top-down planning.

A home improvement store adds several workers to the garden center in the summer in order to meet the demands of do-it-yourselfers for their dazzling array of plants. Once gardening season is over, both the workers' jobs (and the plants they sold)will perish. The home improvement store is following an offloading strategy.

Last month a firm made 100 model A's using all of their available labor. If they have already taken orders for 150 model A's for next month, then their planning value must be 1.5.

Last month, the sales and operations plan showed projections from January through April. This month, the sales and operations plan shows projections from February through May. This is an example of a rolling planning horizon.

What is the purpose of S&OP and what takes place at the strategic, tactical, and detailed planning and control levels?

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 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 an objective function and constraints to solve this problem. Month Forecast Fanuary 250 February 200 March 300 April 400 May 500

A(n)________ production plan matches production in each time period with the sales forecast.

Describe how both top-down and bottom-up planning work and the situations where one approach is superior to the other.

A(n)________ is a formula that is the goal of an optimization model for S&OP.

Seventy percent of a house painter's business is exterior work and the other thirty percent is interior. The average exterior paint job takes 20 hours of labor and $400 of paint and primer, but the average interior job takes only 6 hours of labor and $75 of paint and primer. If he gets 20 service calls for the coming month, which of the following resource requirements is correct?

A company has a sales forecast for the following five months as shown in the table. If they have a beginning inventory of 100 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 350 February 400 March 300 April 500 May 350

Among strategic, tactical and detailed planning, it is ________ planning that presents managers with the fewest options for altering capacity.

Sales and operations plans must be updated as time progresses, so most firms establish a(n)________.

Sales and operations planning across a supply chain is similar in nature to collaborative planning, forecasting, and replenishment.

A production planner can confirm future capacity requirements based on released or planned orders by referring to a(n)________.

It costs $10 to make a single unit using regular production and $15 to make a single unit using overtime production. Finished units sell for $17 and are built to order. The manufacturing plant has a regular production capacity of 250 units per month and no inventory at the start of the planning period. What is the BEST net cash flow for the entire planning period if the manufacturer uses a chase plan? Month Forecast Tanuary 250 February 200 March 300 April 400