Exam 14: The Sales and Operations Planning Process

A bagel company bakes a specialty bagel that it sells by the dozen every day.These specialty bagels can only be baked early in the morning before the store opens for business.The company estimates that the daily demand (in dozens)for its specialty bagel is distributed as follows: Specialty bagels are sold by the dozen only at a cost of $9.00 per dozen.The cost to bake each bagel is $0.50.Leftover specialty bagels are sold by the dozen the next day for a 50% discount.The bagel company's cost of underestimating demand,C_u,is

The following information relates to a company's aggregate production planning activities: Beginning Workforce = 125 workers Production per Employee = 500 units per quarter Hiring Cost = $750 per worker Firing Cost = $1,500 per worker Inventory Carrying Cost = $10 per unit per quarter If a level production strategy is used the number of units to produce each quarter is

The search decision rule (SDR)is an algorithm that

A hot dog vendor must decide on Monday how many hot dogs to have available for the coming Saturday's football game.Each hot dog costs the vendor $3.00 and is sold for $5.00.After the game any unsold hot dogs are discounted and sold to the university cafeteria for $1.75.The vendor believes that the demand for hot dogs follows the probability distribution shown below: The optimal number of hot dogs the vendor should order for next Saturday's game is

What are the outputs of aggregate planning?

A company is developing a linear programming model for its aggregate production plan.Each worker can produce 500 units per quarter.If Wt = workforce size in period t and Pt = number of units produced in period t,then the production constraint for period 3 is

The following information relates to a company's aggregate production planning activities: Beginning Workforce = 125 workers Production per Employee = 500 units per quarter Hiring Cost = $750 per worker Firing Cost = $1,500 per worker Inventory Carrying Cost = $10 per unit per quarter If a level production strategy is used the total cost of the production plan (hiring cost,firing cost,and inventory cost)is

When demand fluctuations are extreme using overtime and undertime is a feasible strategy for adjusting capacity.

A company is developing a linear programming model for its aggregate production plan.If I_t = units in inventory at the end of period t,P_t = units produced in period t,and D_t = demand in period t,then the company's demand constraint to ensure that demand is met in quarter 2 is

The following information relates to a company's aggregate production planning activities: Beginning Workforce = 35 workers Production per Employee = 1,250 units per quarter Hiring Cost = $500 per worker Firing Cost = $1,000 per worker Inventory Carrying Cost = $20 per unit per quarter If a level production strategy is used then the required quarterly output is

Yield management seeks to maximize profit from time-sensitive products and services.

Most companies use mixed strategies for managing demand.

The following information relates to a company's aggregate production planning activities: Beginning Workforce = 35 workers Production per Employee = 1,250 units per quarter Hiring Cost = $500 per worker Firing Cost = $1,000 per worker Inventory Carrying Cost = $20 per unit per quarter If a chase demand strategy is used then the number of workers hired at the start of quarter 2 is

A company is developing a linear programming model for its aggregate production plan.If I_t = units in inventory at the end of period t,P_t = units produced in period t,and D_t = demand in period t,then the company's demand constraint to ensure that demand is met in quarter 3 is

An aggregate operations plan specifies the production quantities for an entire product family or product line.

Adjusting available capacity by hiring and firing workers to match demand is an example of a(n)________ strategy.

The level strategy for adjusting capacity is only appropriate when there is no variation in demand.

The following information relates to a company's aggregate production planning activities: Beginning Workforce = 50 workers Production per Employee = 250 units per quarter Hiring Cost = $1000 per worker Firing Cost = $1,500 per worker Inventory Carrying Cost = $15 per unit per quarter If a chase demand strategy is used then the total hiring and firing cost of the plan is

Sales and operations planning is an aggregate planning process that determines the capacity needed to meet immediate demand.

An operations plan is an input into the sales and operations planning process.