Deck 20: Sales and Operations Planning

Question 1

3)Sales and operations planning deal with ______ decision-making.

A)strategic
B)tactical
C)operational
D)weekly

Answer 1

B

Question 2

19)Which of the following is FALSE about the functionalities of the supply planning team?

A)evaluation of both past and future capacity utilization
B)development of a procurement plan
C)identification of capacity constraints and alternatives to overcome them
D)resolution of imbalances between expected demand and available capacity in a reactive way

Answer 2

D

Question 3

13)The first step in sales and operations planning is ______.

A)data gathering
B)supply planning
C)demand planning
D)financial planning

Answer 3

A

Question 4

11)Which of the following is a component of the operations plan?

A)backlogs,back orders,and lost sales
B)promotions
C)customer service levels
D)new product introductions

Question 5

16)The final output of demand planning stage is a ______ that has the agreement of all the stakeholders of the S&OP process.

A)single supply plan
B)single demand plan
C)multiple demand plans
D)multiple supply plans

Question 6

14)The goal of ______ is to reach a consensus among the various stakeholders on various demand scenarios,the products that will be sold and the revenues that will be generated for each product line in each month of the planning horizon.

A)demand planning
B)supply planning
C)financial planning
D)top-down planning

Question 7

17)A(n)______ team typically consists of personnel from purchasing,inventory management,production,warehousing,and logistics.

A)operations planning
B)financial planning
C)supply planning
D)demand planning

Question 8

1)______ is the integration of customer-focused marketing plans for new and existing products with supply chain management.

A)Sales and operations planning
B)Demand planning
C)Product planning
D)Supply planning

Question 9

15)The cannibalization of sales of existing products in making demand planning decisions should be considered in which of the following scenarios?

A)new product introduction
B)workforce expansion
C)capacity expansion
D)promotions

Question 10

12)There are ______ stages in the process of developing a sales and operations planning (S&OP)plan.

A)four
B)five
C)six
D)seven

Question 11

6)Which of the following is NOT a benefit of the sales and operations planning process?

A)improving product lifecycle management process
B)increasing costs
C)improving financial performance
D)fostering communication between departments

Question 12

8)Demand forecasts and market intelligence inputs are fed to sales and operations plans by the ______ department.

A)marketing
B)human resources
C)finance
D)operations

Question 13

7)Which of the following is NOT an objective of sales and operations planning?

A)Establish greater accountability for individual plans developed by the various functional groups.
B)Coordinate supply chain partners.
C)Develop a maximum cost strategy for effectively meeting demands.
D)Establish communication among various stakeholders,including finance,marketing,production,and suppliers.

Question 14

18)The objective of ______ is to ensure that there is sufficient manufacturing and distribution capacity to meet the demand forecasts.

A)operations planning
B)financial planning
C)supply planning
D)demand planning

Question 15

2)Sales and operations planning is also known as ______.

A)demand planning
B)sales planning
C)aggregate planning
D)independent planning

Question 16

10)Which of the following is a component of the sales plan (marketing)?

A)workforce levels
B)inventory levels
C)monthly sales estimates by product family
D)monthly regular time and overtime

Question 17

4)Which of the following is NOT a problem caused by a mismatch between supply and demand?

A)excess inventories and obsolete products
B)delays in production and on-time delivery
C)material and product shortages
D)reduced expediting and increased profits

Question 18

5)Which of the following is true about companies that employ an effective sales and operations planning process?

A)They possess the ability to maximize inventory buildup.
B)They experience material and product shortages.
C)They possess the ability to manage products and promotional planning.
D)They experience a loss of customers and reduced profits.

Question 19

20)ROA in financial planning stands for ______.

A)return on assets
B)return on audit
C)record of assets
D)record of administration

Question 20

9)An input to sales and operations planning by the operations department includes ______

A)new product information
B)demand forecasts
C)workforce availability
D)capacity availability

Question 21

21)The output of the financial planning stage serves as an input to ______.

A)revenue planning
B)the pre-S&OP meeting
C)an executive S&OP meeting
D)top-down planning

Question 22

27)Which planning approach is used when management calculates the resource requirement for each individual set of products or services and then combines to get an overall picture of resource requirement?

A)bottom-up
B)top-down
C)aggregate
D)independent

Question 23

23)______ planning approaches can be used for developing a sales and operations plan.

A)Three
B)Two
C)Four
D)Five

Question 24

30)Advertising and promotions are options to influence ______.

A)demand
B)supply
C)capacity
D)workforce

Question 25

29)Which planning approach is appropriate for companies that produce a combination of products and services that require similar resources?

A)bottom-up
B)top-down
C)aggregate
D)independent

Question 26

28)Which planning approach is appropriate for companies whose mix of products and service offerings change from period to period?

A)bottom-up
B)top-down
C)aggregate
D)independent

Question 27

38)Which of the following strategies is appropriate for manufacturing organizations that have stable market demand or production levels?

A)level strategy
B)product strategy
C)chase strategy
D)mixed strategy

Question 28

24)Which of the following is one of the approaches used for developing a sales and operations plan?

A)pre-S&OP planning
B)executive S&OP planning
C)bottom-up planning
D)expected revenue planning

Question 29

22)The final output of the ______ is a recommendation to senior management on a sales and operations plan that include both the trade-offs and the financial and nonfinancial implications of the plan.

A)revenue planning
B)pre-S&OP meeting
C)executive S&OP meeting
D)top-down planning

Question 30

37)The aim of the ______ strategy is to maintain a constant production rate.

A)level strategy
B)product strategy
C)chase strategy
D)mixed strategy

Question 31

35)Companies that produce lawn mowers to meet demand during the summer months can also manufacture snow blowers for the winter.This approach is an example of ______.

A)developing counter-seasonal products and services
B)matching supply and demand with backorders
C)matching price with demand
D)advertising and promotions

Question 32

36)Which of the following is NOT one of the sales and operations planning strategies?

A)level strategy
B)product strategy
C)chase strategy
D)mixed strategy

Question 33

25)Which of the following is based on the assumption that management can create accurate tactical plans based on the overall aggregate forecast and then divide the resources across the individual products and services during the detailed operational planning and control activities?

A)pre-S&OP planning
B)executive S&OP planning
C)bottom-up planning
D)expected revenue planning

Question 34

34)A ______ is a customer order that a company accepts in one period but promises to deliver at a later point in time.

A)delivery order
B)return order
C)backorder
D)buyback order

Question 35

39)Consider that a company's aggregate demand for a product over a 5-month period is 30,000,and there are a total of 125 working days in that period.Under level production strategy,the company will produce ______ units per day.

A)200
B)250
C)220
D)240

Question 36

26)______ deals with evaluating the financial feasibility of the demand and supply plans developed in the previous stages of S&OP planning in terms of ROA,profits,revenue,and working capital investments.

A)ROA planning
B)Investments planning
C)Financial planning
D)Revenue planning

Question 37

40)Which of the following is a disadvantage of the level strategy of sales and operations planning?

A)lower turnover
B)workers that tend to be skilled and experienced
C)higher cost of inventories over periods of slack
D)lower absenteeism of its employees

Question 38

31)In the sales and operations planning process,which of the following is an option for influencing supply?

A)price
B)backorders and reservation systems
C)advertising and promotions
D)use of subcontracting

Question 39

33)In the sales and operations planning process,the ______ adopt a reactive approach to match supply with demand.

A)options to influence demand
B)options to influence revenue
C)options to influence supply
D)options to influence costs

Question 40

32)In the sales and operations planning process,the options to influence demand adopt a ______ approach to match supply with demand.

A)reactive
B)proactive
C)passive
D)responsive

Question 41

55)Which of the following assumptions is FALSE regarding the application of the trial-and-error approach to developing a sales and operations plan?

A)Unit costs are independent of the quantity produced.
B)Cost is a nonlinear function of unit cost and the number of units.
C)When allowed,backlogs are assumed to exist for the entire period.
D)Production occurs at a uniform rate throughout each period.

Question 42

49)Which of the following is a formal decision model that uses techniques of regression analysis of past production decisions and is also based on managerial performance and experience?

A)linear decision rule
B)linear programming
C)simulation
D)management coefficients model

Question 43

52)The assumption of linearity is restrictive and not representative of many real-world aggregate planning situations.This statement is a major drawback of ______.

A)linear programming
B)linear decision rule
C)transportation model
D)integer programming

Question 44

48)Which of the following is an optimization approach that can be used to create aggregate plans,where the total production cost is represented by a single quadratic cost function,which is minimized using calculus?

A)linear decision rule
B)linear programming
C)simulation
D)management coefficient model

Question 45

44)Which of the following is a disadvantage of the chase strategy of sales and operations planning?

A)minimization of inventory holding costs
B)flexibility in the use of capacity
C)reduced obsolescence and shrinkage
D)higher costs of hiring,training,and laying-off employees

Question 46

53)Which of the following methods yields two linear equations,one to determine the optimum production plan for each period and the other to determine the optimum workforce plan for each period?

A)linear decision rule
B)integer programming
C)management coefficient model
D)linear programming

Question 47

42)A hybrid strategy that combines the advantages of level and chase strategies,enabling firms to select options that influence both the demand and supply of their products,is a ______.

A)product strategy
B)mixed strategy
C)dual strategy
D)collaborative strategy

Question 48

54)Which of the following methods does not guarantee an optimum sales and operations plan?

A)linear decision rule
B)management coefficient model
C)trial-and-error method
D)optimization model

Question 49

43)Companies that use ______ strategy employ the options of hiring and laying-off workers,overtime work,subcontracting,and so on to meet demand.

A)dual strategy
B)product strategy
C)chase strategy
D)mixed strategy

Question 50

47)Which of the following is an optimization technique in which the objective and the constraint functions are linear and the variables are continuous?

A)linear decision rule
B)linear programming
C)simulation
D)management coefficient model

Question 51

56)Consider the estimated aggregate demand for a company's ski product line for the upcoming year in the following table.Calculate the planned monthly production level using level production strategy.

A)4,000
B)5,000
C)4,500
D)5,500

Question 52

45)A typical restaurant employs a ______ strategy by preparing meals only after the customer places an order,thereby matching actual production with customer demand.

A)dual strategy
B)product strategy
C)chase strategy
D)mixed strategy

Question 53

41)A demand matching strategy in which production is geared toward producing whatever amount of goods are needed to meet demand is a ______.

A)level strategy
B)product strategy
C)chase strategy
D)mixed strategy

Question 54

58)Ending inventory at the end of each period is given by ______.

A)Ending inventory = Beginning inventory of each period + Production in that period
B)Ending inventory = Beginning inventory of each period + Production in that period - Forecasted demand in that period
C)Ending inventory = Beginning inventory of each period - Production in that period
D)Ending inventory = Beginning inventory of each period - Production in that period + Forecasted demand in that period

Question 55

59)Average inventory level at the end of each period is given by ______.

A)Average inventory = (Beginning inventory + Ending inventory)/ 2
B)Average inventory = (Beginning inventory + Ending inventory)* 2
C)Average inventory = (Beginning inventory - Ending inventory)/ 2
D)Average inventory = (Beginning inventory - Ending inventory)* 2

Question 56

51)Which of the following is a special case of linear programming that can be used to obtain optimum aggregate plans that can enable planners to balance capacity and demand at the lowest possible cost?

A)linear decision rule
B)transportation model
C)simulations
D)management coefficient model

Question 57

50)Which of the following models use search decision rules to find the appropriate combination of production and workforce levels that will minimize costs?

A)optimization models
B)transportation models
C)simulations
D)management coefficients models

Question 58

60)Consider the estimated aggregate demand for a company's ski product line for the upcoming year in the following table.Calculate the ending inventory level for January under a level production strategy.Assume the beginning inventory for January is 8,000 units.

A)3,000
B)5,000
C)4,000
D)5,500

Question 59

46)Which of the following techniques attempts to optimize a company's objective,such as maximizing profits or minimizing costs,given constraints such as scarce productive resources?

A)optimization model
B)transportation model
C)simulations
D)management coefficient model

Question 60

57)Consider the estimated aggregate demand for a company's ski product line for the upcoming year in the following table.Calculate the number of workers required to meet the production level using level production strategy.The average number of hours required to produce a pair of skis is 8 hours; the number of worker hours per months is 160.

A)180
B)100
C)240
D)200

Question 61

68)Consider the estimated aggregate demand for a company's ski product line for the upcoming year in the following table.Calculate the total costs for the month of March using the level production strategy.Assume the regular time production cost as $200/pair of skis,and the average monthly inventory holding cost is $20/pair of skis per month.

A)$810,000
B)$900,000
C)$880,000
D)$850,000

Question 62

70)Which of the following is FALSE about developing a global sales and operations plan?

A)a proliferation of product lines caused by global customers demanding greater variety
B)a lower product demand volatility caused by swings in demand
C)a higher expectation of quality from global customers
D)a greater need to reduce high inventory levels caused by poor forecasts

Question 63

61)Consider the estimated aggregate demand for a company's ski product line for the upcoming year in the following table.Calculate the average inventory for the month of February under a level production strategy.Assume the beginning inventory for January is 8,000 units.

A)3,000
B)2,200
C)1,800
D)2,500

Question 64

72)The ______ department provides global planners with information on capital expenditure planning and budgeting activities.

A)finance
B)marketing
C)information technology
D)suppliers

Question 65

65)Consider the estimated aggregate demand for a company's ski product line for the upcoming year in the following table.Calculate the additional number of workers required to meet the production level for the month of January using the chase production strategy.The average number of hours required to produce a pair of skis is 8 hours,and the number of worker hours per month is 160.The current workforce is 100.The beginning inventory for January is zero.

A)100
B)200
C)300
D)400

Question 66

67)Consider the estimated aggregate demand for a company's ski product line for the upcoming year in the following table.Calculate the firing cost for month of February using the chase production strategy.The average number of hours required to produce a pair of skis is 8 hours,and the number of worker hours per month is 160.The current workforce is 100.The firing cost per worker is $200.

A)$12,000
B)$15,000
C)$20,000
D)$10,000

Question 67

77)An empty airline seat cannot be held as inventory and sold at a later time.This is an illustration of which of the following statements?

A)Services cannot be inventoried.
B)Services have low demand volatility.
C)Services require skilled labor.
D)Capacity required for services is hard to predict.

Question 68

74)Which of the following is NOT an outcome of an effective global sales and operations plan?

A)reduced inventory
B)improved customer relationship
C)increased expedited costs
D)increased forecast accuracy

Question 69

66)Consider the estimated aggregate demand for a company's ski product line for the upcoming year in the following table.Calculate the hiring cost for month of January using the chase production strategy.The average number of hours required to produce a pair of skis is 8 hours,and the number of worker hours per month is 160.The current workforce is 100.The beginning inventory for January is zero.The hiring cost per worker is $400.

A)$120,000
B)$150,000
C)$200,000
D)$100,000

Question 70

71)Which of the following statements is FALSE about a global sales and operations plan?

A)It must be able to reconcile product allocations.
B)It must include formal communication channels.
C)It must be managed separately through the respective functions (manufacturing,sales,finance).
D)It must be able to balance differing stakeholder needs and goals.

Question 71

64)Consider the estimated aggregate demand for a company's ski product line for the upcoming year in the following table.Calculate the inventory holding costs for the month of March using the level production strategy.Assume the regular time production cost as $200/pair of skis,the average monthly inventory holding cost as $20/pair of skis per month,and the beginning inventory for January is 8,000 units.

A)$5,000
B)$7,500
C)$10,000
D)$20,000

Question 72

75)Companies with a well-integrated S&OP typically have ______ days of inventory.

A)25 to 30 days
B)6 months
C)40 to 50 days
D)70 to 90 days

Question 73

81)A strategy in which employees of a service company are hired as contractors to work for a certain number of hours per year for fixed sum of money is called ______.

A)subcontracting
B)outsourcing
C)annualized hours strategy
D)monthly hours strategy

Question 74

62)Regular time production cost is given by the formula ______.

A)Regular time production cost = Regular time production x Regular time cost/unit
B)Regular time production cost = Regular time production / Regular time cost/unit
C)Regular time production cost = Regular time cost/unit x Regular time production
D)Regular time production cost = Regular time cost/unit / Regular time production

Question 75

73)Which of the following does NOT have an impact on a company's choice of global sales and operations planning model?

A)strategic direction
B)volume of demand
C)nature of its products
D)buying power of customer

Question 76

69)Which of the following is FALSE about linking the sales and operations planning process to the operations of the company's supply chain partners?

A)Coordinating the sales and operations planning process across the supply chain can improve the overall supply chain performance.
B)Involving supply chain partners in the sales and operations planning process increases the level of uncertainty in the supply chain.
C)Involving supply chain partners can pave the way for a collaborative planning,forecasting,and replenishment (CPFR)process.
D)Linking the company's sales and operations planning process to the rest of the supply chain improves overall supply chain agility.

Question 77

78)The number of nurses and doctors that a hospital may need on any given day depends not only on the number of patients but also the types of patient care required.This is an illustration of which of the following statements?

A)Services cannot be inventoried.
B)Services have low demand volatility.
C)Services require skilled labor.
D)Capacity required for services is hard to predict.

Question 78

79)The focus of sales and operations planning in the service sector is primarily on ______,in contrast to ______ in manufacturing sector.

A)production planning,workforce scheduling
B)demand planning,supply planning
C)workforce scheduling,production planning
D)supply planning,production planning

Question 79

63)Consider the estimated aggregate demand for a company's ski product line for the upcoming year in the following table.Calculate the regular time production cost for January using the level production strategy.Assume the regular time production cost as $200/pair of skis,the average monthly inventory holding cost is $20/pair of skis per month,and the beginning inventory for January is 8,000 units.

A)$400,000
B)$800,000
C)$120,000
D)$100,000

Question 80

80)The mixed strategies used in sales and operations planning for services can be broadly classified into ______ categories.

A)three
B)four
C)five
D)two