Question 1

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

Accepted Answer

The answer of A hotel using yield management would ________...

Question 2

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?
 $$\begin{array} { | l | c | l | l | l | l | } 
\hline { \text { Month } } & \text { Forecast } & \text { Regular } & \text { Overtime } & \text { Subcontracting } & \begin{array} { c } 
\text { Ending } \
\text { Inventory }
\end{array} \
\hline \text { January } & 250 & & & & \
\hline \text { February } & 400 & & & & \
\hline \text { March } & 500 & & & & \
\hline \text { April } & 350 & & & & \
\hline
\end{array}$$

Accepted Answer

The answer of Create a minimum cost chase plan for...

Question 3

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

Accepted Answer

A) a mixed production approach. 
B) a level production approach. 
C) a chase production approach. 
D) a bottom-up planning approach.

Question 4

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. $$\begin{array} { | l | c | c | c | c | } 
\hline { \text { Month } } & \text { Forecast } & \begin{array} { c } 
\text { Regular } \
\text { Production }
\end{array} & \begin{array} { c } 
\text { Overtime } \
\text { Production }
\end{array} & \begin{array} { c } 
\text { Ending } \
\text { Inventory }
\end{array} \
\hline \text { Tanuary } & 250 & 250 & 0 & 0 \
\hline \text { February } & 200 & 300 & 0 & \
\hline \text { March } & 300 & 325 & 25 & \
\hline \text { April } & 500 & 400 & 25 & \
\hline
\end{array}$$

Accepted Answer

A) 150 units 
B) 125 units 
C) 100 units 
D) 75 units

Question 5

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.

Accepted Answer

The answer of An organization with twenty people developing sales...

Question 6

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.
 $$\begin{array} { | l | c | } 
\hline { \text { Month } } & \text { Forecast } \
\hline \text { Tanuary } & 250 \
\hline \text { February } & 200 \
\hline \text { March } & 300 \
\hline \text { April } & 400 \
\hline \text { May } & 500 \
\hline
\end{array}$$

Accepted Answer

The answer of It costs $12 to make a single...

Question 7

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

Accepted Answer

The answer of A sales and operations plan that varies...

Question 8

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.
 $$\begin{array} { | l | c | } 
\hline  { \text { Month } } & \text { Forecast } \
\hline \text { August } & 250 \
\hline \text { September } & 200 \
\hline \text { October } & 300 \
\hline \text { November } & 400 \
\hline \text { December } & 500 \
\hline
\end{array}$$

Accepted Answer

The answer of It costs $20 to make a single...

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

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.

Accepted Answer

The answer of Distinguish between strategic, tactical and detailed planning...

Question 11

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? $$\begin{array} { | l | c | c | } 
\hline{ \text { Month } } & \text { Forecast } & \text { Regular Production } \
\hline \text { Tanuary } & 250 & 250 \
\hline \text { February } & 200 & 200 \
\hline \text { March } & 300 & 300 \
\hline \text { April } & 400 & 400 \
\hline
\end{array}$$

Accepted Answer

A) $11,250 
B) $4,500 
C) $8,400 
D) $3,900

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

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?

Accepted Answer

A) A constraint should limit overtime to less than 8 hours per week. 
B) The objective function should maximize the amount of rocket widgets produced. 
C) The objective function must be to minimize the overtime. 
D) A constraint should limit the cost to run the machine to less than or equal to $20 per hour.

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) build the managerial support and infrastructure needed to make S&OP a success. 
B) adopt S&OP as part of the organization's normal planning process. 
C) elevate the decision-making authority of the sales and marketing team. 
D) decide whether to commoditize the services offered with their products.

Question 16

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? $$\begin{array} { | l | c | c | } 
\hline{ \text { Month } } & \text { Forecast } & \text { Regular Production } \
\hline \text { Tanuary } & 250 & 250 \
\hline \text { February } & 200 & 200 \
\hline \text { March } & 300 & 300 \
\hline \text { April } & 400 & 400 \
\hline
\end{array}$$

Accepted Answer

A) $11,500 
B) $7,500 
C) $4,500 
D) $3,000

Question 17

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?

Accepted Answer

A) The objective function should limit overtime to less than 8 hours per week. 
B) The objective function should maximize the amount of rocket widgets produced. 
C) The objective function should be to minimize costs. 
D) None of these statements will help plan production using optimization modeling.

Question 18

Tactical capacity resources include:

Accepted Answer

A) customer demand. 
B) the size of the workforce. 
C) major process choice decisions. 
D) construction of new plants.

Question 19

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

Accepted Answer

The answer of The purpose of aggregate planning is to...

Question 20

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? $$\begin{array} { | l | c | } 
\hline  { \text { Month } } & \text { Forecast } \
\hline \text { Tanuary } & 525 \
\hline \text { February } & 600 \
\hline \text { March } & 650 \
\hline \text { April } & 750 \
\hline  { \text { May } } & 875 \
\hline
\end{array}$$

Accepted Answer

A) 580 units per month 
B) 595 units per month 
C) 610 units per month 
D) 640 units per month

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 .

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

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

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.

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

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:

Tactical capacity resources include:

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