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Chapter 14 Sales and Operations Planning Process

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Sales and operations planning is an aggregate planning process that determines the capacity needed to meet immediate demand.
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Ans: False
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Implementing a companywide game plan for allocating resources addresses the long-standing battle between operations and finance.
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Ans: False
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An economic strategy for adjusting demand can include adjusting capacity or managing demand.
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Ans: True
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An aggregate operations plan specifies the production quantities for an entire product family or product line.
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Ans: True
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One objective of sales and operations planning is to develop a companywide game plan to satisfy production.
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f
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An operations plan is an input into the sales and operations planning process.
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f
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Financial constraints are one of the major inputs of the sales and operations planning process.
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t
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Overtime and undertime are common strategies for adjusting demand.
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f
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The level strategy for adjusting capacity is only appropriate when there is no variation in demand.
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Ans: False
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A chase strategy involves hiring and firing workers so that production trails demand.
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f
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Inventory holding costs are an important consideration for the level production strategy.
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t
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When demand fluctuations are extreme using overtime and undertime is a feasible strategy for adjusting capacity.
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f
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Subcontracting is a feasible alternative for adjusting capacity provided the supplier can reliably meet quality and time requirements.
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t
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A chase demand strategy is one of several alternatives available for managing demand.
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f
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One of several strategies for managing demand is to shift it into other time periods using incentives, sales promotions, and advertising.
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t
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A mixed strategy for adjusting capacity is simpler and easier to implement than any pure strategy.
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f
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Most companies use mixed strategies for managing demand.
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t
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The transportation method is used for aggregate planning when the strategy for adjusting capacity is hiring and firing workers.
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f
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Aggregate planning involves the process of determining the timing and quantity of production for an individual item over an intermediate time frame.
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f
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With a pure strategy for aggregate planning only one capacity variable is changed.
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t
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Most companies use mixed strategies for production planning.
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t
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Disaggregation is the process of breaking a sales and operations plan into more detailed plans.
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t
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Sharing information and synchronizing production across the supply chain is known as disaggregation.
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f
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Revenue management seeks to maximize profit from time-sensitive products and services.
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t
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All of the following are inputs to the aggregate production planning process except
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c. sales plans
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Which of the following is an output of sales and operations planning?
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c. operations plans
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Sales and operations planning is an aggregate planning process for a(n)______________ time horizon.
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b. intermediate
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The term aggregate planning reflects the fact that plans are developed for ___________, rather than _____________.
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a. product families, individual products
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Strategies for proactive demand management would not include
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using subcontracting to meet unexpected high demand levels.
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Which of the following is an objective to sales and operations planning?
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Develop an economic strategy for meeting demand.
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The most effective aggregate planning strategy depends on
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d. All of these answer choices are correct.
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Adjusting available capacity by hiring and firing workers to match demand is an example of a(n) ________ strategy.
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b. chase demand
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The primary cost associated with the level production strategy is the cost of
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a. holding inventory.
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Problems associated with using a part-time workers strategy for adjusting capacity include all of the following except
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d. high retirement costs.
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Which of the following is not a strategy for adjusting capacity?
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d. product substitution
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Which of the following is not a strategy for managing demand?
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c. Redirecting demand to a competitor.
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Shifting demand into other time periods can be accomplished through
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d. All of these answer choices are correct.
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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
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b. 20
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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 chase demand strategy is used then the number of workers hired at the start of quarter 4 is
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c. 75
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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 chase demand strategy is used the number of workers fired at the start of quarter 3 is
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b. 40
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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 chase demand strategy is used the total hiring and firing costs for the production plan is
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c. $202,500.00
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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
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A. 42500
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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 workers required each quarter is
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c. 85
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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 in inventory at the end of quarter 3 is
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d. 20,000