Deck 10: Operations Planning and Scheduling

Question 1

A master production schedule is a schedule that specifies the timing, size, and sequence of production for aggregated product families.

Answer 1

False

Question 2

The employees of Global Bike Incorporated specialized in either their mountain bike or touring bike line, but there were a few workers that were equally adept at assembling either product. For sales and operations planning purposes, the latter group could be:

A) aggregated.
B) reassigned.
C) subcontracted.
D) overtimed.

Answer 2

A

Question 3

The intermediate link between the business plan and the MPS is the:

A) annual plan.
B) production plan.
C) financial plan.
D) workforce schedule.

Answer 3

B

Question 4

The terms "aggregate plan" and "sales and operations plan" are synonymous.

Question 5

A financial assessment of a not-for-profit organization's near future (for one or two years ahead) is a(n):

A) business plan.
B) annual plan.
C) resource plan.
D) financial budget.

Question 6

A sales and operations plan for a service firm is:

A) a staffing plan.
B) a process plan.
C) a marketing plan.
D) a production plan.

Question 7

The planning horizon for a sales and operations plan is typically:

A) 0 - 3 months.
B) 3 - 18 months.
C) 18 - 36 months.
D) 36 - 60 months.

Question 8

Operations planning and scheduling is the process of making sure demand and supply plans are in balance.

Question 9

A sales and operations plan for a manufacturing firm that centers on manufacturing rates and inventory holdings is:

A) a staffing plan.
B) a production plan.
C) a marketing plan.
D) a process plan.

Question 10

Companies perform aggregation along the three dimensions of:

A) products, labor, customers.
B) time, suppliers, services.
C) products / services, labor, time.
D) time, products, customers.

Question 11

Which one of the following statements about sales and operations planning is best?

A) A production plan generally focuses on production rates and inventory holdings, whereas a staffing plan focuses on staffing and other labor-related factors.
B) Supply options are actions that adjust demand patterns.
C) Operations and marketing are the only two functional areas that supply inputs for developing production and staffing plans.
D) A level strategy stabilizes inventory levels by adjusting production rates or staff levels to match demand levels over the planning horizon.

Question 12

A product family is a group of customers, services, or products that have similar demand requirements and common processes, labor, and materials requirements.

Question 13

Which one of the following statements concerning production and staffing plans is best?

A) Aggregation can be performed along three dimensions: product families, labor, and time.
B) A staffing plan is the intermediate link between the business plan and the master production schedule.
C) Production plans are based primarily on information from the master production plan.
D) A master production schedule is a projected statement of income, costs, and profits.

Question 14

A manufacturing firm's sales and operations plan generates both a production plan and a staffing plan.

Question 15

A financial assessment of a for-profit organization's near future (for one or two years ahead) is a(n):

A) business plan.
B) annual plan.
C) resource plan.
D) financial budget.

Question 16

The sales and operations plan typically has a one-year planning horizon.

Question 17

For the student advisement service at a university, business majors and education majors would constitute two different product families.

Question 18

When performing sales and operations planning, companies can aggregate products or services but not members of their workforce.

Question 19

A services firm's sales and operations plan generates both a production plan and a staffing plan.

Question 20

Which one of the following statements about managerial inputs to production and staffing plans is best?

A) Finance provides labor and machine standards.
B) Human resources provide the training capacity and labor-market conditions.
C) Marketing provides the schedule of sales associates.
D) Materials provide the current staffing level.

Question 21

Jake reports to the courier department Monday through Friday and stays from 9 am to 5 pm but many times does not have enough work to keep him busy. Regardless, he is paid for a full eight hours even on those days when he spends more time on social media than delivering supplies. This is an example of undertime.

Question 22

A company is attempting to cope with seasonal demand patterns by managing its demand. Which one of the following will not help achieve this aim?

A) complementary products or services
B) adjusting workforce levels
C) promotional campaigns
D) creative pricing

Question 23

A sales and operations plan is sometimes called a(n) ________.

Question 24

The plans for the components, purchased materials, and workstations are developed in the:

A) master production scheduling process.
B) material requirements planning process.
C) scheduling process.
D) constraint management process.

Question 25

The timing and size of production quantities for each product in the product family is specified by the:

A) master production schedule.
B) material requirements plan.
C) resource plan.
D) scheduling plan.

Question 26

The ________ is the length of time covered by a sales and operations plan.

Question 27

The Acme Company is a cosmetics manufacturing company with corporate offices in Indianapolis. Explain how corporate goals and objectives developed as a business plan in Indianapolis become the tangible plans and steps that are actually implemented in Acme's remote production plants located in Virginia, Ohio and Arizona.

Question 28

What is the impact of the sales and operations plan on the human resources and finance functions of a firm?

Question 29

A group of customers, services, or products that have similar demand requirements and common process, labor, and materials requirements is called a(n) ________.

Question 30

Undertime is the situation that occurs when employees do not have enough productive work for the regular-time workday or workweek.

Question 31

One distinction between manufacturing and services that affects sales and operations plans is that services have difficulty creating inventories in anticipation of uneven demand.

Question 32

Firms that are most likely to use backlogs tend to have a make-to-order strategy.

Question 33

What is a product family?

Question 34

A service firm's sales and operations plan, called a(n) ________, centers on staffing and other labor-related factors.

Question 35

The ________ is a schedule that specifies the timing and size of production quantities for each product in the product family.

Question 36

Some ways to manage demand include building anticipation inventories of goods and hiring or laying off employees.

Question 37

Anticipation inventory is used to absorb uneven rates of demand or supply.

Question 38

How can the workforce be aggregated?

Question 39

The ________ takes the master production schedule and derives plans for components, purchased materials and workstations.

Question 40

The lowest planning level in a sales and operations plan is:

A) resource planning.
B) forecasting.
C) scheduling.
D) sales and operations planning.

Question 41

Once a demand forecast has been entered into a sales and operations plan, it cannot be updated since it would skew the process results.

Question 42

Acme expected demand for rocket-powered roller skates to pick up during Roadrunner Season, so they built hundreds of extra pairs and stored them out of season. The excess production is:

A) buffer stock.
B) throughput.
C) lagniappe.
D) anticipation inventory.

Question 43

________ takes advantage of the tangible nature of manufactured goods to absorb uneven rates of supply and demand.

Question 44

Investment return that is unrealized by stocking raw materials and finished goods can be classified as holding cost.

Question 45

As October came to a close, Geoff updated the sales and operations plan with figures for actual sales, production, inventory, costs, and constraints before turning the production staff's attention to November, a process known as:

A) planning.
B) rolling.
C) closing out.
D) pencil whipping.

Question 46

The university housekeeping and maintenance staff was cut by 50% during late December and early January when students were home breaking things and trashing their parents' houses instead of university property. This type of schedule for housekeeping and maintenance workers is a(n):

A) vacation schedule.
B) part time schedule.
C) undertime schedule.
D) seasonal schedule.

Question 47

What is anticipation inventory and what are the benefits and drawbacks of having it?

Question 48

A company can meet short-term capacity shortages by arranging with ________ outside of their normal workforce to provide necessary services.

Question 49

________ is the situation that occurs when employees work longer than the regular workday or workweek.

Question 50

Which one of the following statements concerning supply options is best?

A) Subcontracting can help overcome short-term capacity shortages by offloading work on other producers.
B) Creating anticipation inventory increases customization and is particularly favored in the service industry.
C) Adjusting workforce levels is preferred when the workforce is skilled and the labor pool is small.
D) Using overtime capacity usually improves worker hourly productivity.

Question 51

A customer is given a due date for their product order with:

A) backlog.
B) reservation.
C) service on demand.
D) appointment.

Question 52

Which one of the following statements concerning sales and operations planning alternatives is best?

A) Building anticipation inventory during the slack season is a demand management option a firm can follow to satisfy seasonal demand patterns.
B) Adjusting workforce levels is an attractive reactive alternative when the cost of training and unemployment compensation is high.
C) Creating anticipation inventory has the advantage of increasing customization.
D) Using overtime is an undesirable option when the overtime wage premium is high and sustained levels of top worker productivity are important.

Question 53

________ is the situation that occurs when employees do not have enough work for the regular workday or workweek.

Question 54

An aggressive advertising campaign was credited with K-Tel's inability to keep K-Fed's latest CD on the shelves. K-Tel continued to accept orders and promised to ship as soon as they could burn new discs. Customers weren't happy, but were willing to wait. This unfortunate situation can be described as a:

A) stockout.
B) backlog.
C) backorder.
D) lost sale.

Question 55

One type of cost considered when preparing a sales and operations plan is inventory holding cost.

Question 56

Pick any manufacturing organization and describe some supply options at their disposal.

Question 57

A level strategy matches demand during the planning horizon by varying either the workforce level or the output rate.

Question 58

The meaning of undertime is:

A) employees work as usual, but they are paid at a lower rate.
B) employees don't have enough productive work for the number of hours that they normally work.
C) employees work more than normal hours, but they are not compensated.
D) the workweek of some employees is permanently reduced.

Question 59

The time that employees work that is longer than the regular workday or workweek for which they receive additional pay is:

A) slack time.
B) premium.
C) overtime.
D) the workweek.

Question 60

Two basic types of decision alternatives are used to arrive at acceptable production or staffing plans: supply options and demand options. If an organization that faces seasonal demand uses a supply option approach, which one of the following actions is it most likely to implement?

A) introduction of complementary products
B) creating a stock of anticipation inventory
C) advertising to generate demand during off-peak periods
D) discounting products in off-peak periods

Question 61

Which of the following is the best example of a physical constraint on the sales and operations plan?

A) inventory storage space
B) level of backorders
C) use of overtime
D) safety stock levels

Question 62

Choose any service and provide examples of how they can use a chase strategy for sales and operations planning.

Question 63

Which one of the following statements about costs of sales and operations plans is best?

A) Overtime wages are typically 50% of regular time wages, exclusive of fringe benefits.
B) The cost of capital is not generally included in the inventory-holding cost.
C) Fringe benefits, which are a part of regular-time costs, do not typically include health insurance and paid vacations.
D) Hiring costs include the costs of advertising jobs, interviews, training programs for new employees, and initial paperwork.

Question 64

The level strategy maintains a constant ________ level or ________ level during the planning horizon.

Question 65

________ is the accumulation of customer orders that have been promised for delivery at some future date.

Question 66

A(n) ________ strategy involves hiring and laying off employees to match the demand forecast over the planning horizon.

Question 67

A(n) ________ strategy involves keeping the workforce constant and varying utilization.

Question 68

Which one of the following statements about sales and operations planning is best?

A) When a firm wants to minimize its inventory investment, it should use a level production-planning strategy.
B) When a firm wants to emphasize stability in its workforce, it should adopt a level production-planning strategy.
C) A make-to-stock production plan that wants to emphasize plant utilization should adopt a chase production strategy.
D) A make-to-stock production plan that wants to minimize changes in production rates should adopt a chase production-planning strategy.

Question 69

Backorders and stockouts are most likely to cause expenses for:

A) advertising costs.
B) lost productivity.
C) cost of capital.
D) lost sales.

Question 70

Which one of the following statements regarding production and staffing plans is best?

A) A producer of greeting cards for all occasions can use a level strategy to good advantage because of the complementary nature of the products and the workforce to produce many varieties of cards.
B) The production plan outlines time-phased production rates, workforce levels, and inventories without considering capacity limitations.
C) A decision to vertically integrate is one of the possible demand options a firm may employ when operating under uneven demand conditions.
D) An advantage of employing demand options is that creative pricing and promotional campaigns increase the contribution margin.

Question 71

Which one of the following actions applies to a level strategy?

A) Hire workers to increase production output to match increases in demand requirements.
B) Build anticipation inventory to meet the variability in demand.
C) Decrease production output to match any decreases in demand requirements.
D) Use promotional campaigns to boost demand.

Question 72

A(n) ________ is a strategy that considers and implements a fuller range of supply options than a pure chase or level strategy.

Question 73

What is the difference between a chase strategy and a level strategy in sales and operations planning?

Question 74

Which of these sales and operations planning levers is associated with interviews, training, and severance pay?

A) backorders and stockouts
B) hiring and layoffs
C) use of overtime
D) holding inventory

Question 75

The sales and operations planning strategy to be used should be consistent with the business environment. Which one of the following pairs of business environment and strategy is consistent?

A) skilled labor in short supply; adjust workforce levels
B) low inventory holding cost; build anticipation inventory
C) ample labor supply; increase backlog for short-term demand surges
D) seasonal requirements and ample, unskilled labor supply; subcontracting

Question 76

Which one of the following conditions favors a level strategy for manufacturing firms?

A) high availability of workers
B) short shelf life of inventory
C) highly automated equipment and a make-to-stock strategy
D) high inventory-holding cost

Question 77

A(n) ________ is an order that cannot be satisfied when demanded and causes the customer to go elsewhere.

Question 78

What is a mixed-strategy approach to sales and operations planning?

Question 79

How is the sales and operations planning process similar to the forecasting process?

Question 80

Pilferage, obsolescence, and insurance costs are all elements of this cost category.

A) staffing
B) backorder and stockout
C) production
D) inventory holding