Deck 15: Operations Planning and Scheduling

Question 1

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

Answer 1

True

Question 2

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

Answer 2

True

Question 3

The operations planning and scheduling process moves from the short term scheduling level to the aggregate level.

Answer 3

False

Question 4

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

Question 5

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

Question 6

The best mix of full- and part-time employees is a sales and operations planning decision.

Question 7

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

Question 8

Revenue management is a way to manage demand by varying price at the right time for various customer segments to maximize revenues generated from existing supply capacity.

Question 9

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

Question 10

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

Question 11

By their nature,firms engaged in customer services cannot do anything to manage customer demand.

Question 12

One objective of a sales and operations plan is to minimize changes in production rates.

Question 13

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

Question 14

Scheduling is the day-to-day allocation of resources to accomplish specific tasks.

Question 15

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

Question 16

Complementary products are actions that attempt to modify demand and,consequently,resource requirements.

Question 17

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

Question 18

The fast food restaurant had a happy hour drink special,96 ounces of your favorite beverage for the price of only 64 ounces,from 2 pm to 4 pm.This is an example of promotional pricing used to manage demand.

Question 19

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

Question 20

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 21

A fixed schedule gives each employee the next employee's schedule the following week.

Question 22

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

Question 23

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 24

A rotating schedule calls for each employee to work the same days and hours each week.

Question 25

A sales and operations plan for a service firm is:

A)a staffing plan.
B)a process plan.
C)an operations plan.
D)a production plan.

Question 26

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 27

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

Question 28

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)an operations plan.
D)a process plan.

Question 29

Scheduling involves generating a work schedule for employees or sequences of jobs or customers at workstations.

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

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 32

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 33

The spreadsheet approach to sales and operations planning for a services provider includes inventory costs as one factor to be considered.

Question 34

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 35

Flow time is only the time a job spends being processed,and excludes any time waiting to be processed,equipment set up time and time spent moving between operations.

Question 36

The Gantt chart can be used as a tool for sequencing work on machines and monitoring its progress.

Question 37

Which of the following is NOT a typical product family?

A)a group of customers
B)a group of products
C)a group of services
D)a group of suppliers

Question 38

Advanced planning and scheduling systems (APS)seek to optimize resources across the supply chain and align daily operations with strategic goals.

Question 39

Jobs processed using the first-come-first-served priority rule still permits them to be expedited.

Question 40

Earliest due date (EDD)is a priority-sequencing rule that states the job requiring the shortest processing time is the next job to be processed.

Question 41

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 42

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 43

An example of revenue management is:

A)two-for-one pricing for bath towels.
B)scheduling specific times for dental appointments.
C)two passengers,sitting side-by-side in an airplane,charged different prices depending on when they made their reservations.
D)accumulating backorders to smooth demand.

Question 44

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

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

Question 45

Which of these is an example of complementary products?

A)A company that makes watches also makes watch bands.
B)A company that produces sweaters also produces swimsuits.
C)A firm that produces left shoes produces right shoes as well.
D)A firm that makes peanut butter also makes jelly.

Question 46

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 47

The process of varying pricing at the right time for different customer segments to maximize revenue generated from existing supply capacity is called:

A)supply planning.
B)backlogging.
C)backordering.
D)revenue management.

Question 48

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 49

Based on the sales and operations plan for a service provider,the next planning level is:

A)scheduling.
B)annual planning.
C)constraint management.
D)resource planning.

Question 50

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 51

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

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

Question 52

Which one of the following statements is best?

A)Demand options adjust demand patterns,whereas supply options change in response to changes in demand.
B)Overtime and undertime are two ways to change the workforce level rather than its utilization.
C)Subcontracting during the peak season is called an aggressive strategy because it requires a competitive orientation toward suppliers.
D)Due to the almost limitless number of possible sales and operations plans,it is virtually impossible to select a desirable plan without using an optimization procedure such as linear programming.

Question 53

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

A)Creative pricing is an example of a demand option sales and operations planning strategy.
B)Chase strategies are always the lowest cost alternative but are often not chosen because of other factors.
C)Vacation schedules are rarely used as a supply option because the planners are at the mercy of the employees' choices for free time.
D)A mixed strategy is one that "mixes" the demand of complementary products to level the aggregate demand rate.

Question 54

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 55

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 56

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 months - 60 months

Question 57

Which one of the following is a demand option for sales and operations planning?

A)Use seasonal inventories to buffer the manufacturing process from variations in customer demand.
B)Offer complementary products or services with contra cyclical demand requirements.
C)Use overtime and undertime to change workforce levels.
D)Use subcontracting to overcome short-term capacity shortages.

Question 58

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

A)Supply options are actions that adjust demand patterns.
B)All functional areas should supply inputs for developing production and staffing plans.
C)The production plan specifies the timing and size of production quantities for each product in the product families.
D)The staffing plan is to service organizations what competitive priorities are to manufacturing organizations.

Question 59

Which of these is an example of complementary services?

A)A company that performs lawn care in the summer hangs holiday decorations in November and December.
B)A company that offers haircuts also employs a bootblack to shine customers' shoes while they receive their haircut.
C)A hospital offers emergency services and has a day care for employees' children.
D)The fire department trains all employees in CPR in case a fire victim has a heart attack.

Question 60

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

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

Question 61

Table 15.1
Bart Incorporated manufactures rotary air fans and uses a production-planning horizon of one-half year.It allows for regular time,part time,overtime,and subcontracting production to meet the demand but no more than 12 units may be made by each of these methods.Both anticipation inventory and backorders are allowed.The beginning (or current)inventory is 20 units.Their first attempt at a sales and operations plan has resulted in the following.

Use the information in Table 15.1.If the firm is committed to the regular production and overtime production as shown,what level of anticipation inventory would be needed at the start of the first month to result in an ending inventory of zero after month 6?

A)9 or fewer units
B)10 units to 17 units
C)18 units to 25 units
D)25 units to 32 units

Question 62

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 63

Which one of the following conditions can make a level strategy the most attractive?

A)The cost of changing the workforce levels is low.
B)Products complementary to the existing products can be produced easily with the given facilities.
C)The shelf life of the goods being produced is limited.
D)Inventory-holding costs are high.

Question 64

Table 15.1
Bart Incorporated manufactures rotary air fans and uses a production-planning horizon of one-half year.It allows for regular time,part time,overtime,and subcontracting production to meet the demand but no more than 12 units may be made by each of these methods.Both anticipation inventory and backorders are allowed.The beginning (or current)inventory is 20 units.Their first attempt at a sales and operations plan has resulted in the following.

Use the information in Table 15.1.According to the production plan,what is the unused overtime capacity in the fourth period?

A)0
B)4
C)9
D)12

Question 65

Table 15.1
Bart Incorporated manufactures rotary air fans and uses a production-planning horizon of one-half year.It allows for regular time,part time,overtime,and subcontracting production to meet the demand but no more than 12 units may be made by each of these methods.Both anticipation inventory and backorders are allowed.The beginning (or current)inventory is 20 units.Their first attempt at a sales and operations plan has resulted in the following.

Use the information in Table 15.1.Which of these changes would result in the greatest improvement (in terms of total cost)for the production plan?

A)Increase anticipation inventory to 30 units at the start of the first month.
B)Reduce anticipation inventory to 18 units at the start of the first month.
C)Increase anticipation inventory to 40 units at the start of the first month.
D)Reduce anticipation inventory to 10 units at the start of the first month.

Question 66

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 67

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 68

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 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 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 71

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 72

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 73

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 74

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 75

Table 15.1
Bart Incorporated manufactures rotary air fans and uses a production-planning horizon of one-half year.It allows for regular time,part time,overtime,and subcontracting production to meet the demand but no more than 12 units may be made by each of these methods.Both anticipation inventory and backorders are allowed.The beginning (or current)inventory is 20 units.Their first attempt at a sales and operations plan has resulted in the following.

Use the information in Table 15.1.According to the production plan,what will be the total ending inventory in the second month after the second month's demand is satisfied?

A)-21 units
B)0 units
C)21 units
D)This cannot be determined from the information provided.

Question 76

Table 15.1
Bart Incorporated manufactures rotary air fans and uses a production-planning horizon of one-half year.It allows for regular time,part time,overtime,and subcontracting production to meet the demand but no more than 12 units may be made by each of these methods.Both anticipation inventory and backorders are allowed.The beginning (or current)inventory is 20 units.Their first attempt at a sales and operations plan has resulted in the following.

Use the information in Table 15.1.Which of these changes would result in the greatest improvement (in terms of total cost)for the production plan?

A)Produce an additional 12 units using overtime in the first month.
B)Produce an additional 12 units using subcontracting in the second month.
C)Produce an additional 12 units using overtime in the third month.
D)Produce an additional 12 units using subcontracting in the fourth month.

Question 77

Which of the 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 78

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 79

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 80

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.