Question 1

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.

Accepted Answer

The assumption that cost is a nonlinear function of unit cost and the number of units is false. In reality, the cost may vary nonlinearly based on the quantity produced. The other assumptions, such as unit costs being independent of quantity produced, production occurring at a uniform rate, and backlogs existing for the entire period, are commonly used in the trial-and-error approach.

Question 2

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

Accepted Answer

The management coefficients model is a formal decision model that uses regression analysis of past production decisions and is based on managerial performance and experience. Linear decision rule is a simpler decision-making tool that uses a set of linear equations to make decisions, while linear programming and simulation are more complex decision models.

Question 3

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

Accepted Answer

Linear programming assumes linearity in the objective function and constraints, which makes it restrictive and not suitable for many real-world aggregate planning situations. Other models like nonlinear programming or stochastic programming may be better suited for such situations.

Question 4

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

Accepted Answer

The linear decision rule is an optimization approach that uses a quadratic cost function to determine the optimal production levels by minimizing the total production cost through calculus.

Question 5

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

Accepted Answer

The chase strategy requires hiring and laying off employees as demand fluctuates, which increases labor costs and reduces employee morale. Therefore, option D is the correct choice as it specifies the disadvantage of using the chase strategy of sales and operations planning. Option A indicates the advantage of the chase strategy, while options B and C are irrelevant to the question.

Question 6

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

Accepted Answer

The linear decision rule method is designed to create two linear equations: one for determining the optimal production plan and another for determining the optimal workforce plan for each period.

Question 7

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

Accepted Answer

A mixed strategy combines the benefits of both level and chase strategies, providing a more flexible approach for businesses. It allows for managing both supply and demand by adjusting inventory levels and production capacity, depending on the market conditions. This strategy helps businesses meet changing customer demands while ensuring optimal utilization of resources. Product strategy pertains more to the features and qualities of a product, while dual strategy and collaborative strategy do not relate to inventory and production management.

Question 8

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

Accepted Answer

The trial-and-error method involves testing different combinations of variables to find the best outcome, but it does not guarantee an optimal solution. It may take a lot of time and resources to find the best solution through trial-and-error, and there is no assurance that the outcome will be optimal. The other methods listed (linear decision rule, management coefficient model, optimization model) are more systematic and mathematical in their approach, and can provide optimal solutions within a reasonable amount of time.

Question 9

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

Accepted Answer

The given description is defining the chase strategy, which involves adjusting the workforce and production levels to match the demand for the product or service. The other strategies mentioned (dual, product, mixed) do not explicitly involve these options for meeting demand.

Question 10

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

Accepted Answer

Linear programming is an optimization technique that involves linear objective and constraint functions, and continuous variables. It is used to find the optimal solution to a problem where resources are limited and trade-offs must be made.

Question 11

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.
 $$\begin{array} { | c | c | c | c | } 
\hline \text { Month } & \begin{array} { c } 
\text { Demand } \
\text { (in pairs } \
\text { of unit) }
\end{array} & \text { Month } & \begin{array} { c } 
\text { Demand } \
\text { (in pairs } \
\text { of units) }
\end{array} \
\hline \text { Jan } & 8,000 & \text { J uly } & 1,000 \
\hline \text { Feb } & 7,000 & \text { Aug } & 1,300 \
\hline \text { Mar } & 6,000 & \text { Sept } & 1,000 \
\hline \text { Apr } & 4,000 & \text { Oct } & 3,000 \
\hline \text { May } & 2,000 & \text { Nov } & 5,700 \
\hline \text { J une } & 2,000 & \text { Dec } & 7,000 \
\hline
\end{array}$$
A)4,000
B)5,000
C)4,500
D)5,500

Accepted Answer

Level production strategy means producing the same amount of units each month. The total demand for the year is 48,000 pairs of units. So, the planned monthly production level should be 48,000/12 = 4,000 pairs of units.

Question 12

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

Accepted Answer

The described strategy is known as the chase strategy, where the production is adjusted to match the fluctuating customer demand. This is in contrast to a product strategy where meals are prepared in advance and kept ready, or a mixed strategy which combines elements of both approaches. The given information does not suggest a dual strategy.

Question 13

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

Accepted Answer

A chase strategy is a demand matching strategy where production levels are adjusted to meet the current demand. This means that the production level is variable and is based on the current demand for the product. The advantage of the chase strategy is that it can help to minimize inventory costs and reduce the risk of overproduction.

Question 14

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

Accepted Answer

Ending inventory is calculated by adding the beginning inventory and production for the period, then subtracting the forecasted demand for that period. This accounts for the goods that were available at the start, produced, and then reduced by what was expected to be sold.

Question 15

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

Accepted Answer

The average inventory level at the end of each period is calculated by adding the beginning and ending inventory levels and dividing by 2. This gives us the average inventory level for the entire period. Using the other options would result in incorrect calculations.

Question 16

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

Accepted Answer

The transportation model is a special case of linear programming that can be used to obtain optimum aggregate plans for balancing capacity and demand at the lowest cost. It is commonly used in supply chain and logistics management to optimize transportation costs and allocate resources efficiently. Linear decision rules, simulations, and management coefficient models are not specifically designed for aggregate planning and may not provide optimal solutions.

Question 17

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

Accepted Answer

The answer of Which of the following models use search...

Question 18

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. $$\begin{array} { | c | c | c | c | } 
\hline \text { Month } & \begin{array} { c } 
\text { Demand } \
\text { (in pairs } \
\text { of unit) }
\end{array} & \text { Month } & \begin{array} { c } 
\text { Demand } \
\text { (in pairs } \
\text { of units) }
\end{array} \
\hline \text { J an } & 8,000 & \text { J uly } & 1,000 \
\hline \text { Feb } & 7,000 & \text { Aug } & 1,300 \
\hline \text { Mar } & 5,000 & \text { Sept } & 2,000 \
\hline \text { Apr } & 4,000 & \text { Oct } & 3,000 \
\hline \text { May } & 2,000 & \text { Nov } & 5,700 \
\hline \text { J une } & 2,000 & \text { Dec } & 7,000 \
\hline
\end{array}$$
A)3,000
B)5,000
C)4,000
D)5,500

Accepted Answer

Under a level production strategy, the company will produce the same number of units each month irrespective of the demand. To calculate the ending inventory level for January, we need to first calculate the total number of units produced from January to December.

Total production = (8,000 + 7,000 + 5,000 + 4,000 + 2,000 + 2,000 + 1,000 + 1,300 + 2,000 + 3,000 + 5,700 + 7,000) = 48,000 pairs of units.

Now, we need to subtract the demand for the year from the total production to find the ending inventory for December.

Ending inventory for December = total production - demand for the year
= 48,000 - (8,000 + 7,000 + 5,000 + 4,000 + 2,000 + 2,000 + 1,000 + 1,300 + 2,000 + 3,000 + 5,700 + 7,000)
= 48,000 - 45,000
= 3,000 pairs of units.

Finally, we can calculate the ending inventory for January by subtracting the demand for January from the ending inventory for December and adding the beginning inventory for January.

Ending inventory for January = ending inventory for December - demand for January + beginning inventory for January
= 3,000 - 8,000 + 8,000
= 4,000 pairs of units.

Therefore, the best choice is C) 4,000.

Question 19

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

Accepted Answer

The technique that attempts to optimize a company's objective while considering constraints is called an optimization model. It involves the use of mathematical algorithms and formulas to find the best possible solution, given the specific constraints of the problem. Examples include linear programming and nonlinear programming. Transportation models focus on minimizing transportation costs, while simulations and management coefficient models are more general tools used to analyze complex systems and decision-making processes.

Question 20

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. $$\begin{array} { | c | c | c | c | } 
\hline \text { Month } & \begin{array} { c } 
\text { Demand } \
\text { (in pairs } \
\text { of unit) }
\end{array} & \text { Month } & \begin{array} { c } 
\text { Demand } \
\text { (in pairs } \
\text { of units) }
\end{array} \
\hline \text { Jan } & 8,000 & \text { J uly } & 1,000 \
\hline \text { Feb } & 7,000 & \text { Aug } & 1,300 \
\hline \text { Mar } & 6,000 & \text { Sept } & 1,000 \
\hline \text { Apr } & 4,000 & \text { Oct } & 3,000 \
\hline \text { May } & 2,000 & \text { Nov } & 5,700 \
\hline \text { J une } & 2,000 & \text { Dec } & 7,000 \
\hline
\end{array}$$
A)180
B)100
C)240
D)200

Accepted Answer

First, calculate the total annual demand: 8,000 + 7,000 + 6,000 + 4,000 + 2,000 + 2,000 + 1,000 + 1,300 + 1,000 + 3,000 + 5,700 + 7,000 = 48,000 pairs of skis. Each pair requires 8 hours to produce, so total hours needed are 48,000 * 8 = 384,000 hours. With each worker providing 160 hours per month and assuming 12 months of work, each worker provides 160 * 12 = 1,920 hours annually. Therefore, the number of workers needed is 384,000 / 1,920 = 200.

Quiz 20: Sales and Operations Planning

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

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?

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

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?

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

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 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 ______.

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

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

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

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

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

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

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

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?

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

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?