Question 1

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

BA constraint limiting overtime to less than 8 hours per week is valid because the attendant has made himself available for a maximum of 8 hours of overtime, thus it cannot exceed this limit. The objective function should maximize the amount of rocket widgets produced because the goal of a production manager is typically to maximize output or profit, and in this context, producing more widgets would likely contribute to achieving that goal.

Question 2

A home improvement store adds several workers to the garden center in the summer in order to meet the demands of do-it-yourselfers for their dazzling array of plants. Once gardening season is over, both the workers' jobs (and the plants they sold)will perish. The home improvement store is following an offloading strategy.

Accepted Answer

The home improvement store is following a seasonal strategy, not an offloading strategy. They are hiring additional workers and stocking more plants to meet the increased demand during gardening season, but they do not plan to simply dispose of these workers and plants once the season is over. They will likely cut back on staffing and plant orders until the next gardening season.

Question 3

Sales and operations planning across a supply chain is similar in nature to collaborative planning, forecasting, and replenishment.

Accepted Answer

Both sales and operations planning and collaborative planning, forecasting, and replenishment involve cross-functional collaboration and coordination among supply chain partners to align demand and supply and optimize overall performance.

Question 4

Each entity in a supply chain should produce its own sales and operations plan independent of the other members in order to improve the overall cost performance in a supply chain.

Accepted Answer

Collaboration and integration among entities in a supply chain are crucial for optimizing overall cost performance and ensuring that plans are aligned to meet demand efficiently. Independent planning can lead to inefficiencies and increased costs due to lack of coordination.

Question 5

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 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 an objective function and constraints to solve this problem.
 $$\begin{array} { | l | c | } 
\hline  { \text { Month } } & \text { Forecast } \
\hline \text { Fanuary } & 250 \
\hline \text { February } & 200 \
\hline \text { March } & 300 \
\hline \text { April } & 400 \
\hline \text { May } & 500 \
\hline
\end{array}$$

Accepted Answer

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

Question 6

A(n)________ limits our ability to increase profits or cut costs by reducing the set of possible solutions in an optimization model.

Accepted Answer

The answer of A(n)________ limits our ability to increase profits...

Question 7

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 8

A routine flight from LaGuardia Airport to Will Rogers Airport may have passengers that have paid radically different ticket prices. These prices fluctuate based on an approach called yield management.

Accepted Answer

This statement is true. Yield management is a strategy used by airlines to determine the optimal price for a flight based on factors such as supply and demand, time of year, and other market conditions. This can result in different passengers paying different ticket prices for the same flight.

Question 9

Which of these is NOT an advantage of linking sales and operations planning throughout the supply chain?

Accepted Answer

Linking sales and operations planning throughout the supply chain can lead to increased sales revenue, greater coordination, improved productivity, and fewer disruptions in the flow of goods and services. Therefore, A is the answer as it is NOT an advantage of linking sales and operations planning throughout the supply chain.

Question 10

How can and why should a firm link S&OP throughout the supply chain?

Accepted Answer

The answer of How can and why should a firm...

Question 11

As potato harvest season approaches, the number of year-round llama wranglers is insufficient to meet the demand, so a few wranglers are hired just for the month it takes to haul the harvest down from the mountains to the anxious potato-festival crowd. This approach to meeting the labor requirements is called:

Accepted Answer

The scenario describes a situation where there are different tiers or levels of employees hired for different periods of time based on the demand for labor. This approach is known as a tiered workforce.

Question 12

An organization that meets seasonal swings in demand by hiring and then laying off temporary workers while maintaining a few full-time permanent workers is employing a(n)________ strategy.

Accepted Answer

The answer of An organization that meets seasonal swings in...

Question 13

The objective function of an optimization modeling approach to S&OP should not allow available labor or equipment time to be exceeded.

Accepted Answer

The answer of The objective function of an optimization modeling...

Question 14

What are the possibilities for matching capacity to sales and vice versa when doing S&OP in a service environment?

Accepted Answer

The answer of What are the possibilities for matching capacity...

Question 15

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 16

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. It is possible to outsource some production, as long as the total output is limited to less than ten percent of total output. 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

The problem explicitly mentions that outsourcing is a possibility, and that the total output cannot exceed 10% if outsourcing is utilized. The other statements are either irrelevant to the given constraints or do not align with the objective of developing a sales and operations plan using an optimization model.

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

The objective function in an optimization model for this scenario should focus on minimizing costs, as this will help the company maximize its profit given the constraints of labor, machine operation, and material costs.

Question 18

A major retailer has recently deployed self-checkout stands at the front of the store. As long as you don't have items like paint, cold medicine, beer, fruits, or vegetables in your shopping cart, you can check out quickly in one of these lines. This retailer is providing a prime example of:

Accepted Answer

Offloading refers to the practice of transferring certain tasks or responsibilities from employees to customers, in this case, the task of checking out purchases, which can speed up the process and reduce labor costs for the retailer.

Question 19

A(n)________ is a formula that is the goal of an optimization model for S&OP.

Accepted Answer

The answer of A(n)________ is a formula that is the...

Question 20

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

Accepted Answer

Overscheduling of equipment time can lead to operational inefficiencies and potential delays in production. Therefore, it is important to include a constraint that ensures equipment time is not overbooked in the S&OP optimization modeling approach.

Quiz 10: Sales and Operations Planning Aggregate Planning