Test Bank Docx Sales and Operations Planning Chapter.8

Operations and Supply Chain Management: The Core, 5e (Jacobs)

Chapter 8 Sales and Operations Planning

1) The aggregate operations plan translates annual and quarterly business plans into broad labor and output plans for the intermediate term of 3 to 18 months.

Difficulty: 1 Easy

Topic: What Is Sales and Operations Planning?

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

2) The objective of the aggregate operations plan is to insure that the marketing and sales plans are realistic.

Difficulty: 1 Easy

Topic: What Is Sales and Operations Planning?

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

3) The aggregate operations plan differs in virtually every aspect in service organizations as contrasted with manufacturing organizations.

Difficulty: 1 Easy

Topic: Aggregate Planning Techniques

Learning Objective: 08-02 Construct and evaluate aggregate plans that employ different strategies for meeting demand.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

4) The sales and marketing plans are typically developed separately from the aggregate operations plan as a way of cross-checking results to insure the integrity of assumptions about the future.

Difficulty: 1 Easy

Topic: What Is Sales and Operations Planning?

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

5) Aggregate sales and operations planning occur in a company about every 3 to 18 months.

Difficulty: 1 Easy

Topic: What Is Sales and Operations Planning?

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

6) Aggregation in sales and operations planning is by groups of customers on the supply side and by product families on the demand side of the firm's supply chain.

Difficulty: 2 Medium

Topic: What Is Sales and Operations Planning?

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

7) Accurate medium-range planning increases the likelihood of operating within the limits of a budget.

Difficulty: 1 Easy

Topic: Aggregate Planning Techniques

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

8) The main purpose of the aggregate production plan is to specify the optimal combination of workforce level and inventory on hand.

Difficulty: 1 Easy

Topic: Aggregate Planning Techniques

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

9) The International Aggregate Planning Society (IAPS) has developed aggregate operations planning guidelines that are followed by a majority of manufacturing firms.

Difficulty: 1 Easy

Topic: Aggregate Planning Techniques

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

10) The sales and operations planning process consists of a series of meetings.

Difficulty: 1 Easy

Topic: What Is Sales and Operations Planning?

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

11) The sales and operations planning process is made up of a variety of analytical techniques that interact to produce short and intermediate term goals.

Difficulty: 2 Medium

Topic: What Is Sales and Operations Planning?

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

12) Subcontracting is viewed as a risky strategy because the firm may lose control of product design and pricing.

Difficulty: 1 Easy

Topic: Aggregate Planning Techniques

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

13) The operations plan should not be updated but should be followed precisely until the longest-term planning horizon has passed.

Difficulty: 1 Easy

Topic: Aggregate Planning Techniques

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

14) Fixed and variable costs incurred in producing a given product type in a given time period are relevant aggregate operations planning costs.

Difficulty: 1 Easy

Topic: Aggregate Planning Techniques

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

15) Backordering costs incurred in producing a given product type in a given time period are relevant aggregate operations planning costs.

Difficulty: 1 Easy

Topic: Aggregate Planning Techniques

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

16) Foregone profit margins are considered as relevant aggregate operations planning costs.

Difficulty: 2 Medium

Topic: Aggregate Planning Techniques

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

17) Costs incurred in hiring, training and laying off personnel are considered relevant aggregate operations planning costs.

Difficulty: 2 Medium

Topic: Aggregate Planning Techniques

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

18) Aggregate planning techniques is developed from the master schedule and the strategic capacity plan.

Difficulty: 1 Easy

Topic: What Is Sales and Operations Planning?

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

19) The widespread adoption of computing technology has led to the virtual abandonment of simple cut-and-try charting and graphical methods to develop aggregate operations plans.

Difficulty: 1 Easy

Topic: Aggregate Planning Techniques

Learning Objective: 08-02 Construct and evaluate aggregate plans that employ different strategies for meeting demand.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

20) The increasing complexity of modern operations management has made simple cut-and-try charting and graphical methods formerly used to develop aggregate operations plans impractical and obsolete.

Difficulty: 1 Easy

Topic: Aggregate Planning Techniques

Learning Objective: 08-02 Construct and evaluate aggregate plans that employ different strategies for meeting demand.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

21) In a services organization, strategic capacity planning follows process planning.

Difficulty: 1 Easy

Topic: What Is Sales and Operations Planning?

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

22) In a logistics organization, vehicle dispatching immediately precedes vehicle loading.

Difficulty: 1 Easy

Topic: What Is Sales and Operations Planning?

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

23) Yield management is the process of allocating the right type of capacity to the right type of customer at the right prices at the right time to maximize revenue or yield.

Difficulty: 1 Easy

Topic: Yield Management

Learning Objective: 08-03 Explain yield management and why it is an important strategy.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

24) Order scheduling is the step in the aggregate operations planning process that immediately follows material requirements planning.

Difficulty: 1 Easy

Topic: What Is Sales and Operations Planning?

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

25) The master production schedule is a crucial input into the aggregate operations plan.

Difficulty: 1 Easy

Topic: What Is Sales and Operations Planning?

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

26) In services, once the aggregate staffing level is determined, the focus is on short-term workforce and customer scheduling.

Difficulty: 1 Easy

Topic: What Is Sales and Operations Planning?

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

27) In aggregate operations planning, the variable "production rate" refers to the number of units completed per unit of time.

Difficulty: 1 Easy

Topic: Aggregate Planning Techniques

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

28) The aggregate operations planning, variable "workforce level" refers to the number of workers needed to accomplish the planned production.

Difficulty: 1 Easy

Topic: Aggregate Planning Techniques

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

29) The aggregate operations plan variable "inventory on hand" refers to the balance of unused inventory carried over from the previous time period.

Difficulty: 1 Easy

Topic: Aggregate Planning Techniques

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

30) Because a level production strategy does not require adjustment in the short-to-medium term, aggregate sales and operations planning is not required.

Difficulty: 2 Medium

Topic: Aggregate Planning Techniques

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

31) The essence of yield management is the ability to manage supply.

Difficulty: 1 Easy

Topic: Yield Management

Learning Objective: 08-03 Explain yield management and why it is an important strategy.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

32) One of the conditions that makes yield management effective is when inventory is easily stored and held for a time when demand is stronger.

Difficulty: 2 Medium

Topic: Yield Management

Learning Objective: 08-03 Explain yield management and why it is an important strategy.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

33) Yield management is an important tool that can be used to shape demand patterns.

Difficulty: 1 Easy

Topic: Yield Management

Learning Objective: 08-03 Explain yield management and why it is an important strategy.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

34) Firms facing cyclical demand fluctuations would be wise to introduce complementary products whose cycles are the same as their current products.

Difficulty: 1 Easy

Topic: Aggregate Planning Techniques

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

35) Firms that match the production rate to the order rate by hiring and laying off employees as the order rate varies are following what is known as the chase strategy.

Difficulty: 1 Easy

Topic: Aggregate Planning Techniques

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

36) A rate fence is a person who books airline seats at low rates far in advance and sells the seats at a profit later.

Difficulty: 1 Easy

Topic: Yield Management

Learning Objective: 08-03 Explain yield management and why it is an important strategy.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

37) A rate fence is a logical justification for different prices for what is essentially the same service.

Difficulty: 1 Easy

Topic: Yield Management

Learning Objective: 08-03 Explain yield management and why it is an important strategy.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

38) Pricing for a service should primarily relate to the cost of providing the service and has little to do with capacity issues the service provider might face.

Difficulty: 1 Easy

Topic: Yield Management

Learning Objective: 08-03 Explain yield management and why it is an important strategy.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

39) In an overview of the major operations planning activities in a typical organization, which of the following activities precedes aggregate sales and operations planning?

A) Process planning

B) Workforce scheduling

C) Master production scheduling

D) Materials requirements planning

E) Order scheduling

Difficulty: 1 Easy

Topic: What Is Sales and Operations Planning?

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

40) In an overview of the major operations planning activities in a typical logistics organization, which of the following activities follows aggregate sales and operations planning?

A) Process planning

B) Workforce scheduling

C) Vehicle loading

D) Materials requirements planning

E) Order scheduling

Difficulty: 1 Easy

Topic: What Is Sales and Operations Planning?

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

41) In an overview of the major operations planning activities in a typical service organization, which of the following activities follows aggregate sales and operations planning?

A) Process planning

B) Workforce scheduling

C) Master scheduling

D) Materials requirements planning

E) Order scheduling

Difficulty: 1 Easy

Topic: What Is Sales and Operations Planning?

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

42) In an overview of the major operations planning activities in a typical logistics organization, which of the following activities most immediately follows aggregate sales and operations planning?

A) Process planning

B) Strategic capacity planning

C) Vehicle dispatching

D) Vehicle capacity planning

E) Warehouse receipt planning

Difficulty: 2 Medium

Topic: What Is Sales and Operations Planning?

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

43) The main purpose of aggregate operations planning is to specify the optimal combination of which of the following?

A) Workforce levels and inventory on hand

B) Inventory on hand and financing costs for that inventory

C) The strategic plan and the products available for sale

D) The workforce level and the degree of automation

E) Operational costs and the cash flow to support operations

Difficulty: 1 Easy

Topic: Aggregate Planning Techniques

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

44) In conducting aggregate operations planning there are a number of required inputs. Which of the following are inputs considered external to the firm?

A) Inventory levels and market demand

B) Raw material availability and competitor's behavior

C) Current workforce and economic conditions

D) Current physical capacity and market demand

E) Subcontractor capacity and inventory levels

Difficulty: 2 Medium

Topic: Aggregate Planning Techniques

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

45) In conducting aggregate operations planning there are a number of required inputs. Which of the following are inputs considered external to the firm?

A) Competitor behavior and economic conditions

B) Market demand and inventory levels

C) Subcontractor capacity and current workforce

D) Economic conditions and current physical capacity

E) Raw material availability and inventory levels

Difficulty: 2 Medium

Topic: Aggregate Planning Techniques

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

46) In conducting aggregate operations planning there are a number of required inputs. Which of the following are considered inputs internal to the firm?

A) Inventory levels and economic conditions

B) Market demand and subcontractor capacity

C) Current physical capacity and current workforce

D) Competitor behavior and current workforce

E) Current physical capacity and raw material availability

Difficulty: 1 Easy

Topic: Aggregate Planning Techniques

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

47) Which of the following is a production planning strategy presented in the textbook?

A) Level

B) Strategic

C) Balanced

D) Synchronous

E) Optimal

Difficulty: 1 Easy

Topic: Aggregate Planning Techniques

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

48) Which of the following is considered a "pure" production planning strategy?

A) Variable workforce, stable work hours

B) Lag demand

C) Level playing field

D) Stable workforce, variable work hours

E) Product warehouse

Difficulty: 1 Easy

Topic: Aggregate Planning Techniques

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

49) Matching the production rate to the order rate by hiring and laying off employees as the order rate varies is which of the following pure production planning strategies?

A) Stable workforce, variable work hours

B) Chase

C) Level

D) Meeting demand

E) Minimizing inventory

Difficulty: 1 Easy

Topic: Aggregate Planning Techniques

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

50) Maintaining a stable workforce working at a constant output rate while shortages and surpluses are absorbed by fluctuating inventory levels, order backlogs, and allowing lost sales is which of the following production planning strategies?

A) Stable workforce, variable work hours

B) Chase

C) Level

D) Full employment

E) Skill maintenance

Difficulty: 1 Easy

Topic: Aggregate Planning Techniques

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

51) Which of the following costs are relevant to aggregate operations planning?

A) Sunk costs

B) Transaction costs

C) Backordering costs

D) Legal costs

E) Fixed costs

Difficulty: 1 Easy

Topic: Aggregate Planning Techniques

Learning Objective: 08-01 Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

52) Using the cut-and-try method for aggregate operations planning we can determine the production requirement in units of product. If the beginning inventory is 100 units, the demand forecast is 1,200, and the necessary safety stock is 20% of the demand forecast, which of the following is the production requirement?

A) 1,200

B) 1,300

C) 1,340

D) 1,500

E) 1,540

Difficulty: 2 Medium

Topic: Aggregate Planning Techniques

Learning Objective: 08-02 Construct and evaluate aggregate plans that employ different strategies for meeting demand.

Bloom's: Analyze

AACSB: Analytic

Accessibility: Keyboard Navigation

53) Using the cut-and-try method for aggregate operations planning we can determine the production requirement in units of product. If the beginning inventory is 500 units, the demand forecast is 1,000, and the necessary safety stock is 10% of the demand forecast, which of the following is the production requirement?

A) 1,000

B) 600

C) 550

D) 450

E) 100

Difficulty: 2 Medium

Topic: Aggregate Planning Techniques

Learning Objective: 08-02 Construct and evaluate aggregate plans that employ different strategies for meeting demand.

Bloom's: Analyze

AACSB: Analytic

Accessibility: Keyboard Navigation

54) Which of the following methods discussed in the text requires generating several alternative aggregate plans?

A) Trial and error

B) Production smoothing

C) Graphing and charting

D) Aggregate plan simulation

E) Cut and try

Difficulty: 2 Medium

Topic: Aggregate Planning Techniques

Learning Objective: 08-02 Construct and evaluate aggregate plans that employ different strategies for meeting demand.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

55) From an operational perspective yield management is most effective under which of the following circumstances?

A) Demand cannot be segmented by customer

B) Inventory is perishable

C) Fixed costs are low and variable costs are high

D) The customer is a "captive" of the system

E) The firm doing yield management is very profitable

Difficulty: 2 Medium

Topic: Yield Management

Learning Objective: 08-03 Explain yield management and why it is an important strategy.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

56) From an operational perspective yield management is least effective under which of the following circumstances?

A) Demand can be segmented by customer

B) The product can be sold in advance

C) Demand is highly variable

D) Fixed costs are high and variable costs are low

E) Demand is stable and close to capacity

Difficulty: 2 Medium

Topic: Yield Management

Learning Objective: 08-03 Explain yield management and why it is an important strategy.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

57) From an operational perspective yield management is least effective under which of the following circumstances?

A) Demand can be segmented by customer

B) The product can be sold in advance

C) The product can be kept to be sold when demand is stronger

D) Fixed costs are high and variable costs are low

E) Demand is highly variable

Difficulty: 2 Medium

Topic: Yield Management

Learning Objective: 08-03 Explain yield management and why it is an important strategy.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

58) Which of the following is not one of the "number of interesting issues that arise in yield management?"

A) Pricing structures must appear logical to the customer and justify different prices

B) Designing yield management programs that cannot be imitated by a competitor

C) How to handle variability in customer arrivals, duration, and interval

D) Managing the service process

E) Training workers and managers to work in a yield management environment

Difficulty: 2 Medium

Topic: Yield Management

Learning Objective: 08-03 Explain yield management and why it is an important strategy.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

59) Using the cut-and-try method for aggregate operations planning, we can back calculate beginning inventory if we knew the values of other relevant variables. What should have been the initial inventory in units of demand, if the production requirement in units of product is 900, demand forecast is 1,000, and the necessary safety stock is 20 percent of the demand forecast, Choose the right answer for the beginning inventory.

A) 300

B) 500

C) 100

D) 1,900

E) Cannot find it

Difficulty: 2 Medium

Topic: Aggregate Planning Techniques

Learning Objective: 08-02 Construct and evaluate aggregate plans that employ different strategies for meeting demand.

Bloom's: Analyze

AACSB: Analytic

Accessibility: Keyboard Navigation

60) Using the cut-and-try method for aggregate operations planning, we can calculate the ending inventory and then calculate the safety stock as a percent of forecast demand. Suppose that the beginning inventory is 300, the production requirement in units of product is 1,350, demand forecast is 1,500, what is the ending inventory and percent safety stock?

A) 200 and 10%

B) 150 and 10%

C) 300 and 20%

D) 450 and 30%

E) 150 and 20%

Difficulty: 2 Medium

Topic: Aggregate Planning Techniques

Learning Objective: 08-02 Construct and evaluate aggregate plans that employ different strategies for meeting demand.

Bloom's: Analyze

AACSB: Analytic

Accessibility: Keyboard Navigation

61) Using constant workforce and varying inventory and stock out, what would be the constant workforce? Production required in periods 1,2 and 3 respectively are 1,200, 1,500 and 900 units. One worker during the panning horizon can produce two units in one day. Number of work days are 22 in period 17 in period 2 and 21 in period 3. Assume that the beginning inventory and the ending inventory required are 300 units each. What is the number of workers required during the planning horizon of three periods?

A) 60

B) 600

C) 35

D) 30

E) 300

Difficulty: 2 Medium

Topic: Aggregate Planning Techniques

Learning Objective: 08-02 Construct and evaluate aggregate plans that employ different strategies for meeting demand.

Bloom's: Analyze

AACSB: Analytic

Accessibility: Keyboard Navigation