Question 1

Which approach to capacity management makes use of overtime,which is varied to match the variation in demand?

Accepted Answer

A) Time flexibility from workforce 
B) Use of seasonal workforce 
C) Use of subcontracting 
D) Use of dual facilities-dedicated and flexible 
A) Time flexibility from workforce 
B) Use of seasonal workforce 
C) Use of subcontracting 
D) Use of dual facilities-dedicated and flexible

Question 2

The Okra Colada
An okra farm anticipates highly seasonal demand for their product,tender pods of okra that can be made into the new drink sensation,the okra colada.Their estimate of the demand profile appears below.This forecast is based on the demand profile of last year's drink,the tuna colada.Once everyone in the test market had actually sampled the drink,demand fell to zero.
 $$\begin{array} { | c | c | } 
\hline \text { Month } & \text { Demand Forecast } \
\hline \text { January } & 1,200 \
\hline \text { February } & 2,400 \
\hline \text { March } & 3,600 \
\hline \text { April } & 4,800 \
\hline \text { May } & 2,200 \
\hline \text { June } & 200 \
\hline
\end{array}$$ The costs for the managerial levers appear in this table.
 $\begin{array}{|l|c|}
\hline \text { Item } & \text { Cost } \
\hline\text { Materials cost/unit } & \$ 10 \
\hline \text { Inventory holding cost/unit/month } & \$ 2 \
\hline \text { Marginal cost of stockout/unit/month } & \$ 5 \
\hline \text { Hiring and training cost/worker } & \$ 300 \
\hline \text { Layoff cost/worker } & \$ 500 \
\hline \text { Labor hours required/unit } & 4 \
\hline \text { Regular time cost/hour } & \$ 4 \
\hline \text { Over time cost/hour } & \$ 6 \
\hline \text { Beginning inventory equals } & 1000 \
\hline \text { Ending inventory greater than } & 500 \
\hline \text { Marginal subcontracting cost/unit } & \$ 30\
\hline
\end{array}$ The base price per okra colada is $40 per unit and there is no promotion,but management is seriously considering different promotional plans.The beginning workforce level is 80 workers.
-Use the Okra Colada scenario to answer this question.What is the optimal total cost when using linear programming to solve this sales and operations planning problem?

Accepted Answer

A) $424,140 
B) $414,240 
C) $400,340 
D) $434,040 
A) $424,140 
B) $414,240 
C) $400,340 
D) $434,040

Question 3

An increase in consumption of the product either from new or existing customers is

Accepted Answer

A) market growth. 
B) stealing share. 
C) forward selling. 
D) forward buying. 
A) market growth. 
B) stealing share. 
C) forward selling. 
D) forward buying.

Question 4

Offering a promotion during a peak period that has significant forward buying creates even more variable demand than before the promotion.

Accepted Answer

A) True 
 B)False

Question 5

Which factor favors promotion during peak-demand periods?

Accepted Answer

A) Low margin 
B) Low ability to steal market share 
C) High ability to increase overall market 
D) High margin 
A) Low margin 
B) Low ability to steal market share 
C) High ability to increase overall market 
D) High margin

Question 6

Seasonal demand can be met by

Accepted Answer

A) maintaining enough manufacturing capacity to meet demand in any period. 
B) building up inventory during the off season to meet demand during peak seasons. 
C) offering a price promotion during periods of low demand to shift some of the demand into a slow period. 
D) all of the above 
A) maintaining enough manufacturing capacity to meet demand in any period. 
B) building up inventory during the off season to meet demand during peak seasons. 
C) offering a price promotion during periods of low demand to shift some of the demand into a slow period. 
D) all of the above

Question 7

In this approach to managing capacity,a firm uses flexible work hours by the workforce to manage capacity to better meet demand.

Accepted Answer

A) Time flexibility from workforce 
B) Use of seasonal workforce 
C) Use of subcontracting 
D) Use of dual facilities-specialized and flexible 
A) Time flexibility from workforce 
B) Use of seasonal workforce 
C) Use of subcontracting 
D) Use of dual facilities-specialized and flexible

Question 8

Offering a promotion during a peak period that has significant forward buying

Accepted Answer

A) creates a desirable demand pattern. 
B) creates a demand pattern less costly to serve. 
C) creates a demand pattern even more costly to serve. 
D) shifts demand from the peak period to the slow period. 
A) creates a desirable demand pattern. 
B) creates a demand pattern less costly to serve. 
C) creates a demand pattern even more costly to serve. 
D) shifts demand from the peak period to the slow period.

Question 9

In general,as the fraction of increased demand coming from forward buying grows,offering the promotion during the peak demand period becomes more attractive.

Accepted Answer

A) True 
 B)False

Question 10

Discuss the approaches a firm can use to manage inventory to meet predictable variability of demand.

Accepted Answer

When managing inventory to meet predicta

Question 11

Which approach to capacity management would use production machinery that can be changed easily from producing one product to another?

Accepted Answer

A) Time flexibility from workforce 
B) Use of subcontracting 
C) Use of dual facilities-dedicated and flexible 
D) Designing product flexibility into the production processes 
A) Time flexibility from workforce 
B) Use of subcontracting 
C) Use of dual facilities-dedicated and flexible 
D) Designing product flexibility into the production processes

Question 12

The Tuna Colada
A fishing consortium anticipates highly seasonal demand for their product,yellowtail tuna steaks that can be made into the new drink sensation,the tuna colada.Their estimate of the demand profile appears below.This forecast is based on the demand profile of last year's drink,the okra colada with one key difference.The tuna colada is being positioned as a healthier alternative to eggnog,so demand is expected to climb throughout the planning period with a peak in December.
 $$\begin{array} { | c | c | } 
\hline \text { Month } & \text { Demand Forecast } \
\hline \text { July } & 1,560 \
\hline \text { August } & 2,200 \
\hline \text { September } & 2,850 \
\hline \text { October } & 3,440 \
\hline \text { November } & 4,020 \
\hline \text { December } & 5,280 \
\hline
\end{array}$$ The costs for the managerial levers appear in this table.
 $\begin{array}{|l|c|}
\hline \text { Item } & \text { Cost } \
\hline \text { Materials cost/unit } & \$ 10 \
\hline \text { Inventory holding cost/unit/month } & \$ 4 \
\hline \text { Marginal cost of stockout/unit/month } & \$ 12 \
\hline \text { Hiring and training cost/worker } & \$ 200 \
\hline \text { Layoff cost/worker } & \$ 800 \
\hline \text { Labor hours required/unit } & 3 \
\hline \text { Regular time cost/hour } & \$ 16 \
\hline \text { Over time cost/hour } & \$ 24 \
\hline \text { Period beginning inventory equals } & 0 \
\hline \text { Period ending inventory equals } & 0 \
\hline \text { Marginal subcontracting cost/unit } & \$ 80\
\hline
\end{array}$ The base price per tuna colada is $75 and there is currently no promotion,hence,no forward buying,but management is seriously considering different promotional plans.The beginning workforce level is 80 employees.
-Use the Tuna Colada scenario to answer this question.Suppose a promotion in month 1 results in 10% consumption and a 20% forward buy.What is the peak level of inventory during the six-month planning period?

Accepted Answer

A) 1,220 units in August 
B) 1,020 units in September 
C) 940 units in August 
D) 1,380 units in September 
A) 1,220 units in August 
B) 1,020 units in September 
C) 940 units in August 
D) 1,380 units in September

Question 13

When faced with seasonal demand,a firm should use a combination of pricing (to manage demand)and production and inventory (to manage supply)to improve profitability.

Accepted Answer

A) True 
 B)False

Question 14

When performing aggregate planning,the goal of all firms in the supply chain should be to maximize individual firm profits.

Accepted Answer

A) True 
 B)False

Question 15

The Okra Colada
An okra farm anticipates highly seasonal demand for their product,tender pods of okra that can be made into the new drink sensation,the okra colada.Their estimate of the demand profile appears below.This forecast is based on the demand profile of last year's drink,the tuna colada.Once everyone in the test market had actually sampled the drink,demand fell to zero.
 $$\begin{array} { | c | c | } 
\hline \text { Month } & \text { Demand Forecast } \
\hline \text { January } & 1,200 \
\hline \text { February } & 2,400 \
\hline \text { March } & 3,600 \
\hline \text { April } & 4,800 \
\hline \text { May } & 2,200 \
\hline \text { June } & 200 \
\hline
\end{array}$$ The costs for the managerial levers appear in this table.
 $\begin{array}{|l|c|}
\hline \text { Item } & \text { Cost } \
\hline\text { Materials cost/unit } & \$ 10 \
\hline \text { Inventory holding cost/unit/month } & \$ 2 \
\hline \text { Marginal cost of stockout/unit/month } & \$ 5 \
\hline \text { Hiring and training cost/worker } & \$ 300 \
\hline \text { Layoff cost/worker } & \$ 500 \
\hline \text { Labor hours required/unit } & 4 \
\hline \text { Regular time cost/hour } & \$ 4 \
\hline \text { Over time cost/hour } & \$ 6 \
\hline \text { Beginning inventory equals } & 1000 \
\hline \text { Ending inventory greater than } & 500 \
\hline \text { Marginal subcontracting cost/unit } & \$ 30\
\hline
\end{array}$ The base price per okra colada is $40 per unit and there is no promotion,but management is seriously considering different promotional plans.The beginning workforce level is 80 workers.
-Use the Okra Colada scenario to answer this question.What is the optimal profit when using linear programming to solve this sales and operations planning problem?

Accepted Answer

A) $159,330 
B) $183,440 
C) $167,550 
D) $175,660 
A) $159,330 
B) $183,440 
C) $167,550 
D) $175,660

Question 16

The disadvantage of building up inventory during the off season to keep production stable year round is the expensive capacity that would go unused during most months when demand was lower.

Accepted Answer

A) True 
 B)False

Question 17

Customers moving up future purchases to the present is

Accepted Answer

A) market growth. 
B) stealing share. 
C) forward selling. 
D) forward buying. 
A) market growth. 
B) stealing share. 
C) forward selling. 
D) forward buying.

Question 18

The advantage of carrying enough manufacturing capacity to meet demand in any period is very low inventory costs,because no inventory needs to be carried from period to period.

Accepted Answer

A) True 
 B)False

Question 19

Scheduling the workforce so that the available capacity better matches demand is using time flexibility from the workforce.

Accepted Answer

A) True 
 B)False

Question 20

The Tuna Colada
A fishing consortium anticipates highly seasonal demand for their product,yellowtail tuna steaks that can be made into the new drink sensation,the tuna colada.Their estimate of the demand profile appears below.This forecast is based on the demand profile of last year's drink,the okra colada with one key difference.The tuna colada is being positioned as a healthier alternative to eggnog,so demand is expected to climb throughout the planning period with a peak in December.
 $$\begin{array} { | c | c | } 
\hline \text { Month } & \text { Demand Forecast } \
\hline \text { July } & 1,560 \
\hline \text { August } & 2,200 \
\hline \text { September } & 2,850 \
\hline \text { October } & 3,440 \
\hline \text { November } & 4,020 \
\hline \text { December } & 5,280 \
\hline
\end{array}$$ The costs for the managerial levers appear in this table.
 $\begin{array}{|l|c|}
\hline \text { Item } & \text { Cost } \
\hline \text { Materials cost/unit } & \$ 10 \
\hline \text { Inventory holding cost/unit/month } & \$ 4 \
\hline \text { Marginal cost of stockout/unit/month } & \$ 12 \
\hline \text { Hiring and training cost/worker } & \$ 200 \
\hline \text { Layoff cost/worker } & \$ 800 \
\hline \text { Labor hours required/unit } & 3 \
\hline \text { Regular time cost/hour } & \$ 16 \
\hline \text { Over time cost/hour } & \$ 24 \
\hline \text { Period beginning inventory equals } & 0 \
\hline \text { Period ending inventory equals } & 0 \
\hline \text { Marginal subcontracting cost/unit } & \$ 80\
\hline
\end{array}$ The base price per tuna colada is $75 and there is currently no promotion,hence,no forward buying,but management is seriously considering different promotional plans.The beginning workforce level is 80 employees.
-Use the Tuna Colada scenario to answer this question.If this problem is to be solved using linear programming,how should the objective function read?

Accepted Answer

A) Minimize total cost 
B) Maximize total revenue 
C) Minimize total price 
D) Maximize total demand 
A) Minimize total cost 
B) Maximize total revenue 
C) Minimize total price 
D) Maximize total demand

Which approach to capacity management makes use of overtime,which is varied to match the variation in demand?

An increase in consumption of the product either from new or existing customers is

Offering a promotion during a peak period that has significant forward buying creates even more variable demand than before the promotion.

Which factor favors promotion during peak-demand periods?

Seasonal demand can be met by

In this approach to managing capacity,a firm uses flexible work hours by the workforce to manage capacity to better meet demand.

Offering a promotion during a peak period that has significant forward buying

In general,as the fraction of increased demand coming from forward buying grows,offering the promotion during the peak demand period becomes more attractive.

Discuss the approaches a firm can use to manage inventory to meet predictable variability of demand.

Which approach to capacity management would use production machinery that can be changed easily from producing one product to another?

When faced with seasonal demand,a firm should use a combination of pricing (to manage demand)and production and inventory (to manage supply)to improve profitability.

When performing aggregate planning,the goal of all firms in the supply chain should be to maximize individual firm profits.

The disadvantage of building up inventory during the off season to keep production stable year round is the expensive capacity that would go unused during most months when demand was lower.

Customers moving up future purchases to the present is

The advantage of carrying enough manufacturing capacity to meet demand in any period is very low inventory costs,because no inventory needs to be carried from period to period.

Scheduling the workforce so that the available capacity better matches demand is using time flexibility from the workforce.

Understanding the Supply Chain

Achieving Strategic Fit in a Supply Chain

Supply Chain Drivers and Metrics

Designing Distribution Networks and Applications to E-Business

Network Design in the Supply Chain

Designing Global Supply Chain Networks

Demand Forecasting in a Supply Chain

Aggregate Planning in a Supply Chain

Coordination in a Supply Chain

Managing Economies of Scale in a Supply Chain: Cycle Inventory

Managing Uncertainty in a Supply Chain: Safety Inventory

Linking Product Availability to Profits

Transportation in a Supply Chain

Sourcing Decisions in a Supply Chain

Pricing and Revenue Management in a Supply Chain

Sustainability and the Supply Chain

Filters

Exam 9: Sales and Operations Planning: Planning Supply and Demand

Which approach to capacity management makes use of overtime,which is varied to match the variation in demand?

An increase in consumption of the product either from new or existing customers is

Offering a promotion during a peak period that has significant forward buying creates even more variable demand than before the promotion.

Which factor favors promotion during peak-demand periods?

Seasonal demand can be met by

In this approach to managing capacity,a firm uses flexible work hours by the workforce to manage capacity to better meet demand.

Offering a promotion during a peak period that has significant forward buying

In general,as the fraction of increased demand coming from forward buying grows,offering the promotion during the peak demand period becomes more attractive.

Discuss the approaches a firm can use to manage inventory to meet predictable variability of demand.

Which approach to capacity management would use production machinery that can be changed easily from producing one product to another?

When faced with seasonal demand,a firm should use a combination of pricing (to manage demand)and production and inventory (to manage supply)to improve profitability.

When performing aggregate planning,the goal of all firms in the supply chain should be to maximize individual firm profits.

The disadvantage of building up inventory during the off season to keep production stable year round is the expensive capacity that would go unused during most months when demand was lower.

Customers moving up future purchases to the present is

The advantage of carrying enough manufacturing capacity to meet demand in any period is very low inventory costs,because no inventory needs to be carried from period to period.

Scheduling the workforce so that the available capacity better matches demand is using time flexibility from the workforce.

Understanding the Supply Chain

Achieving Strategic Fit in a Supply Chain

Supply Chain Drivers and Metrics

Designing Distribution Networks and Applications to E-Business

Network Design in the Supply Chain

Designing Global Supply Chain Networks

Demand Forecasting in a Supply Chain

Aggregate Planning in a Supply Chain

Coordination in a Supply Chain

Managing Economies of Scale in a Supply Chain: Cycle Inventory

Managing Uncertainty in a Supply Chain: Safety Inventory

Linking Product Availability to Profits

Transportation in a Supply Chain

Sourcing Decisions in a Supply Chain

Pricing and Revenue Management in a Supply Chain

Sustainability and the Supply Chain

Filters