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 ideal workforce level throughout January-June?

A) 84 workers B) 80 workers C) 57 workers D) 53 workers A) 84 workers B) 80 workers C) 57 workers D) 53 workers

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 solved using linear programming,what is the minimum possible cost that still permits the planners to meet demand?

A) $1,472,320 B) $1,451,250 C) $1,443,680 D) $1,430,120 A) $1,472,320 B) $1,451,250 C) $1,443,680 D) $1,430,120

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 solved using linear programming,which of these statements is best?

A) The workforce rises and then falls as the period moves from July to December. B) There are more units made using overtime than there are instances of stocking out. C) Inventory is at its peak during the month of September. D) There are more units made by subcontracting than there are workers laid off throughout the planning period. A) The workforce rises and then falls as the period moves from July to December. B) There are more units made using overtime than there are instances of stocking out. C) Inventory is at its peak during the month of September. D) There are more units made by subcontracting than there are workers laid off throughout the planning period.

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.Which of the following statements is true when using linear programming to solve this sales and operations planning problem?

A) More workers are hired than laid off. B) More units are built using subcontracting than using overtime. C) The number of stockouts exceeds the number of units in ending inventory from January-May. D) The number of units subcontracted exceeds the number of stockouts that occur. A) More workers are hired than laid off. B) More units are built using subcontracting than using overtime. C) The number of stockouts exceeds the number of units in ending inventory from January-May. D) The number of units subcontracted exceeds the number of stockouts that occur.

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

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. Month Demand Forecast January 1,200 February 2,400 March 3,600 April 4,800 May 2,200 June 200 The costs for the managerial levers appear in this table. Item Cost Materials cost/unit \ 10 Inventory holding cost/unit/month \ 2 Marginal cost of stockout/unit/month \ 5 Hiring and training cost/worker \ 300 Layoff cost/worker \ 500 Labor hours required/unit 4 Regular time cost/hour \ 4 Over time cost/hour \ 6 Beginning inventory equals 1000 Ending inventory greater than 500 Marginal subcontracting cost/unit \ 30 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 ideal workforce level throughout January-June?

(Multiple Choice)

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Question 61

A firm that uses flexible work hours from the workforce to manage capacity to better meet demand is using a seasonal workforce.

(True/False)

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Question 62

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. Month Demand Forecast July 1,560 August 2,200 September 2,850 October 3,440 November 4,020 December 5,280 The costs for the managerial levers appear in this table. Item Cost Materials cost/unit \ 10 Inventory holding cost/unit/month \ 4 Marginal cost of stockout/unit/month \ 12 Hiring and training cost/worker \ 200 Layoff cost/worker \ 800 Labor hours required/unit 3 Regular time cost/hour \ 16 Over time cost/hour \ 24 Period beginning inventory equals 0 Period ending inventory equals 0 Marginal subcontracting cost/unit \ 80 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 solved using linear programming,what is the minimum possible cost that still permits the planners to meet demand?

(Multiple Choice)

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Question 63

Which of the following is an approach that firms can use when managing inventory to meet predictable demand variability?

(Multiple Choice)

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Question 64

The capacity management approach where a firm has production lines whose production rate can easily be varied to match demand is

(Multiple Choice)

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Question 65

In this approach to managing capacity,a firm purchases peak production so that internal production remains level and can be done cheaply.

(Multiple Choice)

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Question 66

In this approach to managing capacity,a firm has flexible production lines whose production rate can easily be varied.

(Multiple Choice)

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Question 67

Which approach to capacity management makes use of spare plant capacity that exists in the form of hours when the plant is not operational?

(Multiple Choice)

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Question 68

The use of a seasonal workforce is common in the tourism industry.

(True/False)

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Question 69

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. Month Demand Forecast July 1,560 August 2,200 September 2,850 October 3,440 November 4,020 December 5,280 The costs for the managerial levers appear in this table. Item Cost Materials cost/unit \ 10 Inventory holding cost/unit/month \ 4 Marginal cost of stockout/unit/month \ 12 Hiring and training cost/worker \ 200 Layoff cost/worker \ 800 Labor hours required/unit 3 Regular time cost/hour \ 16 Over time cost/hour \ 24 Period beginning inventory equals 0 Period ending inventory equals 0 Marginal subcontracting cost/unit \ 80 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 solved using linear programming,which of these statements is best?

(Multiple Choice)

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Question 70

Which factor favors promotion during low-demand periods?

(Multiple Choice)

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Question 71

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. Month Demand Forecast January 1,200 February 2,400 March 3,600 April 4,800 May 2,200 June 200 The costs for the managerial levers appear in this table. Item Cost Materials cost/unit \ 10 Inventory holding cost/unit/month \ 2 Marginal cost of stockout/unit/month \ 5 Hiring and training cost/worker \ 300 Layoff cost/worker \ 500 Labor hours required/unit 4 Regular time cost/hour \ 4 Over time cost/hour \ 6 Beginning inventory equals 1000 Ending inventory greater than 500 Marginal subcontracting cost/unit \ 30 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.Which of the following statements is true when using linear programming to solve this sales and operations planning problem?

(Multiple Choice)

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Question 72

The advantage of building up inventory during the off season to meet demand during peak seasons and keep production stable year round is

(Multiple Choice)

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Question 73

Discuss how a firm can respond to predictable variability of demand in the supply chain.

(Essay)

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Question 74

The key to which capacity management approach would involve having both volume (fluctuating demand from a manufacturer)and variety flexibility (demand from several manufacturers)to be sustainable?

(Multiple Choice)

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Question 75

A firm that purchases peak production capability from other companies is using subcontracting.

(True/False)

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Question 76

As the product margin declines,promoting during the peak demand period becomes

(Multiple Choice)

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Question 77

The capacity management approach where a firm builds facilities to produce a relatively stable output of products over time in a very efficient manner and facilities to produce a widely varying volume and variety of products,but at a higher unit cost is

(Multiple Choice)

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Question 78

One key to successful collaboration when the supply chain is performing aggregate planning is

(Multiple Choice)

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Question 79

Which approach to capacity management would require that the workforce be multi-skilled and easily adapt to being moved from line to line?

(Multiple Choice)

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Question 80

A firm that uses flexible work hours from the workforce to manage capacity to better meet demand is using a seasonal workforce.

Which of the following is an approach that firms can use when managing inventory to meet predictable demand variability?

The capacity management approach where a firm has production lines whose production rate can easily be varied to match demand is

In this approach to managing capacity,a firm purchases peak production so that internal production remains level and can be done cheaply.

In this approach to managing capacity,a firm has flexible production lines whose production rate can easily be varied.

Which approach to capacity management makes use of spare plant capacity that exists in the form of hours when the plant is not operational?

The use of a seasonal workforce is common in the tourism industry.

Which factor favors promotion during low-demand periods?

The advantage of building up inventory during the off season to meet demand during peak seasons and keep production stable year round is

Discuss how a firm can respond to predictable variability of demand in the supply chain.

The key to which capacity management approach would involve having both volume (fluctuating demand from a manufacturer)and variety flexibility (demand from several manufacturers)to be sustainable?

A firm that purchases peak production capability from other companies is using subcontracting.

As the product margin declines,promoting during the peak demand period becomes

The capacity management approach where a firm builds facilities to produce a relatively stable output of products over time in a very efficient manner and facilities to produce a widely varying volume and variety of products,but at a higher unit cost is

One key to successful collaboration when the supply chain is performing aggregate planning is

Which approach to capacity management would require that the workforce be multi-skilled and easily adapt to being moved from line to line?

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

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