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 should the objective function be when using linear programming to solve this sales and operations planning problem?

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

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) No layoffs occur. B) No stockouts occur. C) No subcontracting is used. D) No overtime is used. A) No layoffs occur. B) No stockouts occur. C) No subcontracting is used. D) No overtime is used.

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.What is the minimum value the cost of subcontracting must have to ensure that it is not used during the planning period?

A) $110 per unit B) $107 per unit C) $104 per unit D) $101 per unit A) $110 per unit B) $107 per unit C) $104 per unit D) $101 per unit

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 parameters equals 0 in an optimal solution?

A) Layoff cost per worker B) Number of units made using overtime C) Number of workers laid off D) Number of units made using subcontracting A) Layoff cost per worker B) Number of units made using overtime C) Number of workers laid off D) Number of units made using subcontracting

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 maximum profit possible throughout the planning period?

A) -$11,588 B) $15,974 C) -$17,548 D) $23,462 A) -$11,588 B) $15,974 C) -$17,548 D) $23,462

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 should the objective function be when using linear programming to solve this sales and operations planning problem?

(Multiple Choice)

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Question 81

The advantage of offering a price promotion during periods of low demand to shift some of the demand into a slow period is

(Multiple Choice)

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Question 82

Companies typically divide the task of supply and demand so that

(Multiple Choice)

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Question 83

Discuss the approaches that can be used to manage capacity to meet predictable variability of demand.

(Essay)

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Question 84

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 85

In this approach to managing capacity,a firm uses a temporary workforce during the peak season to increase capacity to match demand.

(Multiple Choice)

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Question 86

Which approach to capacity management would only be effective if the overall demand across all the products is relatively stable?

(Multiple Choice)

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Question 87

________ variability is change in demand that can be forecasted.

(Multiple Choice)

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Question 88

A firm can vary supply of product by controlling production capacity and inventory.

(True/False)

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Question 89

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.What is the minimum value the cost of subcontracting must have to ensure that it is not used during the planning period?

(Multiple Choice)

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Question 90

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 parameters equals 0 in an optimal solution?

(Multiple Choice)

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Question 91

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.Suppose a promotion in month 1 results in 10% consumption and a 20% forward buy.What is the maximum profit possible throughout the planning period?

(Multiple Choice)

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Question 92

The use of a part-time workforce to increase the capacity flexibility by enabling the firm to have more people at work during peak periods is designing product flexibility into the production processes.

(True/False)

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Question 93

When planning,the goal of all firms in the supply chain should be to maximize supply chain profits because

(Multiple Choice)

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Question 94

The advantage of offering a price promotion during periods of low demand to shift some of the demand into a slow period is

Companies typically divide the task of supply and demand so that

Discuss the approaches that can be used to manage capacity to meet predictable variability of demand.

In this approach to managing capacity,a firm uses a temporary workforce during the peak season to increase capacity to match demand.

Which approach to capacity management would only be effective if the overall demand across all the products is relatively stable?

________ variability is change in demand that can be forecasted.

A firm can vary supply of product by controlling production capacity and inventory.

The use of a part-time workforce to increase the capacity flexibility by enabling the firm to have more people at work during peak periods is designing product flexibility into the production processes.

When planning,the goal of all firms in the supply chain should be to maximize supply chain profits because

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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