Chapter 13

Question 1

17. Within the context of the planning cycle, the planning that takes place at the highest levels of the firm is called:

Answer 1

a. strategic planning.

Question 2

18. Planning numbers are somewhat aggregated (month by month) in:

Answer 2

c. tactical planning.

Question 3

19. There are few, if any, options for adjusting capacity levels for managers involved in:

Answer 3

d. detailed planning and control.

Question 4

20. Sales and operations planning must consider:

Answer 4

d. All of these must be considered when performing S&OP.

Question 5

21. Seventy percent of a house painter’s business is exterior work and the other thirty percent is interior. The average exterior paint job takes 20 hours of labor and $400 of paint and primer, but the average interior job takes only 6 hours of labor and $75 of paint and primer. If he gets 20 service calls for the coming month, which of the following resource requirements is correct?

Answer 5

c. The painter has supply costs of $6050 for next month.

Question 6

22. Forty percent of a house painter’s business is exterior work and the other sixty percent is interior. The average exterior paint job takes 30 hours of labor and $500 of paint and primer, but the average interior job takes only 6 hours of labor and $80 of paint and primer. If he gets 25 service calls for the coming month and 30 calls for the month after that, which of the following resource requirements is correct?

Answer 6

d. The painter has a labor demand of greater than 850 hours but less than 900 hours for the next two months.

Question 7

23. This graph of expected sales level and expected output shows:

Answer 7

b. a level production plan is being used.

Question 8

24.	A company has a sales forecast for the following five months as shown in the table. If they have a beginning inventory of 100 units, what amount should be produced under a level plan in order for them to have an ending inventory of zero units at the end of the five month period?
Month	Forecast
January	350
February	400
March	300
April	500
May	350

Answer 8

b. 360 units per month

Question 9

25. What is the ending inventory level for April in the production plan shown in the table? All entries in the table are in terms of sales units.
    Month Forecast Regular Production Overtime Production Ending Inventory
    January 250 250 0 0
    February 200 300 0
    March 300 325 25
    April 500 400 25

Answer 9

d. 75 units

Question 10

26.	It costs $10 to make a single unit using regular production and $15 to make a single unit using overtime production. Finished units sell for $17 and are built to order. The manufacturing plant has a regular production capacity of 250 units per month and no inventory at the start of the planning period. What is the best net cash flow for the entire planning period if the manufacturer uses a chase plan?
Month	Forecast
January	250
February	200
March	300
April	400

Answer 10

b. $7050

Question 11

27. An organization has developed three alternate sales and operations plans for the coming six months and now must choose between them. They should consider:

Answer 11

d. All of these are admirable criteria for a sales and operation plan.

Question 12

28. The Super Bowl is right around the corner and Gowgem Hotels is aquiver with anticipation. They’d like to price their rooms at their three city locations, next to the stadium, near the airport, and in the suburbs, as high as possible but still achieve 100% occupancy. The approach they should take to this opportunity is:

Answer 12

a. yield management.

Question 13

29. 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:

Answer 13

b. the strategy of offloading.

Question 14

30. 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?

Answer 14

d. None of these statements will help plan production using optimization modeling.