Operations and Supply Chain Management The Core

SALES AND OPERATIONS PLANNING chapter 8 257
SUMMARY
EXCESS
STRAIGHT
INVEN-
TOTAL
PLAN DESCRIPTION HIRING LAYOFF SUBCONTRACT
TIME
SHORTAGE
TORY
COST
1. Exact production;
vary workforce $700 $100 $202,500 $203,300
2. Constant
workforce; vary
inventory and
shortages $125,000 $75,600 $1,400 $202,000
3. Constant
workforce;
subcontract $155,000 $125,000 $280,000
DISCUSSION QUESTIONS
LO8–1
LO8–2
LO8–3
1. What are the basic controllable variables of a production planning problem? What
are the four major costs?
2. Distinguish between pure and mixed strategies in production planning.
3. What are the major differences between aggregate planning in manufacturing and
aggregate planning in services?
4. How does forecast accuracy relate, in general, to the practical application of the
aggregate planning models discussed in the chapter?
5. In what way does the time horizon chosen for an aggregate plan determine
whether it is the best plan for the firm?
6. Define yield management. How does it differ from the pure strategies in
production planning?
7. How would you apply yield management concepts to a barbershop? A soft drink
vending machine?
OBJECTIVE QUESTIONS
LO8–1
1. Major operations and supply planning activities can be grouped into categories
based on the relevant time range of the activity. Into what time range category
does sales and operations planning fit?
2. What category of planning covers a period from a day to six months, with daily or
weekly time increments?
3. In the agriculture industry, migrant workers are commonly employed to pick
crops ready for harvest. They are hired as needed and are laid off once the crops
are picked. The realities of the industry make this approach necessary. Which
production planning strategy best describes this approach?