Revenue and Operations Planning Strategies

Revenue and Operations Planning

58) The process of varying pricing at the right time for different customer segments to maximize revenue generated from existing supply capacity is called: D) revenue management.

59) An example of revenue management is: C) two passengers, sitting side-by-side in an airplane, charged different prices depending on [when they bought their tickets].

Sales and Operations Planning (S&OP)

60) Which one of the following statements about sales and operations planning is best? B) All functional areas should supply inputs for developing production and staffing plans.

61) Acme expected demand for rocket-powered roller skates to pick up during Roadrunner Season, so they built hundreds of extra pairs and stored them out of season. The excess production is: D) anticipation inventory.

62) The meaning of undertime is: B) employees don’t have enough productive work for the number of hours that they normally work.

63) The time that employees work that is longer than the regular workday or workweek for which they receive additional pay is: C) overtime.

Supply and Demand Options

64) Which one of the following statements concerning supply options is best? A) Subcontracting can help overcome short-term capacity shortages by offloading work on other producers.

65) Two basic types of decision alternatives are used to arrive at acceptable production or staffing plans: supply options and demand options. If an organization that faces seasonal demand uses a supply option approach, which one of the following actions is it most likely to implement? B) creating a stock of anticipation inventory

Planning Strategies

66) Which one of the following statements concerning sales and operations planning alternatives is best? D) Using overtime is an undesirable option when the overtime wage premium is high and sustained levels of top worker productivity are important.

67) Which one of the following conditions favors a level strategy for manufacturing firms? C) highly automated equipment and a make-to-stock strategy

68) Which one of the following statements regarding production and staffing plans is best? A) A producer of greeting cards for all occasions can use a level strategy to good advantage because of the complementary nature of the products.

69) Which one of the following statements about sales and operations planning is best? B) When a firm wants to emphasize stability in its workforce, it should adopt a level production-planning strategy.

70) Which one of the following conditions can make a level strategy the most attractive? B) Products complementary to the existing products can be produced easily with the given facilities.

71) Which one of the following actions applies to a level strategy? B) Build anticipation inventory to meet the variability in demand.

72) The sales and operations planning strategy to be used should be consistent with the business environment. Which one of the following pairs of business environment and strategy is consistent? B) low inventory holding cost; build anticipation inventory.

Costs and Constraints

73) Which one of the following statements about costs of sales and operations plans is best? D) Hiring costs include the costs of advertising jobs, interviews, training programs for new employees, and initial paperwork.

74) Which of these sales and operations planning levers is associated with interviews, training, and severance pay? B) hiring and layoffs

75) Backorders and stockouts are most likely to cause expenses for: D) lost sales.

76) Which of the following is the best example of a physical constraint on the sales and operations plan? A) inventory storage space

77) Use the information in Table 15.1. According to the production plan, what will be the total ending inventory in the second month after the second month’s demand is satisfied? A) -21 units

78) Use the information in Table 15.1. If the firm is committed to the regular production and overtime production as shown, what level of anticipation inventory would be needed at the start of the first month to result in an ending [inventory of zero]? C) 18 units to 25 units

79) Use the information in Table 15.1. According to the production plan, what is the unused overtime capacity in the fourth period? D) 12