CHAPTER-13 : Discussion Questions
1. Define sales and operations planning.
It is the manner of matching assets and forecasted demand, arranging an organization’s competing demands from supply chain to final customer, and simultaneously connecting strategic planning with over all planning horizons.
2. Why are S&OP teams typically cross-functional?
S&OP teams are typically cross-functional because all the resources – internal and external – must be integrated for an efficient aggregate plan.
It is a method to determine the amount and timing of production for the intermediate future (3 to 18 months ahead).
4. Explain what the term aggregate in “aggregate planning” means.
Aggregate, when used in planning, suggests that planning is completed to make a single overall amount of output.
5. List the strategic objectives of aggregate planning. Which one of these is most often addressed by the quantitative techniques of aggregate planning? Which one of these is generally the most important?
- Minimize cost over the planning period
- Smooth fluctuations in work force
- Drive down inventory levels for time-sensitive stock
- Meet a high level of service regardless of cost
The objective that is usually addressed by the quantitative techniques of aggregate planning and is generally the most important is cost minimization.
6. Define chase strategy.
It is a planning strategy that equilibrates production and forecast demand.
7. What is level scheduling? What is the basic philosophy underlying it?
Level scheduling is an aggregate plan that sustains constant output rate, production rate, or workforce level over the planning horizon and works better when demand is stable. The basic philosophy underlying it is that stable employment can lead to more committed employees and better quality of output.
8. Define mixed strategy. Why would a firm use a mixed strategy instead of a simple pure strategy?
Mixed strategy exploits two or more controllable variables to set a viable production plan. A firm would use this strategy because there is a chance for each strategy, unlike a simple pure strategy which is predictable.
9. What are the advantages and disadvantages of varying the size of the workforce to meet demand requirements each period?
Advantages:
- One can avoid the costs that come with alternatives such as subcontracting
- One has a fundamental ability to change production capacity in relatively small and precise increments.
Disadvantages
- Newly hired personnel must be trained.
- Layoffs undermine the morale of all employees which can lead to a widespread decrease in overall productivity.
- Ready supply of skilled labor is not always available.
10. How does aggregate planning in service differ from aggregate planning in manufacturing?
They differ in the following ways:
- Services are more customized than manufactured goods and can be offered in many different forms. This variability makes it difficult to allocate capacity. Units of capacity may also be hard to define.
- Because most services cannot be transported, service capacity must be available at the appropriate place as well as at the appropriate time.
- Service capacity is generally altered by changes in labor, rather than by equipment or space, and labor is a highly flexible resource.
11. What is the relationship between the aggregate plan and the master production schedule?
A plan’s capacity is balanced with demand by the aggregate plan and the master production schedule converts the plan into quantities of specific products in time frames.
12. Why are graphical aggregate planning methods useful?
Since they are trial-and-error approaches, they only need a few variables at a time for planners to relate expected demand with existing capacity.
13. What are major limitations of using the transportation method for aggregate planning?
Transportation method is only limited to positive factors such as holding inventories, using overtime, and subcontracting.
14. How does revenue management impact an aggregate plan?
An aggregate plan is affected by revenue management in a way that it shifts the focus from capacity management to demand management.