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Exam 14: Sales and Operations Planning

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Question 61

Multiple Choice

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A bagel company bakes a specialty bagel that it sells by the dozen every day. These specialty bagels can only be baked early in the morning before the store opens for business. The company estimates that the daily demand (in dozens) for its specialty bagel is distributed as follows: Specialty bagels are sold by the dozen only at a cost of $9.00 per dozen. The cost to bake each bagel is $0.50. Leftover specialty bagels are sold by the dozen the next day for a 50% discount. The bagel company's cost of underestimating demand, C_u, is

A) $9.00.
B) $6.00.
C) $4.50.
D) $3.00.

E) A) and B)
F) All of the above

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Question 62

Multiple Choice

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The following information relates to a company's aggregate production planning activities: Beginning Workforce = 50 workers Production per Employee = 250 units per quarter Hiring Cost = $1000 per worker Firing Cost = $1,500 per worker Inventory Carrying Cost = $15 per unit per quarter If a level production strategy is used then the number of workers required is

A) 125.
B) 170.
C) 250.
D) 325.

E) All of the above
F) B) and D)

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Question 63

Multiple Choice

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For a less than or equal to (≤) constraint, the shadow price represents the

The primary cost associated with the level production strategy is the cost of

The transportation method is used for aggregate planning when the strategy for adjusting capacity is hiring and firing workers.

The following information relates to a company's aggregate production planning activities: Beginning Workforce = 35 workers Production per Employee = 1,250 units per quarter Hiring Cost = $500 per worker Firing Cost = $1,000 per worker Inventory Carrying Cost = $20 per unit per quarter If a level production strategy is used then the cost of the level production plan (inventory costs plus hiring and firing costs) is

Linear programming problems with two decision variables can be solved graphically.

Sharing information and synchronizing production across the supply chain is known as disaggregation.

Yield management can be used to address all of the following problems except

The following information relates to a company's aggregate production planning activities: Beginning Workforce = 125 workers Production per Employee = 500 units per quarter Hiring Cost = $750 per worker Firing Cost = $1,500 per worker Inventory Carrying Cost = $10 per unit per quarter If a chase demand strategy is used the number of workers fired in quarter 3 is

Linear programming is a mathematical modelling technique based on linear relationships.

The following information relates to a company's aggregate production planning activities: Beginning Workforce = 50 workers Production per Employee = 250 units per quarter Hiring Cost = $1000 per worker Firing Cost = $1,500 per worker Inventory Carrying Cost = $15 per unit per quarter If a chase demand strategy is used then the total hiring and firing cost of the plan is

The area that contains the values that satisfies all the constraints in a linear programming problem is known as the ___ space.

An aggregate operations plan specifies the production quantities for an entire product family or product line.

A company is developing a linear programming model for its aggregate production plan. Each worker can produce 500 units per quarter. If W_t = workforce size in period t and P_t = number of units produced in period t, then the production constraint for period 3 is

Overtime and undertime are common strategies for adjusting demand.

While all linear programming problems have a single objective function, very few, if any, have constraints.

In general, the objective function for linear programming problems in operations is one of minimizing costs.

The constraints in a linear programming formulation define the feasible solution space.

A mixed strategy for adjusting capacity is simpler and easier to implement than any pure strategy.