Chapter 13 Terms

Question 1

Sales and operations planning

Answer 1

a process to develop tactical plans by integrating customer-focused marketing plans for new and existing products with the operational management of the supply chain

Question 2

Benefits of S&OP

Answer 2

improved forecast accuracy
high customer service with lower finished goods inventory
more stable supply rates, higher productivity
faster and more controlled new product introduction

Question 3

Inventory holding costs

Answer 3

maintaining inventory involves a number of expenses related to the cost of capital invested in inventory, insurance, storage and taxes

Question 4

Regular production costs

Answer 4

average labor cost to produce an aggregate unit and any benefits included

Question 5

Overtime cost

Answer 5

may be scheduled for the labor force to gain additional output

Question 6

Hiring cost

Answer 6

cost of advertising for new workers, interviewing, processing their applications and training them

Question 7

Firing/layoff cost

Answer 7

separation costs

Question 8

Backorder/lost sales cost

Answer 8

penalty for backordering and direct loss for lost sales

Question 9

Subcontracting cost

Answer 9

outsourcing production cost

Question 10

Level production strategy

Answer 10

the firm produces at a constant rate over the year (build inventory in low demand periods deplete inventory in high demand periods)

Question 11

Chase strategy

Answer 11

production rate is changed in each period to match the amount of expected demand (used by firms that have high per-unit inventory holding cost rates)