Q&A Hero

Q: Which of the following is NOT an input to S&OP? A) capacity decisions B) supply-chain support C) workforce D) inventory on hand E) master production schedule

Q: Beverly is systematically comparing various cost and revenue estimates in order to determine the acceptability of alternative prices. Beverly is using: a. break-even analysis b. price lining c. cost functioning d. demand functioning

Q: What is the effort to plan the coordination of demand forecasts with functional areas of the firm and its supply chain? A) enterprise resource planning B) material requirements planning C) capacity planning D) sales and operations planning E) new product development

Q: Demand that does not change significantly where there is a change in the price of a product or service

Q: Which of the following is NOT one of the four things needed for aggregate planning? A) a logical overall unit for measuring sales and output B) a method to determine the relevant costs C) a mathematical model that will minimize costs over the intermediate planning period D) an aggregate demand forecast for an intermediate planning period E) All of these are needed for aggregate planning.

Q: Commissions paid to a salesperson would be included in a. cost of goods sold. b. human resources. c. overhead costs. d. administrative costs.

Q: A categorization of accounts receivable based on the length of time they have been outstanding

Q: Which of the following is the term used for intermediate-range capacity planning with a time horizon of three to eighteen months? A) material requirements planning B) enterprise resource planning C) strategic planning D) aggregate planning E) job scheduling

Q: Which type of organization is a good source of consumer credit information? a. Trade-credit agencies b. Third-party reports c. The Federal Credit Reporting Agency d. Credit bureaus

Q: What is the typical time horizon for aggregate planning? A) less than a month B) up to 3 months C) 3 to 18 months D) over one year E) over 5 years

Q: The degree to which a change in price affects the quantity demanded

Q: One of the four things needed for aggregate planning is a logical overall unit for measuring sales and output.

Q: Retro Hits, a local band covering songs from the 1980s and 1990s, decided they wanted to expand to more college students. Research showed students thought the current $25 ticket price was too high for a local band. To strengthen ticket demand, Retro Hits began offering $15 tickets to all fans who checked in on Facebook. The band was using a a. variable pricing strategy. b. price lining strategy. c. skimming pricing strategy. d. freemium pricing strategy.

Q: Aggregate planning in manufacturing ties organizational strategic goals to a production plan.

Q: Sales volume at which total sales revenue equals total costs and expenses

Q: Aggregate planning occurs over the medium or intermediate future of 3 to 18 months.

Q: Handyman Hardware, a small community-based store, offers its consumers the option of using credit. Creditworthy individuals are able to use the "HH Credit Card" for all purchases up to a credit limit of $1,000. Consumers are required to pay at least 20 percent of their outstanding balance at the end of each month. A 2 percent finance charge is assessed on the unpaid balance at the end of each billing cycle. Handyman Hardware is employing ____ in its business. a. open charge accounts b. installment accounts c. revolving charge accounts d. selective accounts

Q: Which of the following would most likely fall under the scope of only an operations manager? A) research and development B) new product plans C) capital investments D) facility location/capacity E) setting inventory levels

Q: Demand that changes significantly when there is a change in the price of a product or service

Q: Top executives tend to focus their attention on which type of forecasts? A) short-range B) intermediate-range C) long-range D) weather E) the forecast for the next day's absentee levels

Q: Credit cards are usually based on a(n) ____ account system. a. installment b. open charge c. revolving d. a selective

Q: Under which of the following do planning tasks associated with production planning and budgeting, as well as setting employment, inventory, and subcontracting levels, typically fall? A) short-range plans B) intermediate-range plans C) long-range plans D) demand options E) strategic planning

Q: The ratio of bad debts to credit sales

Q: Under which of the following do planning tasks associated with job assignments, ordering, job scheduling, and dispatching typically fall? A) short-range plans B) intermediate-range plans C) long-range plans D) mission-related planning E) strategic planning

Q: Which option is designed for long-term credit? a. Credit cards b. Installment accounts c. Open charge accounts d. Revolving charge accounts

Q: Frito-Lay uses aggregate planning to match capacity with demand because of the ________ associated with its specialized processes. A) high variable cost and high fixed cost B) high variable cost and low fixed cost C) low variable cost and high fixed cost D) low variable cost and low fixed cost E) none of the above

Q: Quality Cars, an independent used-car dealership, utilizes long-term consumer credit in its business. Typically, consumers are allowed to place a 15 percent down payment on an automobile. Then, over a period of 48 months, the consumer is allowed to make payments on the balance of the account, which includes compound interest of 2 percent monthly on the unpaid portion. Quality Cars is employing ____ in its business. a. open charge accounts b. installment accounts c. revolving accounts d. selective accounts

Q: The difference between the unit selling price and the unit variable costs and expenses

Q: The aggregate planning process usually includes dispatching of individual jobs.

Q: Plans for new product development generally fall within the scope of aggregate planning.

Q: The total sales revenue of a small business is a direct reflection of a. sales volume and credit terms. b. price and credit terms. c. price and expenses. d. sales volume and price.

Q: An alternative to cash whose use provides assurance to a seller that a buyer has a satisfactory credit rating and that payment will be received from the issuing financial institution Match the term with its definition. Some terms may not be used. a. Aging schedule b. Average pricing c. Bad-debt ratio d. Break-even analysis e. Break-even point f. Contribution margin g. Elastic demand h. Elasticity of demand i. Inelastic demand j. Value

Q: A professional services firm is investigating revenue management as a means of taking advantage of unused capacity. Analysts for this firm estimate a demand curve for the firm's service, which is sold by the hour. Points on this demand curve include 9000 hours at the current rate of $60 per hour, 9500 hours at $55, 10,000 hours at $50, and 10,500 hours at $45. Based on this demand curve, what price point would be best for the firm, if its objective is maximum revenue?

Q: The Golf Global Company sells 1,000 shirts annually at a price of $35 each. If the company's pricing policies adhere to a 40% markup of selling price, the cost of each shirt is a. $14. b. $21. c. $28. d. $32.

Q: A small private university normally charges the same price $200per credit-hour for all courses and for all students. While the university is pretty near capacity in the fall and spring, it finds that its classrooms are only about 60 percent occupied during the summer session. A student of operations management wonders if revenue management might be useful to both the university and its students alike. This student, with help from some economics majors, estimates a demand curve for summer course enrollment. Points on this demand curve include 9000 credit-hours at the current rate of $200, 12,000 credit hours at $180, 15,000 credit-hours at $160, and 18,000 credit-hours at $140. Based on this demand curve, what price point would best serve the university, if its objective is the greatest revenue for the summer session?

Q: The extent to which a good or service is perceived by a customer as meeting his or her needs or wants, measured by the customers willingness to pay for it

Q: To make revenue management work, the company needs to manage what three issues?

Q: A business will not be successful unless it charges a price for its products that covers its total a. cost and a margin of profit. b. cost of goods and selling cost. c. fixed cost and overhead cost. d. variable cost and cost of goods.

Q: Identify the five conditions that make revenue management of interest.

Q: Financing provided by suppliers to client companies

Q: What is the primary management challenge when implementing revenue management?

Q: With a skimming price strategy, prices are set lower than what will be the normal, long-range price to gain more market share. a. True b. False Indicate the answer choice that best completes the statement or answers the question.

Q: ________ involves capacity decisions that determine the allocation of resources to maximize revenue or yield.

Q: A line of credit that requires a down payment, with the balance paid over a specified period of time

Q: A hotel room that goes unrented, a dental appointment that no patient booked, and an airline seat that went unsold, are all examples of ________ in services.

Q: Bank credit cards are widely accepted by retailers who desire to offer credit but do not have their own credit cards. a. True b. False

Q: To use revenue management strategies, a business should have which combination of costs? A) high variable and high fixed B) low variable and high fixed C) high variable and low fixed D) low variable and low fixed E) either A or B

Q: Privately owned organizations that summarize a number of firms credit experiences with particular individuals

Q: Industries in which revenue management techniques are easiest to apply are those where: A) use tends to be predictable, and pricing tends to be fixed. B) use tends to be predictable, and pricing tends to be variable. C) use tends to be uncertain, and pricing tends to be fixed. D) use tends to be uncertain, and pricing tends to be variable. E) All of the above, i.e., there is no difference.

Q: Revenue (or yield) management is best described as: A) a situation where management yields to labor demands. B) a situation where the labor union yields to management demands. C) a process designed to increase the rate of output. D) allocation of scarce resources to customers at prices that will maximize revenue. E) management's selection of a product mix yielding maximum profits.

Q: Marketing expenses, factory equipment costs, and salaries of office personnel are considered variable costs. a. True b. False

Q: A line of credit on which the customer may charge purchase at any time, up to a pre-established limit

Q: Revenue management is MOST likely to be used in which one of the following situations? A) a fast food restaurant with wide demand fluctuations during the day B) a dental clinic that wants to fill its appointment book C) a firm with a good counterseasonal product mix D) a shipping company that can change its fleet size easily E) an airline attempting to fill "perishable" seats at maximum revenue

Q: One of the benefits of extending credit to borrowers is that doing so provides better records of purchases on credit billing statements. a. True b. False

Q: Which of the following characteristics makes revenue management UNATTRACTIVE to organizations that have perishable inventory? A) demand can be segmented B) service can be sold in advance of consumption C) capacity is easily changed D) variable costs are low and fixed costs are high E) demand fluctuates

Q: Privately owned organizations that collect credit information on businesses

Q: A hotel room that goes unrented and an airline seat that goes unsold are both examples of perishable inventory in services.

Q: A penetration price strategy is most practical when there is a low threat of short-term competition in the market or when startup costs must be recovered rapidly. a. True b. False

Q: A large consulting firm is deciding on if its workforce should be expanded, maintained, or decreased. Suppose that demand is given in week-long projects, and that a consultant can work on 3 projects each month (1 week off for personal leave and/or other duties such as conferences, etc). Currently there are 25 consultants. Ten consultants are trained for LEAN and 15 for Six Sigma, with 5 of those consultants being overlaps (the consultant is trained for BOTH LEAN and Six Sigma). Assume that all consultants can do the general work. Complete the table (the forecast period is an upcoming month) and prepare a recommendation. Category Best Forecast (# projects) Likely Forecast (# projects) Worst Forecast (# projects) Max Demand in # of people Number of Qualified People LEAN 42 24 12 Six Sigma 45 36 30 General 75 60 57

Q: An agreement between a buyer and a seller that allows for delayed payment for a product or service

Q: What are successful techniques of controlling the cost of labor involved in service firms?

Q: A revolving charge account would be typical for larger purchases; smaller purchases are typical on installment accounts. a. True b. False

Q: Aggregate planning for service firms that provide intangible output deals mainly with: A) smoothing the production rate and finding the optimal size of the workforce. B) capital investment decisions. C) centralized purchasing. D) centralized production. E) planning for human resource requirements and managing demand.

Q: A line of credit that allows the customer to obtain a product or service at the time of purchase, with the payment due when billed

Q: Which of the following statements regarding aggregate planning in services is FALSE? A) Approaches to aggregate planning differ by the type of service provided. B) Some service organizations conduct aggregate planning in exactly the same way as manufacturing firms, but with demand management taking a more active role. C) Aggregate planning in some service industries may be easier than in manufacturing. D) Labor is the primary aggregate planning vehicle. E) Level scheduling is far more common than using a chase strategy.

Q: An installment account is a typical trade credit agreement. a. True b. False

Q: Which of the following is NOT one of the successful techniques for controlling the cost of labor in services? A) accurate scheduling of labor-hours to assure quick response to customer demand B) an on-call labor resource that can be added or deleted to meet unexpected demand C) little flexibility in worker hours to decrease the burden on management D) flexibility of individual worker skills that permits reallocation of available labor E) flexibility in rate of output or hours of work to meet changing demand

Q: Financing granted by retailers to individuals who purchase for personal or family use

Q: Aggregate planning for fast food restaurants is very similar to aggregate planning in manufacturing, but with much smaller units of time.

Q: Setting a price for a product or sercvice is as much art as science. a. True b. False

Q: Techniques for controlling the cost of labor in services include accurate scheduling of labor hours to assure quick response to customer demand, on-call labor for unexpected demand, flexibility of labor skills for reallocation of available labor, and flexibility in rate of output or hours of work to meet changing demand.

Q: A primary purpose of the federal Consumer Credit Protection Act is to a. require creditors to specify how finance charges are computed. b. grant certain rights to credit applicants regarding credit reports. c. inform consumers about all forms of credit available to them. d. specify what information a customer's employer can release about him/her. Match the term with its definition. Some terms may not be used. a. Consumer credit b. Credit bureaus c. Credit card d. Credit e. Installment account f. Open charge account g. Revolving charge account h. Trade credit i. Trade credit agencies j. Value

Q: American Express and Diners Club are examples of entertainment credit cards. a. True b. False

Q: Byron's Manufacturing makes tables. Demand for the next four months and capacities of the plant are shown in the table below. Unit cost on regular time is $40. Overtime cost is 150% of regular time cost. Subcontracting is available in substantial quantity at $75 per unit. Holding costs are $5 per table per month; back orders cost the firm $10 per unit per month. Byron's management believes that the transportation algorithm can be used to optimize this scheduling problem. The firm has 50 units of beginning inventory and anticipates no ending inventory. March April May June Demand 400 600 600 700 Regular capacity 400 400 400 400 Overtime capacity 100 100 100 100 Subcontract cap. 150 50 50 50 Answer the following questions based on the data table and solution table shown below. a. How many units will be produced on regular time in June? b. How many units will be produced by subcontracting over the four-month period? c. What will be the inventory at the end of April? d. What will be total production from all sources in April? e. What will be the total cost of the optimum solution? f. Does the firm utilize the expensive options of subcontracting and back ordering? When; why?

Q: Hollywood Amusement, a small independent movie theater, decreased the price of admission from $10 to $9. Prior to the price decrease, the business sold 1,000 tickets each month. After the price decrease, it experienced ticket sales of 1,500 a month. If the change in sales is attributable only to the change in price, Hollywood Amusement faces ____ for its movie tickets. a. elastic demand b. constant demand c. inelastic demand d. variable demand

Q: Fred's Fabrication has the following aggregate demand requirements and other data for the upcoming four quarters. Quarter Demand Previous quarter's output 800 units 1 700 Beginning inventory 0 units 2 900 Stockout cost $100 per unit 3 1200 Inventory holding cost $10 per unit at end of quarter 4 600 Hiring workers $20 per unit Laying off workers $40 per unit Subcontracting cost $200 per unit Unit cost $100 per unit Which of the following production plans is better: Plan Achase demand by hiring and layoffs; Plan Bpure level strategy, or Plan C700 level with the remainder by subcontracting?

Q: The best pricing practice is to undercut competitors prices. a. True b. False

Q: Houma Containers, Inc., makes industrial fiberglass tanks that are used on offshore oil platforms. Demand for the next four months and capacities of the plant are shown in the table below. Unit cost on regular time is $400. Overtime cost is 150% of regular time cost. Subcontracting is available in substantial quantity but at a very high cost, $1100 per unit. Holding costs are $200 per tank per month; back orders cost the firm $1000 per unit per month. Houma's management believes that the transportation algorithm can be used to optimize this scheduling problem. The firm has no beginning inventory and anticipates no ending inventory. March April May June Demand 300 500 300 350 Regular capacity 200 200 250 250 Overtime capacity 50 50 50 50 Subcontract cap. 150 100 100 150 Answer the following questions based on the data table and solution table shown below. a. How many units will be produced on regular time in June? b. How many units will be produced by subcontracting over the four-month period? c. What will be the inventory at the end of April? d. What will be total production from all sources in April? e. What will be the total cost of the optimum solution? f. Does the firm utilize the expensive options of subcontracting and back ordering? When; why?

Q: Chocolate Concoctions, a maker of high end chocolate candies, decided to price its boxes of candies below the long-term market price. The decision was made to increase market share and discourage other firms from entering the chocolate market. Chocolate Concoctions was implementing a a. penetration pricing strategy. b. price lining strategy. c. skimming price strategy. d. variable pricing strategy.

Q: An electronics manufacturer makes video security systems for parking lots. Demand estimates for the next four quarters are 15, 9, 23, and 17 units. The company is preparing an aggregate plan that uses inventory, regular time, overtime, and back orders. Subcontracting is not allowed. Regular time capacity is 12 units for quarters 1 and 2, 15 units for quarters 3 and 4. Overtime capacity is 6 units per quarter. Regular time cost is $20,000 per system, while overtime cost is $30,000 per unit. Back order cost is $2000 per system per quarter; inventory holding cost is $500 per unit per quarter. Beginning inventory is zero. Complete the table of data inputs for solving this aggregate planning problem with the transportation method. Specifically, how many sources are there, and how many destinations? What is the supply from each source, and the demand of each destination? What is the cost of each source-destination pair?