Q&A Hero

Q: Price lining refers to the systematic determination of the right price for a product or service. a. True b. False

Q: Golden Eagle Machine Works has the following demand requirements and other data for the upcoming four quarters. Quarter Demand Previous quarter's output 2500 units 1 2300 Beginning inventory 200 units 2 2400 Stockout (backorder) cost $50 per unit 3 2600 Inventory holding cost $10 per unit at end of quarter 4 2100 Hiring workers $4 per unit Laying off workers $8 per unit Unit cost $30 per unit What is the total cost of pursuing a chase aggregate plan over the coming year?

Q: Osprey Machine Works has the following demand requirements and other data for the upcoming four quarters. Quarter Demand Previous quarter's output 2500 units 1 2300 Beginning inventory 200 units 2 2400 Stockout (backorder) cost $50 per unit 3 2600 Inventory holding cost $10 per unit at end of quarter 4 2100 Hiring workers $4 per unit Laying off workers $8 per unit Unit cost $30 per unit Overtime $10 extra per unit What is the total cost of pursuing a level aggregate plan over the coming year?

Q: A trade credit bill of $80,000 with terms of sale of 2/10, net 30 means the buyer saves ____ if the bill is paid within the discount period. a. $0 b. $1,600 c. $2,500 d. $4,000

Q: Reddick's Specialty Electronics makes weatherproof surveillance systems for parking lots. Demand estimates for the next four quarters are 25, 9, 13, and 17 units. The firm is preparing an aggregate plan that uses inventory, regular time and overtime and back orders. Subcontracting is not allowed. Regular time capacity is 15 units for quarters 1 and 2, 18 units for quarters 3 and 4. Overtime capacity is 3 units per quarter. Regular time cost is $2000 per unit, while overtime cost is $3000 per unit. Back order cost is $300 per unit per quarter; inventory holding cost is $100 per unit per quarter. Beginning inventory is zero. The data inputs for this problem, and the optimal solution, generated by microcomputer software, appear below. Answer the following questions based on the scenario and the solution. a. How many total units will be produced in quarter 1 for delivery in quarter 1? b. How many units in total will be used to fill back orders over the four quarters? c. What is the cost to produce one unit in Quarter 4 using overtime to deliver in quarter 1 (filling a back order)? d. At the end of quarter 3, what is the ending inventory of finished systems? e. What is the total cost of the solution? f. What is the average cost per unit?

Q: Services are generally easier to price than products. a. True b. False

Q: Washington Laundry Products, Inc., makes commercial and industrial laundry machines (the kinds hotels use), and has these aggregate demand requirements for the next six months. The firm has regular capacity for 200 units, and overtime capacity for 40 more. Currently, subcontracting can supply up to 100 units per month, but the subcontracting firm may soon be unavailable. Month Demand Costs and other data 1 220 Previous output level 150 units 2 160 Beginning inventory 100 units 3 200 Stockout cost $250 per unit 4 210 Inventory holding cost $100 per unit at end of month 5 200 Unit Cost, regular time $1,200 per unit 6 190 Subcontracting $2,000 per unit Unit Cost, overtime $1,500 per unit Hiring workers $200 per unit Laying off workers $500 per unit Which is cheaper: to produce level, incurring back orders and inventory charges; or to produce a base quantity of 120, using first, overtime, then subcontracting, to meet demand?

Q: WalMart grants credit to consumers who purchase for personal or family use. This type of credit is called: a. trade credit. b. personal credit. c. open credit. d. consumer credit.

Q: A manufacturer of industrial seafood processing equipment wants you to develop an aggregate plan for the four quarters of the upcoming year using the following data on demand and capacity. Quarter Units Regular Time Over- time Sub- contract Initial inventory Regular time cost 250 units $1.25/unit 1 200 400 80 100 Overtime cost $1.50/unit 2 750 400 80 100 Subcontracting cost 2.00/unit 3 1200 800 160 100 Carrying cost $0.50/unit/quarter 4 450 400 80 100 No back ordering is allowed a. Find the optimal plan using the transportation method. b. What is the cost of the plan? c. Does any regular time capacity go unused? How much in what periods? d. What capacity went unused in this solution? (List in detail.)

Q: An important source of credit information is the customer's previous credit history. a. True b. False

Q: Osprey Fabrication has the following aggregate demand requirements and other data for the upcoming four quarters. Quarter Demand Previous quarter's output 1300 units 1 1400 Beginning inventory 0 units 2 1200 Stockout cost $50 per unit 3 1600 Inventory holding cost $10 per unit at end of quarter 4 1500 Hiring workers $40 per unit Laying off workers $80 per unit Subcontracting cost $60 per unit Unit cost $30 per unit Overtime $15 extra per unit Which of the following production plans is better: Plan Achase demand by hiring and layoffs; Plan Bpure level strategy, or Plan C1350 level with the remainder by subcontracting?

Q: In general, products that are consumed in fixed amounts have a. constant demand. b. elastic demand. c. inelastic demand. d. variable demand.

Q: Eagle Fabrication has the following aggregate demand requirements and other data for the upcoming four quarters. Quarter Demand Previous quarter's output 1500 units 1 1300 Beginning inventory 200 units 2 1400 Stockout cost $50 per unit 3 1500 Inventory holding cost $10 per unit at end of quarter 4 1300 Hiring workers $4 per unit Laying off workers $8 per unit Unit cost $30 per unit Overtime $10 extra per unit Which of the following production plans is better: Plan Achase demand by hiring and layoffs; or Plan Bproduce at a constant rate of 1200 and obtain the remainder from overtime?

Q: Collateral is generally required for open charge accounts. a. True b. False

Q: A business that has a gaming console intended to compete directly with Sonys Playstation gaming console would likely use a ____ pricing strategy. a. follow-the-leader b. penetration c. prestige d. variable

Q: Fairview Industries is preparing its aggregate plan for the second half of the year. The table below contains monthly demand estimates and working days per month. Complete the table by computing total demand, demand per day (for each month), and the average requirement (in units per day) over the six-month planning horizon. Prepare a graph of forecast demand and level production, by months, for the planning period. Label your graph carefully. Month Expected Demand Production Days Demand per Day July 18,000 20 August 21,000 23 September 17,500 21 October 12,500 21 November 12,000 20 December 13,500 21 TOTAL

Q: Every applicant is credit worthy to some degree. a. True b. False

Q: Describe the advantages and limitations of the transportation method for aggregate planning.

Q: When she uses her American Express card, Cathy obtains possession of goods or services when they are purchased. Payment is due when billed at a later date. American Express is a type of: a. installment account b. open charge account c. revolving account d. selective account

Q: List, in order, the five steps of the graphical method of aggregate planning. Is it possible that these steps can be properly followed and the solution properly implemented without using a graph? Explain.

Q: Credit cards are an alternative to cash. a. True b. False

Q: Describe the advantages and limitations of the graphical method of aggregate planning.

Q: Normally, the transportation model is used to solve problems involving several physical sources of product and several physical uses of the product, as in factories and warehouses. How is it possible to use the transportation model where the "routes" are from one time period to another? Describe how this provides aggregate planners with a usable mathematical model.

Q: A comprehensive break-even analysis entails a. examining revenue-cost relationships and establishing sales forecasts. b. analyzing marketing strategys effect on revenue and costs. c. the use of comparison pricing and contribution margins. d. approximating debits, credits, costs and sales.

Q: If a small business has products that compete with one another, pricing decisions must take into account the effects of a single product price on the rest of the line. a. True b. False

Q: Among the mathematical approaches to aggregate planning, ________ is good at working with inventories, holding costs, overtime, and subcontracting, but not with hiring and layoffs.

Q: ________ for developing aggregate plans work with a few variables at a time and are easy to understand and use.

Q: Sandra, after attending culinary school, has returned home to start a small French restaurant using sustainable, local items as well as foods and wines from France. What type of distribution would she have and who would belong at what level?

Q: Holley and Ellison are sisters whose parents started a stable 15 years ago boarding pleasure horses. The parents want the sisters to take over the operation as they would like to retire and the business is starting to suffer. What could the sisters do to move the company out of the decline stage of the product life cycle?

Q: A manager is applying the transportation model of linear programming to solve an aggregate planning problem. Demand in period 1 is 100 units, and in period 2, demand is 150 units. The manager has 125 hours of regular employment available for $10/hour each period. In addition, 50 hours of overtime are available for $15/hour each period. If holding costs are $2 per unit each period, how many hours of regular employment should be used in period 1? (Assume demand must be met in both periods 1 and 2 for the lowest possible cost and that production is 1 unit per hour.) A) 100 B) 125 C) 150 D) 50 E) none of the above

Q: Which of the following aggregate planning methods does not work if hiring and layoffs are possible? A) the linear decision rule B) simulation C) the management coefficients model D) the transportation method E) graphical methods

Q: Patricia has developed a new product that she would like to patent and produce. What can she do to reduce the risk of failure?

Q: How can a successfully growing firm fall into a growth trap?

Q: A firm uses graphical techniques in its aggregate planning efforts. Over the next twelve months (its intermediate period), it estimates the sum of demands to be 105,000 units. The firm has 250 production days per year. In January, which has 22 production days, demand is estimated to be 11,000 units. A graph of demand versus level production will show that: A) the January requirement is below level production of 420 units. B) level production is approximately 1000 units per day. C) level production of 420 units per day is below the January requirement. D) level production is approximately 420 units per month. E) the firm must hire workers between December and January.

Q: "An optimal plan for minimizing the cost of allocating capacity to meet demand over several planning periods" best describes which of the following? A) the linear decision rule B) simulation C) the management coefficients model D) the transportation method E) graphical methods

Q: Discuss the purposes of packaging, labeling and warranties in relation to a companys brand.

Q: Donnie owns a small tree farm known in the region for its maples. He has been approached about expanding. What supply chain issues would he face?

Q: A firm practices a pure chase strategy. Production last quarter was 1000. Demand over the next four quarters is estimated to be 900, 700, 1000, and 1000. Hiring cost is $20 per unit, and layoff cost is $5 per unit. Over the next year, what will be the sum of hiring and layoff costs? A) $500 B) $2,500 C) $7,500 D) $7,000 E) $12,500

Q: After listing the six categories of major product strategies, discuss the implications for a small business.

Q: The transportation method of linear programming is an optimizing approach to aggregate planning.

Q: How can intermediaries impact a companys supply chain?

Q: Graphical techniques are easy to understand and use, but are not well-suited for generating optimal strategies.

Q: Discuss the characteristic differences between marketing products versus services.

Q: What is a disadvantage common to the following two strategies: (1) varying inventory levels and (2) back ordering during periods of high demand?

Q: Ollie has developed a new product for radio that allows the listener to rewind and listen to songs or dialogue that was missed. The listener can then resume play in live mode, similar to a DVR product used on home TVs. Ollie knows his competitive advantage will dwindle over time as new technology emerges. What can he do to secure the future of his product and himself as an innovator?

Q: Most people would argue that a service firm must follow chase or mixed strategies. On the other hand, most state agencies, which are clearly service-oriented, are not at all able to "chase" demand. Discuss how they manipulate demand to allow the level strategy to be used.

Q: Josiah has developed an avalanche safety kit that includes a small but powerful locator beacon. When he developed and researched the idea, he found other kits on the market but his business analysis revealed a less expensive way of producing the kits. How should he proceed?

Q: If a service firm were to attempt level scheduling for aggregate planning, should its level of output be at average demand, peak demand, or minimum demand?

Q: The textbook illustrates demand management in the form of price cuts or discounts. Can demand manipulation for aggregate planning involve price increases? Explain; provide an example.

Q: Describe the differences between a brand, a logo, a trademark and a service mark. In what order would they be developed?

Q: How can a small business protect its marketing assets?

Q: Compare the chase strategy versus level scheduling.

Q: Will, Max and Isaac are brothers and owners of Wood Toys of Yesterday, a company specializing in handmade wood toys typical of the late 1800s. The business had been a part-time enterprise when a national magazine did an October cover story on the company and sales rose by 200% over their normal holiday increase. Make suggestions to them for the company to survive this rapid increase in growth especially considering the nature of their business and the timing of the increase.

Q: Explain the fundamental difference between the "capacity options" and the "demand options" of aggregate planning strategies.

Q: Marie is a songwriter who has a full catalogue of material she has been compiling as a hobby since 1985. Recently she was approached about someone recording her songs. To protect her rights to her songs, what does Marie need to do to secure her rights?

Q: Identify (a) the demand options for aggregate planning; and (b) the capacity (supply) options for aggregate planning.

Q: ________ maintains a constant output rate, or work force level, over the planning horizon.

Q: Discuss three considerations in constructing a channel of distribution.

Q: A brand that can be spoken

Q: The ________ strategy sets production equal to forecasted demand.

Q: A distribution system with one or more intermediaries

Q: Developing a mix of ________ products is a widely used demand smoothing technique.

Q: Elements of a firms distinctive image not protected by a trademark, patent, or copyright

Q: ________ is a capacity option that works especially well in the service sector where labor needs are relatively unskilled.

Q: A brand that cannot be spoken

Q: Which of the following actions is consistent with the use of level scheduling? A) use inventory to meet demand requirements B) use overtime to meet higher-than-average demand requirements C) vary production levels to meet demand requirements D) vary work force to meet demand requirements E) none of the above

Q: A firm uses the pure chase strategy of aggregate planning. It produced 1000 units in the last period. Demand in the next period is estimated at 800, and demand over the next six periods (its aggregate planning horizon) is estimated to average 900 units. Which of the following tactics would be most representative of following a chase strategy? A) add 100 units to inventory in the next period B) add 200 units to inventory in the next period C) hire workers to match the 100-unit difference D) lay off workers to match the 200-unit difference E) implement a lower price point to increase demand

Q: Registered protection for a new or improved process, machine, or product

Q: A verbal and/or symbolic means of identifying a product

Q: Which of the following is NOT an advantage of level scheduling? A) stable employment B) lower absenteeism C) matching production exactly with sales D) lower turnover E) more employee commitment

Q: A legal trerm indicating that a firm has exclusive rights to use a brand to promote a product

Q: Which of the following is consistent with a pure chase strategy? A) vary production levels to meet demand requirements B) vary work force to meet demand requirements C) vary production levels and work force to meet demand requirements D) little or no use of inventory to meet demand requirements E) All of the above are consistent with a pure chase strategy.

Q: Which of the following is NOT consistent with level scheduling? A) varying the use of subcontracting B) finding alternative work for employees during low-demand periods C) using built-up inventory to meet demand requirements D) varying production levels and/or work force to meet demand requirements E) All of the above are inconsistent with the pure level strategy.

Q: Registered protection for the appearance of a product and its inseparable parts

Q: A legal term indicating that a company has the exclusive right to use a brand to identify a service

Q: A distribution system without intermediaries

Q: In level scheduling, what is kept uniform from month to month? A) product mix B) inventory levels C) production/workforce levels D) demand levels E) sub-contracting levels

Q: The overall perception of a brand

Q: Which of the following statements regarding aggregate planning is TRUE? A) In a pure level strategy, production rates or work force levels are adjusted to match demand requirements over the planning horizon. B) A pure level strategy allows lower inventories when compared to pure chase and hybrid strategies. C) Mixed strategies in aggregate planning may utilize inventory, work force, and production rate changes over the planning horizon. D) Because service firms have no inventory, the pure chase strategy does not apply. E) A disadvantage of the option of changing inventory levels is that it forces abrupt production changes.

Q: A detailed picture of what happens to a specific products sales and profits over time Match the term with its definition. a. Brand b. Brand image c. Brand name d. Brandmark e. Design patent f. Direct channel g. Indirect channel h. Patent i. Service mark j. Trade dress k. Trademark l. Utility patent