chen/666739be-ebf0-42d0 ad17-99cb009ass.. K Chat Alibrahim Spring docx ^ Chapter 11 probl...docx ^ 11 In a highly disciplined execution of SOP, what is manufacturing's responsibility with regard to execution of the production plan? (HINT: you can answer this with one sentence.) ENG 12 What is the purpose of the "force-down" part of the pyramid forecasting method? BANG & OLUR DU UD 13 You operate in a MTS environment. The forecast for one of your SKUS is 250 units per week with a standard deviation of demand of 15 units per week. Safety stock has been calculated based upon a probability of not stocking out of 92%. Over the past two years, the forecast and standard deviation have been with +/- 10% of the current figures. You have about 200 customers that regularly order this item. Individual orders from customers are typically in the range of 1-20 with an average order size of 10. Customer orders are normally shipped within 24 hours of receipt. The number reasonably constant. of orders that you receive each day. Manufacturing lead time (to restock your finished goods inventory) is one week, and your order quantity is 500. Your most recent manufacturing order quantity of 500 arrived yesterday; your current inventory position is 530. You operate five days per week. Today, a single order comes in for 40 units, from an existing customer, along with the usual assortment of daily orders. In the context of our discussions of demand management, would you want your order entry system to process this order just like any other order? Briefly explain your reasoning. pg up 3 3. 3. 35 3. SOP problem (80 points) For this problem, today's date is Friday, March 5, 2021. You were just promoted to Director of Sales and Operations Planning for Trapper Lawn Care Equipment Company last Monday (congratulations!). Your company's products are sold to both homeowners and lawn care businesses. (Remember that lawn care equipment is classified as "durable goods"; business customers treat these purchases as capital investments.) The company's fiscal year is December 1" through November 30 (of the following year). Your predecessor took another job in December shortly after the annual plan was approved. (These numbers appearon the "Plan" lines in the work sheet.) a. (15 points) Since your predecessor left, the monthly SOP planning meetings have not been held. During this time, production has operated in line with the annual plan. Given the following actual sales and production numbers for December, January, February, fill in these numbers on the work sheet and calculate the sales and production monthly and YTD differences, and the actual end of month inventories (yellow shaded cells in the spreadsheet). Inventory as of Nov. 30, 2019 is 300. f PHONE FOR Reviews Cideos atures PCS Dort December Sales Production 460 415 January 340 February 420 390 405 b. (45 points) You have been asked to restart the monthly SOP meetings. An executive SOP meeting is to be held on March 13. At this meeting, you are to present revised monthly plan numbers for production and inventory for the remainder of this fiscal year. Production and inventory guidelines are: -Month-to-month changes in production are limited to plus or minus exactly 100 units (in other words, from one month to the next you can go +100 or no change or -100, nothing in between). -The planned production number for March cannot be changed; you are too far into the month of March to make any changes to March production. The first change you can make is to April production. Remember that changes to the production level relative to the prior month and not relative to the original plan. (For example, the revised production for May will be relative to the revised production that you entered for April and NOT relative to the original planned production for May.) -End-of-month inventory targets are a minimum of one-half of the next month's sales to a maximum equal to the next month's sales. Stay within these limits as much as possible. These numbers have already been entered in the spreadsheet. -The current (Mar. 1) statistical forecasts (shaded gray line) will be used for calculating end of month inventory for March through November. These will be automatically calculated by the spreadsheet so that you can concentrate on the revised production plan. -Your November, '21 production and inventory levels should leave you in a good position to respond to the normal, seasonal pattern of demand for 2022, which is expected to be about the same as for 2021. -You will enter your revised production plan in the light orange cells. The resulting inventory will appear in the light green cells. c. (20 points) You have just received the following information: 7 What is the single, most important factor that will spell success or failure in a company's attempt to implement an effective Sales and Operations Planning process? (HINT: This same factor spells success or failure for any major policy initiative in OSCM or any other functional area.) 8 Resource Planning is conducted in conjunction with the development of the SOP. What is its purpose? (Be fairly specific about this.) SK 92% Over 10% of the cur ures You 9 At the customer order decoupling point (aka order penetration point), demand shifts and vento demand. between at of the 10 SOP and Master Production Scheduling are used to manage the mix of products to be made and total production volume. Which manages mix and which volume? fn Short answer questions (10 points each). You will answer a total of six questions. You must answer the next three questions. 1 With regard to safety stock, briefly explain/define both the "probability of stock out" criterion and the "service level" criterion. (You should be able to do this with one sentence for each criterion.) MARTPHONE FOI Reviews Videos Features Specs Support 2 Complete the following sentence. Demand management is concerned with identifying all sources of manufacturing capacity. for 3 An order for 600 units comes in on Wednesday, Oct. 30, with the expectation of immediate shipment. For this particular product, the order size and shipment expectation is quite normal for orders of this product; in other words, there is nothing unusual about this order. You are able to ship 300 units immediately, but the remaining units will not ship until next month (specifically, Friday, Nov. 1, which is when the next delivery from your supplier will arrive). You maintain demand history and forecasts on a monthly basis. In which month would you want this order to appear in your demand history? Briefly explain your reasoning. Sunded d DODC -Current statistical forecasts (shown on the work sheet). -Month-to-date sales as of Mar. 5th are 30 units. -Industry publications indicate that sales, industry wide, have been on the weak side, although individual company results are mixed. A few companies report good sales while others report very weak sales. Senior management has directed the Director of Marketing to develop a new sales promotion plan to recoup the lost sales. If successful, the Director of Marketing estimates that the following sales will result: March: 220 April: 250 May: 350 June: 450 Then the original sales plan numbers for the rest of the fiscal year. In light of the current statistical forecasts, and given the continuing, modest growth rate of the economy, and the mixed industry performance, there is always the risk that the new sales promotion plan might not succeed. Of course, it might succeed. At the upcoming executive SOP meeting, you have to recommend a course of action in response to the new sales promotion plan and the revised sales numbers, while recognizing the risks. Briefly state what you would recommend at the executive SOP meeting on March 13 and explain your reasoning. (Remember that you do not get to make the decision; you get to recommend a course of action about the production plan, to the senior staff, in response to the new sales promotion plan. The senior staff makes the decision.) I am not asking for a new production using the sales promotion plan. Either type your answer into the spreadsheet under the production plan, or write it long hand here. dole Y fn R SMARTPH Answer any three of the next 10 listed questions, and only three. If more than three are answered, I will count the first three with answers and ignore the rest. If you change your mind about answering a question, clearly cross out your answer. 4 You are operating a distribution center utilizing the reorder point/ safety stock approach to manage item inventories. You have passed an item's reorder point; before the new order arrives, is it possible to run out of safety stock (yes or no)? Briefly explain your reasoning. 5 Continuing as a distribution center manager, for any one SKU, if you decide to permanently double the order quantity for future orders of an item, but all other factors (lead time, forecast, standard deviation of demand, and probability of not stocking out) remain the same, would you expect the service level to increase or decrease? (HINT: Look at the service level formula.) AN 6 Through your SOP process, your company has decided upon an average inventory of 1,000,000 units. You have 5,000 SKUs. For each SKU, you have established an order quantity and a desired service level/probability of not stocking out. How could you determine if the 1,000,000 unit planned total inventory is sufficient given your SKU level decision about order quantity, service level and probability of not stocking out