OTM 300 Final Exam Questions And 100% Correct Answers
Sales and Operations Planning - ANSWER An organizational process for developing a
plan to efficiently make supply meet demand. (Make Supply=Demand)
Long-Term Planning - ANSWER Facilities planning building new stuff, etc.
Medium-Term Planning - ANSWER Sales and Operations Planning within existing
facilities, what do we have to do to meet demand. Need to track inventory at an
appropriate level of detail
Short-Term Planning - ANSWER Detailed Scheduling
Decisions at each planning level (long, medium, and short-term). - ANSWER Constrain
options at lower levels
Typical Approaches to Sales and Operations Planning - ANSWER -Chase Plan
-Stable workforce with variable hours
-Stable workforce with subcontracting
-Level plan
Chase plan - ANSWER Increase/decrease capacity to exactly meet demand each period.
Cumulative production precisely follows cumulative demand. Advantage is meeting
demand with low levels of inventory
Stable workforce with variable hours - ANSWER Workforce is kept stable; output levels
varied through overtime (or undertime - reduce everyone's hours, for example)
Stable workforce with subcontracting - ANSWER Workforce is kept stable and produces
,at constant rate; output levels are varied through subcontracting to meet demand,
rather than overtime
Level plan - ANSWER Produce same amount each period, from stable workforce
Sales and Operations Planning Maturity Model developed by Gartner - ANSWER 1)
Reacting
2) Anticipating
3) Collaborating
4) Orchestrating
Reacting - ANSWER Earliest stage in S&OP Maturity Model. More of a sales review
meeting, inconsistent, ineffective
Anticipating - ANSWER Second stage in S&OP Maturity Model. More formal, structured
process, match supply to demand; lack of balance (sales-dominated and not much
coordination)
Collaborating - ANSWER Third stage in S&OP Maturity Model. More proactive; work with
supply chain partners on planning
Orchestrating - ANSWER Last stage in S&OP Maturity Model. More dynamic, agile
process; firm influences operations throughout the supply chain
Red Wing Shoes change efforts focused on the three primary components of S&OP: -
ANSWER People, process, and technology
Key change in Red Wing Shoes example - ANSWER Forecasts/plans shared with
suppliers and manufacturing teams and they are involved in the creation of the plan
People side of Red Wing Shoes - ANSWER Added a new demand planning role for each
,brand\more communication with sales, better (updated) forecasts, updates relayed to
suppliers and manufacturers)
Process side of Red Wing Shoes - ANSWER Broken down, responsibilities assigned
Benefits of Red Wing Shoes new S&OP process - ANSWER -Time cut from 6 to 3 Weeks
-Improved data access - reports ready in minutes
-Users trust the data
-Clear understanding of ownership/responsibilities across the process
-Inventory was cut while customer fill rates improved
Yield Management - ANSWERManage the reservations inventory in a way that
increases/maximizes company profitability - airline example
Major functions of yield management - ANSWER -Discount allocation
-Overbooking
-Traffic Management
Key issues in yield management - ANSWER -As the date of the opening draws closer, the
price for a ticket/reservation continues to increase
-Historical data shows that a number of customers will be "no-shows" when the day
arrives
Types of customers involved in discount allocation - ANSWER -Bargain Hunters
-Spendthrifts
Bargain Hunters - ANSWER Willing to purchase tickets well in advance if savings are
significant
, Spendthrifts - ANSWER Buy at last minute regardless of cost
Overbooking - ANSWER A common practice to sell more reservations for a flight than
there are seats on an aircraft to maximize revenue
Traffic Management - ANSWER -Control reservations by passenger origin and
destination to maximize revenue
-The hub-and-spoke design used by most major airlines greatly complicates the problem
Forecasting - ANSWER Process of predicting future outcomes based on the available
relevant information. Key input to the Sales and Operations Planning process. Many
factors influence outcomes and errors can have significant costs/consequences
Judgmental Forecasting Approach - ANSWER Used when situation is vague and little
data exists. Involves intuition, experience. (New products, new technology, etc.)
Top-Down approach to judgmental forecasting - ANSWER A small group at the top of the
organization generates a sales forecast and it trickles down. Advantage is that
executives may know more about a certain thing
Bottom-Up approach to judgemental forecasting - ANSWER Forecasting starts with
sales representatives since they have a lot of information from customers
Quantitative Forecasting Approach - ANSWER Used when situation is 'stable' and
historical data exists. Involves mathematical techniques. (Existing products, current
technology, etc.)
Types of Quantitative Forecasting Approaches - ANSWER -Time Series
-Explanatory
Time Series Methods of Quantitative Forecasting - ANSWER A set of evenly spaced
Sales and Operations Planning - ANSWER An organizational process for developing a
plan to efficiently make supply meet demand. (Make Supply=Demand)
Long-Term Planning - ANSWER Facilities planning building new stuff, etc.
Medium-Term Planning - ANSWER Sales and Operations Planning within existing
facilities, what do we have to do to meet demand. Need to track inventory at an
appropriate level of detail
Short-Term Planning - ANSWER Detailed Scheduling
Decisions at each planning level (long, medium, and short-term). - ANSWER Constrain
options at lower levels
Typical Approaches to Sales and Operations Planning - ANSWER -Chase Plan
-Stable workforce with variable hours
-Stable workforce with subcontracting
-Level plan
Chase plan - ANSWER Increase/decrease capacity to exactly meet demand each period.
Cumulative production precisely follows cumulative demand. Advantage is meeting
demand with low levels of inventory
Stable workforce with variable hours - ANSWER Workforce is kept stable; output levels
varied through overtime (or undertime - reduce everyone's hours, for example)
Stable workforce with subcontracting - ANSWER Workforce is kept stable and produces
,at constant rate; output levels are varied through subcontracting to meet demand,
rather than overtime
Level plan - ANSWER Produce same amount each period, from stable workforce
Sales and Operations Planning Maturity Model developed by Gartner - ANSWER 1)
Reacting
2) Anticipating
3) Collaborating
4) Orchestrating
Reacting - ANSWER Earliest stage in S&OP Maturity Model. More of a sales review
meeting, inconsistent, ineffective
Anticipating - ANSWER Second stage in S&OP Maturity Model. More formal, structured
process, match supply to demand; lack of balance (sales-dominated and not much
coordination)
Collaborating - ANSWER Third stage in S&OP Maturity Model. More proactive; work with
supply chain partners on planning
Orchestrating - ANSWER Last stage in S&OP Maturity Model. More dynamic, agile
process; firm influences operations throughout the supply chain
Red Wing Shoes change efforts focused on the three primary components of S&OP: -
ANSWER People, process, and technology
Key change in Red Wing Shoes example - ANSWER Forecasts/plans shared with
suppliers and manufacturing teams and they are involved in the creation of the plan
People side of Red Wing Shoes - ANSWER Added a new demand planning role for each
,brand\more communication with sales, better (updated) forecasts, updates relayed to
suppliers and manufacturers)
Process side of Red Wing Shoes - ANSWER Broken down, responsibilities assigned
Benefits of Red Wing Shoes new S&OP process - ANSWER -Time cut from 6 to 3 Weeks
-Improved data access - reports ready in minutes
-Users trust the data
-Clear understanding of ownership/responsibilities across the process
-Inventory was cut while customer fill rates improved
Yield Management - ANSWERManage the reservations inventory in a way that
increases/maximizes company profitability - airline example
Major functions of yield management - ANSWER -Discount allocation
-Overbooking
-Traffic Management
Key issues in yield management - ANSWER -As the date of the opening draws closer, the
price for a ticket/reservation continues to increase
-Historical data shows that a number of customers will be "no-shows" when the day
arrives
Types of customers involved in discount allocation - ANSWER -Bargain Hunters
-Spendthrifts
Bargain Hunters - ANSWER Willing to purchase tickets well in advance if savings are
significant
, Spendthrifts - ANSWER Buy at last minute regardless of cost
Overbooking - ANSWER A common practice to sell more reservations for a flight than
there are seats on an aircraft to maximize revenue
Traffic Management - ANSWER -Control reservations by passenger origin and
destination to maximize revenue
-The hub-and-spoke design used by most major airlines greatly complicates the problem
Forecasting - ANSWER Process of predicting future outcomes based on the available
relevant information. Key input to the Sales and Operations Planning process. Many
factors influence outcomes and errors can have significant costs/consequences
Judgmental Forecasting Approach - ANSWER Used when situation is vague and little
data exists. Involves intuition, experience. (New products, new technology, etc.)
Top-Down approach to judgmental forecasting - ANSWER A small group at the top of the
organization generates a sales forecast and it trickles down. Advantage is that
executives may know more about a certain thing
Bottom-Up approach to judgemental forecasting - ANSWER Forecasting starts with
sales representatives since they have a lot of information from customers
Quantitative Forecasting Approach - ANSWER Used when situation is 'stable' and
historical data exists. Involves mathematical techniques. (Existing products, current
technology, etc.)
Types of Quantitative Forecasting Approaches - ANSWER -Time Series
-Explanatory
Time Series Methods of Quantitative Forecasting - ANSWER A set of evenly spaced
