Strategic, Tactical and Detailed Planning, know what they are and the differences between them correct answers o Strategic Planning- planning that takes place at the highest levels of the firm, addressing needs that might not arise for years into the future.
Tactical planning- planning that cov...
URI BUS 355 b walsh exam 3 || A Verified A+ Pass.
Strategic, Tactical and Detailed Planning, know what they are and the differences between them
correct answers o Strategic Planning- planning that takes place at the highest levels of the firm,
addressing needs that might not arise for years into the future.
Tactical planning- planning that covers a shorter period, usually 12 to 24 months out, although
the planning horizon may be longer in industries with very long lead times.
Detailed Planning and control- planning that covers time periods ranging from weeks down to
just a few hours out.
Differences- 1. The time framed covered. 2. The level of planning detail required and 3. The
degree of flexibility managers have to change capacity.
o Detailed planning: correct answers Limited ability to adjust capacity
Detailed planning (day to day, hour to hour)
Lowest risk
o Tactical Planning: correct answers Workforce, inventory, subcontracting, and logistics
decisions
o Strategic Planning: correct answers "Bricks and mortar" and major process choice decisions
Planning done at a very high level (quarterly or yearly)
High risk
Sales and Operations Planning must consider and strike a balance among what across the supply
chain? correct answers o S&OP strikes a balance between the various needs and constraints of
the supply chain partners
Bottom Up Planning and Top Down Planning, know what they are and be able to identify the
best approach given a scenario correct answers o Bottom up planning: an approach to S&OP that
is used when the product/service mix is unstable and resource requirements vary greatly across
the offerings. Under such conditions, managers will need to estimate the requirements for each
set of products or services separately and then add them up to get an overall picture of the
resource requirements.
o Top-down planning: an approach to S&OP in which a single, aggregated sale forecast drives
the planning process. For top-down planning to work, the mix of products o services must be
essentially the same from one-time period to the next r the products or services to be provided
must have very similar resource requirements.
Planning Values, know what they are and be able to calculate resource requirements given a set
of values - pg 297 (definition) - pg 298 (calculate values) correct answers o Planning Values:
values that decision makers use to translate a sales forecast into resource requirements and to
determine the feasibility and costs of alternative sales and operations plan.
, Calculation:
Description -- Service Mix LH Costs per installation
Cable TV installation-- 40% 2 $15
Satellite TV Installation --40% 3 $90
DSL Installation -- 20% 4 $155
Level and Chase production Plans, know the difference and be able to identify them given
different scenarios - pg 300 - 301. correct answers o Level Production Plan: a sales and
operations plan in which production is held constant and inventory is used to absorb differences
between production and the sales forecast.
o Chase production plan: a sales and operations plan in which production is changed in each time
period to match the sales forecast.
o Difference:
Level is used when the environment in which changing the production level is very difficult or
extremely costly and the cost of holding inventory is relatively low.
Chase is used when the environment in which holding inventory is extremely expensive or
impossible or the costs of changing production levels are relatively low.
Calculate ending inventory given a set of planning values - pg 302 correct answers o Ending
Inventory= Ending Inventory (prior month) + Regular Production + Overtime Production- Sales
Be able to calculate net cash flow given a business scenario pg 306 correct answers o Net cash
flows= cash inflows - cash outflows
Things to consider when choosing between alternative production plans - pg 308 correct answers
o Things to consider:
What impact will the plan have on supply chain partners such as key suppliers and
transportation providers? This could be particularly important if production levels vary
considerably from one period to the next.
what are cash flows like? Some plans may be profitable at the end of the planning cycle but still
include periods in which cash expenses exceed revenues. We discussed earlier how cash flow
analysis can be used to evaluate such plans.
Do the supply chain partners and the firm itself have the same space needed to hold any planned
inventories?
Does the plan contain significant changes in the workforce? If so, what would be the impact on
workforce satisfaction and productivity? Could the HR department handle the additional
inventories?
How flexible is the plan? That is, how easy or difficult would it be to modify the plan conditions
warrant?
Know what is meant by a rolling planning horizon pg 309 correct answers o Rolling planning
horizon- a planning approach in which an organization updates its sales and operations plan
regularly, such as on a monthly or quarterly basis.
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