Discuss the approach to Sales and Operations Planning that might be the most appropriate for the following companies. Explain your reasoning:
• A bank – chase – customer demand is not consistent and fluctuates.
• A fast-food restaurant combination – demand is somewhat predictable and reservations can be used. Once customers are in the restraint then the food ordered is difficult to predict.
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• An automobile service center attached to a dealership Level – these operations are typically reservation or schedule driven
• A hotel Level – reservations are taken
• An attorney’s office Level – appointments are taken
• A retail clothing store Chase – demand is unknown until customer walks in the store 2. A company has traditionally used a level strategy for planning for several years.
Discuss the potential changes in their environment that could make them consider using more chase tactics. A change in demand of their product – either the market matures or starts to decline. The company may lose the ability to warehouse items. They can also lose production capability or face challenges from competition that requires a change in workforce levels. 3. How, if at all, will the overall economic conditions in a company’s environment alter their approach to S&OP? Give several examples. This is similar to #5. Examples here could include a tight labor market driving up labor costs. New laws or regulations could affect the price of goods manufactured. Increased competition will change the availability and price you can charge which could lead to changes in your production rates and even employment levels. 4. Discuss the potential pros and cons of the aggregation process that must be done prior to developing the S&OP. For example, what are the tradeoffs when deciding to aggregate the data into quarters instead of by month? What are the tradeoffs when deciding how many product definitions to include in a “product family”? The level of detail will change depending upon the number of factors to be considered. Forecasts will change. The models become less responsive when produced by quarters rather by the month. Monthly forecasts are less responsive than weekly forecasts. Resources needed for production also need to be considered. People, equipment and/or raw materials needed for production need to be determined prior to setting your S&OP plan. Flexibility of the workforce and production process have an effect.