Discuss the approach to Sales and Operations Planning that might be the most appropriate for the following companies. Explain your reasoning

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.
 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. Discuss the potential impact that an especially militant labor union can have on the
strategic approach to S&OP.
A militant labor union implies that the labor force is unstable. This makes it difficult to
determine needed labor and overtime costs and needs. The cost of replacement labor will
be difficult to factor in as will the availability of a labor pool. Inventory may be depleted
sooner than expected. Once the strike is over, new costs and catch up for depleted stock
will be required.

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3. 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.
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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.

4. What changes, if any, will the perishability of the inventory have on the capability
of a company in using a level strategy. Consider, for example, a meat market and a
fast-food restaurant.
Pricing and/or package offerings can help in level strategy situations. As foodstuffs
approach the end of shelf life you can package items at a lower price than if bought
separately.

5. How, if at all, will the overall strategic plan of the company alter its approach to
S&OP?
The strategic plan greatly affects the approach to S&OP. The plan and subsequent path
the company will take will take a level, chase or combination approach. All these systems
will reflect the company’s approach to inventory, sales, human resources and equipment
resources.

6. 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.

7. 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
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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