OPMA EXAM 2 CHAPTER 8 | STUDY GUIDE, MCQS, PRACTICE QUESTIONS AND OPERATIONS
MANAGEMENT EXAM REVIEW | 2026/2027
What is sales and operations planning? - ANS ✔✔is a process that helps firms provide better
customer service, lower inventory,
shorten customer lead times, stabilize production rates, and give top management a handle on
the business
Types of Planning - ANS ✔✔-Long Range Planning
-Intermediate range planning
-short range planning
Long Range Planning - ANS ✔✔Planning focusing on a horizon greater than one
year, usually performed annually
Intermediate range planning - ANS ✔✔Planning focusing on a period from 3 to 18
months, time increments are weekly, monthly
short range planning - ANS ✔✔Planning covering a period from one day to six
months with daily or weekly time increments
Aggregate Operations Plans - ANS ✔✔It is concerned with setting production rates by
product group or other broad categories for the intermediate term (aggregation)
Specifies the optimal combination of
Production rate (units completed per unit of time)
Workforce level (number of workers needed in a period)
Inventory on hand (inventory carried from previous period)
, Production Planning Environment - ANS ✔✔In general, the external environment is outside
the production planner's direct control
Production Planning Strategies - ANS ✔✔- Chase Strategy
- Stable Workforce (Variable Work Hours)
- Level Strategy
- Subcontracting
strategies are the plans for
meeting demand
Chase Strategy - ANS ✔✔Match the production rate by hiring and laying off employees
Must have a pool of easily trained applicants to draw on
Stable Workforce - ANS ✔✔Vary the number of hours worked through flexible work schedules
or
overtime
Level strategy - ANS ✔✔Demand changes are absorbed by fluctuating inventory levels, order
backlogs, and lost sales
Subcontracting - ANS ✔✔Hiring and laying off are translated into subcontracting
Relevant Costs - ANS ✔✔Costs associated with changes in the production rate
Includes hiring, firing, and lay off costs
Inventory holding costs
Storage, insurance, taxes, spoilage, and obsolescence
MANAGEMENT EXAM REVIEW | 2026/2027
What is sales and operations planning? - ANS ✔✔is a process that helps firms provide better
customer service, lower inventory,
shorten customer lead times, stabilize production rates, and give top management a handle on
the business
Types of Planning - ANS ✔✔-Long Range Planning
-Intermediate range planning
-short range planning
Long Range Planning - ANS ✔✔Planning focusing on a horizon greater than one
year, usually performed annually
Intermediate range planning - ANS ✔✔Planning focusing on a period from 3 to 18
months, time increments are weekly, monthly
short range planning - ANS ✔✔Planning covering a period from one day to six
months with daily or weekly time increments
Aggregate Operations Plans - ANS ✔✔It is concerned with setting production rates by
product group or other broad categories for the intermediate term (aggregation)
Specifies the optimal combination of
Production rate (units completed per unit of time)
Workforce level (number of workers needed in a period)
Inventory on hand (inventory carried from previous period)
, Production Planning Environment - ANS ✔✔In general, the external environment is outside
the production planner's direct control
Production Planning Strategies - ANS ✔✔- Chase Strategy
- Stable Workforce (Variable Work Hours)
- Level Strategy
- Subcontracting
strategies are the plans for
meeting demand
Chase Strategy - ANS ✔✔Match the production rate by hiring and laying off employees
Must have a pool of easily trained applicants to draw on
Stable Workforce - ANS ✔✔Vary the number of hours worked through flexible work schedules
or
overtime
Level strategy - ANS ✔✔Demand changes are absorbed by fluctuating inventory levels, order
backlogs, and lost sales
Subcontracting - ANS ✔✔Hiring and laying off are translated into subcontracting
Relevant Costs - ANS ✔✔Costs associated with changes in the production rate
Includes hiring, firing, and lay off costs
Inventory holding costs
Storage, insurance, taxes, spoilage, and obsolescence
