Production and Operations Analysis, Seventh Edition
7th Edition
ISBN: 9781478623069
Author: Steven Nahmias, Tava Lennon Olsen
Publisher: Waveland Press, Inc.
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Chapter 3.1, Problem 5P
Summary Introduction
To Explain:The compromises between the sales and operations process of long and short fixed time horizons.
Introduction:Sales and operations planning process is something that has to be carried out continuously, as companies cannot afford to halt sales or operations at any cost. However, the optimum time horizon of doing the same could vary from one company to another. Also, there may be certain compromises of each time horizon.
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What are the trade-offs between having long fixed or frozen periods versus shortfixed or frozen periods as outputs of the S&OP process?
Demand for portable music players for joggers has caused Nancy Industries (Nancy) to grow almost 50 percent over the past year. The number of joggers continues to expand, so Nancy expects demand for music player to also expand, because, as yet, no safety laws have been passed to prevent joggers from wearing them.  Demands for the players for last year was as follows :
Month
Demand (units)
Jan
4200
Feb
4300
Mar
4000
Apr
4400
May
5000
Jun
4700
Jul
5300
Aug
4900
Sep
5400
Oct
5700
Nov
6300
Dec
6000
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Question :
From the choice of simple moving average, weighted moving average, exponential smoothing, and linear regression analysis, which forecasting technique would you consider the most accurate to Nancy Industries? Why?
Spark Ltd has two divisions, assembly and electrical. The assembly division transfers partially
completed components to the electrical division at a predetermined transfer price. The assembly
division's standard variable production cost per unit is $550. This division has spare capacity, and it
could sell all its components to outside buyers at $680 per unit in a perfectly competitive market.
Required:
a) Determine a transfer price using the general rule
b) How would the transfer price change if the assembly division had no spare capacity?
c) What transfer price would you recommend if there was no outside market for the transferred
component and the assembly division had spare capacity?
d) Explain how negotiation between the supplying and buying units may be used to set transfer
prices. How does this relate to the general transfer pricing rule?
Chapter 3 Solutions
Production and Operations Analysis, Seventh Edition
Ch. 3.1 - Prob. 1PCh. 3.1 - Prob. 2PCh. 3.1 - Prob. 3PCh. 3.1 - Prob. 4PCh. 3.1 - Prob. 5PCh. 3.1 - Prob. 6PCh. 3.2 - Prob. 7PCh. 3.2 - Prob. 8PCh. 3.2 - Prob. 9PCh. 3.2 - Prob. 10P
Ch. 3.2 - Prob. 11PCh. 3.2 - Prob. 12PCh. 3.3 - Prob. 13PCh. 3.3 - Prob. 14PCh. 3.3 - Prob. 15PCh. 3.3 - Prob. 16PCh. 3.4 - Prob. 17PCh. 3.4 - Prob. 18PCh. 3.4 - Prob. 19PCh. 3.4 - Prob. 20PCh. 3.4 - Prob. 21PCh. 3.4 - Prob. 22PCh. 3.4 - Prob. 23PCh. 3.5 - Prob. 26PCh. 3.5 - Prob. 27PCh. 3.6 - Prob. 29PCh. 3.6 - Prob. 30PCh. 3 - Prob. 31APCh. 3 - Prob. 32APCh. 3 - Prob. 33APCh. 3 - Prob. 34APCh. 3 - Prob. 35APCh. 3 - Prob. 36AP
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