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Operations Management: Processes and Supply Chains, 12th Edition by Larry P. Ritzman, Manoj K. Malhotra, Lee J. Krajewski

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S&OP Supply Options

Developing sales and operations plans means making decisions. In this section, we concentrate on the supply options that ultimately are combined to develop a sales and operations plan. Given demand forecasts, operations managers must develop a plan to meet the demand. There are six options that can be used singly or in combination to arrive at a plan.

  1. Anticipation Inventory Anticipation inventory can be used to absorb uneven rates of demand or supply. For example, a plant facing seasonal demand can stock anticipation inventory during light demand periods and use it during heavy demand periods. Manufacturers of air conditioners, such as Whirlpool, can experience 90 percent of their annual demand during just 3 months of a year. ...

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