S&OP stands for Sales and Operations Planning. Its role is to balance supply and demand at the volume level.

1. Relationships in Supply Systems II

2. Your Task?
• Refer to the given framework and analyze
• Provide Relationships with supporting literatures on each
process then explain (you may use our library, or libraries
outside campus, or internet)
• Literatures from Journals/ Thesis or Dissertation/ Books
• As many as relationships , as higher as your point
• Do not copy and paste your explanation. Make your own
explanation as you will be graded according to your
understanding on the literature and depth of knowledge.

3. Relationships

4. Try to see these relationships
• The Relationship between Uncertain Customer Orders and Customer Lead Time Requirement
achieving zero opportunity cost
• The Relationship of Safety Stock and JIT in an Uncertain Demand to Supply Chain Responsiveness
and Efficiency
• The Relationship between supplier and focal company ‘s response to demand uncertainty (Safety
Stock or JIT)
• The Relationship of Fuel Price Elasticity to the Transportation Cost in a single destination where
time and distance are certain
• The Relationship of the cost of Transportation and Inventory to the product’s price where fuel price
is uncertain while time and distance are certain
• The Relationship between the movement of material from supplier to focal company and supply
chain responsiveness and efficiency
• The Relationship of Conversion Time to the Supply Chain Responsiveness and Efficiency
• The Relationship of the Inventory and Transportation Cost Accrual to the price of the finished goods
• The Relationship of Fuel Price Elasticity to the Transportation Cost in a single destination where
time and distance are certain
• The Relationship of the continuous accrual of the cost of Transportation and Inventory to the
finished good’s price where fuel price is uncertain while time and distance are certain
• The Relationship between the movement of material from focal company to customers and supply
chain responsiveness and efficiency achieving zero opportunity cost

5. Your Problem?

6. Say, this is your framework?

7. Guide Questions and Assumptions

8. Flow Chart

10. Scenario 1
SAFETY STOCK ENVIRONMENT
YES YES Customer Orders
R R
O Replenish Stocks O
P P
NO NO
COST
TrC Out: InvC Out TC in: Inv In
Produce Delivery Time
Supplier Focal Company Customer
Material
COST
TrC Out: InvC Out TrC in: InvC In
Produce
Material
Delivery Time

11. Scenario 2
JIT ENVIRONMENT
Customer Orders
COST
TrC Out: InvC Out TC in: Inv In
Produce Delivery Time Customer
Supplier Focal Company
Material
COST
TrC Out: InvC Out TrC in: InvC In
Produce
Material
Delivery Time

12. Scenario 3
SAFETY STOCK: JIT ENVIRONMENT
YES Customer Orders
R
Replenish Stocks O
P
NO
COST
TrC Out: InvC Out TC in: Inv In
Produce Delivery Time
Supplier Focal Company Customer
Material
COST
TrC Out: InvC Out TrC in: InvC In
Produce
Material
Delivery Time

13. Scenario 4
JIT: SAFETY STOCK ENVIRONMENT
Customer Orders
YES R
O
P
NO
COST
TrC Out: InvC Out TC in: Inv In
Produce Delivery Time
Supplier Focal Company Customer
Material
COST
TrC Out: InvC Out TrC in: InvC In
Produce
Material
Delivery Time

14. end

15. Quiz Bee

16. Question 1
An Inventory classification that includes Raw
Material, Work In Progress, and Finished Goods
1) is called:
A) Process Stage
B) Number and Value
C) Demand Type
D) ABC Classification
E) None of the Above

17. PROCESS STAGE

18. Question 2
An Inventory classification that includes dependent
1) and independent demand is called:
A) Demand Type
B) ABC Classification
C) Process Stage
D) Number and Value
E) None of the Above

19. DEMAND TYPE

20. Question 3
It allows a segment of the master
schedule to be designated as “not to be
1) rescheduled
A) Pegging
B) Time Fence
C) JIT
D) Lot sizing
E) None of the Above

21. TIME FENCE

22. Question 4
An activity that traces upward in the
bill-of-materials from the component
1) to the parent item
A) JIT
B) Pegging
C) Time Fence
D) Lot Sizing
E) None of the Above

23. PEGGING

24. Question 5
Its role is to balance supply and demand at the
1) volume level.
A) SCM
B) JIT
C) S&OP
D) Forecasting
E) None of the Above

25. SALES AND OPERATIONS PLANNING