Which of the following are examples of intermediate operations planning decisions?
A. Deciding on the amount of inventory to hold
B. Deciding on which production equipment to purchase
C. Deciding on the location of a production facility
D. Deciding on what products/services to offer
E. Job sequencing
The correct answer and explanation is :
The correct answer is:
A. Deciding on the amount of inventory to hold
E. Job sequencing
Explanation:
Operations planning decisions are categorized into three levels: strategic, tactical (intermediate), and operational. Intermediate operations planning decisions fall under the tactical level, which focuses on medium-term planning—typically covering a period of months to a few years. These decisions bridge the gap between long-term strategic plans and short-term operational execution.
- Deciding on the amount of inventory to hold (A)
- Inventory management is a critical part of intermediate planning. Companies must determine how much inventory to keep on hand to meet customer demand while minimizing holding costs. This involves techniques like Economic Order Quantity (EOQ), Just-in-Time (JIT), and demand forecasting. Inventory decisions directly impact production schedules, lead times, and customer satisfaction.
- Job sequencing (E)
- Job sequencing involves determining the order in which jobs or tasks are processed. This is crucial for optimizing production efficiency, meeting delivery deadlines, and minimizing idle time or bottlenecks. Common job sequencing methods include First Come First Serve (FCFS), Shortest Processing Time (SPT), and Earliest Due Date (EDD). Proper sequencing ensures smooth workflow and better resource utilization.
Why the Other Options Are Not Intermediate Planning Decisions:
- B. Deciding on which production equipment to purchase (Strategic)
- This is a long-term decision affecting capital investments and the company’s technological capabilities. It requires substantial financial commitment and aligns with overall business strategy.
- C. Deciding on the location of a production facility (Strategic)
- Facility location impacts logistics, labor availability, and market access, making it a high-level strategic decision with long-term implications.
- D. Deciding on what products/services to offer (Strategic)
- This affects the company’s market position, brand identity, and long-term direction, making it a core strategic decision rather than an intermediate one.
Intermediate planning ensures the effective implementation of strategic decisions while providing a flexible framework for operational activities.