What is the primary goal of Sales and Operations Planning (S&OP)?

• A. Align demand and supply plans across the organization on a rolling horizon to balance the business plan with operational capacity.
• B. Minimize short-term production costs.
• C. Eliminate all inventory.
• D. Focus only on marketing forecasts.

Answer: (A)

At its core, Sales and Operations Planning is about aligning what the market asks for with what the operation can deliver, across the whole organization, on a rolling time horizon. It brings together Sales, Marketing, Operations, and Finance to build a single, integrated plan that links demand forecasts to production, capacity, inventory, and financial targets. Because the horizon is rolling, the plan is regularly updated as new data comes in, allowing the company to reallocate capacity, adjust inventory, and revisit scenarios to stay in sync with the business plan and financial objectives.

This approach emphasizes feasibility and optimization across functions, not just cutting costs in the near term or eliminating inventory. It also goes beyond focusing solely on marketing forecasts by considering capacity limits, service levels, inventory implications, and financial impact. That’s why this option best captures the primary goal of S&OP.