Chapter 13 MNGT-3615
Suppose a manufacturer assembles a product from component parts only after a customer has placed an order. However, the firm makes the component parts in advance, based on forecasts. This manufacturer is operating what type of system?
A hybrid of make-to-order and make-to-stock
Which of the following are inputs to the newsvendor model?
Cost of ordering too much Cost of ordering too little
Which strategies does a hybrid quick response system use?
Make-to-order Make-to-stock
Being able to place a second order impacts which mismatch costs?
Opportunity cost of stockouts and cost of leftover inventory
Which of the following factors are involved in the calculation of expected profit?
Order quantity Expected inventory Expected sales
Which has the highest overage cost?
Purchase price is $100. Salvage value is $0.
Which of these equations are true?
Sales + Inventory = Q Expected Sales + Expected inventory = Q Expected Sales = Q - Expected inventory
To evaluate expected inventory by using a table, you would need a table that displays what elements?
The distribution function F(Q) The expected inventory function I(Q)
What is salvage value?
The price at which units are sold at the end of the selling season
Which demand is easiest to forecast?
Total demand across a set of products
Two outcomes that are independent appear graphically as _blank_.
a circle
Two outcomes that are positively correlated appear graphically as _blank_.
a cluster that angles up
When a business operates on a make-to-order basis, a product is made _blank_.
after demand for that unit is known
In-stock probability refers to the likelihood that _blank_.
all demand will be satisfied from the firm's inventory
Knowing a second order can be placed helps an organization be more _blank_ with its first order.
conservative
One strategy for managing the newsvendor environment is to _blank_ demand uncertainty.
decrease
An increase in demand uncertainty will _blank_.
decrease expected profits
Maximum profit is the highest possible profit.
expected
Profit that will be earned from sales of the product, including the consequences of inventory that needs to be salvaged, is called _blank_.
expected profit
True or false: In a make-to-stock system, an item is produced when its eventual owner is known
f
True or false: Expected profit always increases as in-stock probability increases.
false
Statistical economies of scale refers to combining distributions in such a way that the mean of the combined distribution grows at a _blank_ rate than the standard deviation of the combined distribution.
faster
When placing a single order in the face of uncertain demand, organizations have to balance having "too much" against having "too
few, little, or less
An increase in demand uncertainty will _blank_ mismatch costs.
increase
For a distribution function F(Q), the larger the value of Q, the _blank_ the probability it returns.
larger
If a quantity is ordered such that the in-stock probability is _blank_ the critical ratio, then ordering more will increase the expected profit.
less than
The underage cost measures _blank_.
lost profits
Which system leads to mismatch costs?
make to stock
For the normal distribution bell shape, the peak of the density function is at the _blank_ of the distribution.
mean
Expected profit = Maximum profit - _____ costs.
mismatch
In an assemble-to-order system, once an order is received all that remains is to assemble the product from ______ components.
modular
In the newsvendor model, the organization can make _blank_ order(s) for inventory.
only one
Supply chains often operate on a make-to-order basis when customers are _blank_.
patient
Product reduces the variety offered to customers by combining similar products.
pooling, combining, or combination
Demand for high definition televisions and cables for connecting those televisions to other components is likely _blank_.
positively correlated
Maximum profit = Expected demand x ______ per unit sold.
profit
Make-to-order is effective when production is _blank_.
reasonably quick
Statistical economies of scale refers to _blank_ uncertainty in demand by having a larger scale of pooled demand.
reducing
Forecasting methods should be _blank_.
rigorous and data-driven
Expected sales from first order + Expected sales from order = Expected demand (assuming that you have perfect information regarding demand when placing the second order).
second or 2nd
Drag each bell curve shape to the deviation it represents, in comparison to the density function for a normal distribution bell.
small standard deviation matches tall and lean large standard deviation matches short and wide
Modular components have _______ interfaces to other components.
standardized
Drag the quantity you are seeking to the axis that would display it in the graph method.
y-axis matches critical ratio x-axis matches Q*
