Mgt 3900: Quiz 2
to derive the optimal order quantity for the true demand distribution from the optimal order quantity for the standard normal distribution, multiply the ________ of the true demand distribution by the optimal order quantity for the standard normal distribution.
-standard deviation
the standard deviation of the standard normal distribution is _______.
1
what is the process for calculating expected inventory
1. convert order quantity Q to a z value 2. look up expected inventory, given that z value, for a standard normal distribution. 3. convert that expected inventory for the actual demand distribution.
if 20 customers arrive per hour and each customer takes two minutes to serve then assuming no queue will form presumes that customers will arrive every____ minutes.
3
If a patient waits 15 minutes before spending 30 minutes with a doctor then the processing time is _____ minutes.
30
suppose you are using a statistical table to determine Q* and the critical ratio is .612. If F(300) =.598 and F (35) = .615 then the round-up rules states that you should choose Q*=_______
350
what queue growth rate will lead to a queue with six customers in five hours?
6/5= 1.2 customers per hour
Which terms are different in the single and multi server queue formulas?
Capacity Utilization
Which are drivers of waiting time in a queue?
Capacity Utilization Variability
The _____ of variation is the ratio of the standard deviation to the average.
Coefficient
The challenge with achieving economies of scale is attracting sufficient ______
Demand
The challenge with achieving economies of scale is attracting sufficient _______.
Demand
True or false: The formula for predicting average waiting time is the same whether there is one server or more than one.
False
The idea being an off-peak discount is to shift demand __________.
From a peak period to a non-busy period
With a multi server queuing system managers can reduce ______ costs per served customer without increasing average customer waiting time.
Labor
The multi server queuing model assumes that each customer has _____ preassigned to one of the servers.
Not been
The multi server queuing model assumes that each customer has to be seen by ______ one agent.
Only
For the queuing model utilization can be calculated as_____ time divided by _____ time.
Processing Interarrival or inter-arrival
The _____ process is the flow of customers when they are being served.
Service
For a process that has variability in the arrival process but none in the service process, there will be _____ waiting time.
Some
If the variability of the waiting and processing time doubles, what will happen to the utilization?
Stay the same
The multi server queuing model assumes that different servers have ______ processing times.
The same
In a pooled queue utilization is _______ in a separate queue.
The same as
The flow rate used to calculate the average number of customers waiting is _______ the flow rate used to calculate the average number of customers being served.
The same as
Which type of queue results when demand exceeds capacity?
Unstable
Assuming that capacity exceeding demand is enough to ensure queues don't form ignores ______.
Variability or variation
What does the number of servers impact?
Waiting time Average number of customers waiting
two outcomes that are independent appear graphically as_____
a circle
two outcomes that are negatively correlated appear graphically as:
a cluster that angles down
A queueing model is a(n) ______ representation of the queue.
abstract
when operating on a make-to-order basis, a product is made____ demand for that unit is known.
after
The ____ process refers to the flow of customers arriving to the system.
arrival
Implied utilization ____ be greater than one.
can
Another name for peak-load pricing is ______ pricing.
congestion
the newsvendor chooses an order quantity by comparing the expected _______ of the nth unit with the expected benefit.
cost
to use the graph method to find Q* you first find the point on the y-axis that equals the ________.
critical ratio
an increase in demand uncertainty will ______ expected profits.
decrease
for a given coefficient of variation of demand, an increase in the critical ratio will _______ mismatch costs.
decrease
to reduce customer waiting time, a manager could ______ variability.
decrease
As the processing time increases, the capacity of the server ______
decreases
If capacity increases, the average wait for service _______.
decreases
Implied utilization is the ratio of to capacity
demand
When customers lose patience and walk away, what is effectively reduced?
demand
in the order-up-to inventory model, the order quantity equals the _____ in the previous period.
demand
the backorder is the amount of _____ that has been occurred but has not been satisfied.
demand
queue growth rate is positive when ________
demand exceeds capacity
Off-peak______ refers to offering reduced prices during a time period with low demand.
discount
Queues do not grow indefinitely because the period in which demand exceeds capacity generally ______ last forever.
does not
Two events are independent when one event occurring _____ have an influence on whether the other event also occurs.
does not
Variability ______ influence the fraction of time a server is working.
does not
maximum profit is the highest possible _______ profit.
expected
the order quantity prescribed by the newsvendor model optimizes which performance metric?
expected profit
The news vendor model is appropriate for setting where a customer will wait for the next shipment to show up in cases where a store runs out of inventory
false
True or false: Calculating the average time spent serving each customer requires measuring how long each customer spends waiting and being served.
false
True or false: In the multiple server queueing model, it is assumed that customers will wait for a period of time and then leave.
false
True or false: Two processes with the same standard deviation will always have the same coefficient of variation.
false
true or false: all demand uncertainty can be eliminated with the use of better forecasting methods
false
true or false: demand often follows the standard normal distribution
false
true or false: expected profit always increases as in-stock probability increases
false
if the expected benefit of having a 300th unit in inventory is________ the expected cost of having a 300th unit then the Newsvendor model prescribes an order quantity that is at least 300 units.
greater than
if the z value for an order quantity Q is positive then Q must be _____the mean of the demand distribution.
greater than
in an organization orders more than the quantity that maximizes expected profit the in-stock probability will be ______ the critical ratio.
greater than
the least profitable situation has ________
high coefficient of variation of demand and low critical ratio
The ___ the growth rate for a queue the longer it will be at time T.
higher
The higher the standard deviation of an arrival process with average interarrival time of 6 minutes the _____ the coefficient of variation.
higher
The longer the processing time, the _______ the utilization.
higher
The lower the average processing time for a service process with standard deviation of two minutes the ______ the coefficient of variation.
higher
The more likely customers are to arrive in batches the ______ the coefficient of variation of the arrival process.
higher
as more periods are combined, the standard deviation of the distribution of demand for the combination of periods becomes ______.
higher
the _____ the stockout probability, the more likely some customer will not be able to purchase a unit.
higher
the higher the in-stock probability, the ________ the likelihood that all demand is satisfied from inventory.
higher
the higher the standard deviation of an arrival process with average interarrival time of 6 minutes the _____ the coefficient of variation.
higher
the higher the underage cost the _______ the critical ratio.
higher
as the order quantity increase the ________ probability decreases.
in-stock
the probability that enough inventory is available to satisfy all demand is called the _______ probability
in-stock
an increase in demand uncertainty will _______ mismatch costs.
increase
increasing the profit margin relative to the cost of left over inventory will _______ the critical ratio.
increase
as the order quantity, Q, increases the in-stock probability ________.
increases
the expected loss associated with holding the qth unit in inventory _______ as Q increases.
increases
If a large population of individuals has a(n) ______ arrival process, the coefficient of variation will be roughly equal to one
independently
stockout probability= 1- ____________ probability.
instock
The _____ time is the time between the customer arrivals to a system.
interarrival
Expected sales= Q- expected________.
inventory
the expected number of units not sold at the end of the season is called expected________.
inventory
Queues form when demand ____ capacity?
is greater than
when there is an opportunity to make a second order, the expected inventory _____ than when there is only one order opportunity.
is less
The single server queuing model assumes that demand ______ capacity.
is less than
make-to-order
item produced after a customer commits to purchasing it
make-to-stock
item produced before eventual owner is know.
the larger the correlation between two products, the _____ coefficient of variation of the pooled product.
larger
the larger the optimal order quantity for the standard normal distribution the _______ the optimal order quantity for the true demand distribution.
larger
the more periods considered, the ____ the mean of the Poisson distribution for demand during that period.
larger
The greater the demand, the ____ the person arriving at time T will be served.
later
______ time is the time between when an order is placed and when it is received.
lead
once an order is places, it takes a supplier two weeks to deliver the order. In this case, two weeks is known as the supplier______ time.
lead
if a quantity is ordered such that the in-stock probability is _______ the critical ratio then ordering more will increase the expected profit.
less than
if a quantity is ordered such that the in-stock probability is _________ the critical ratio then ordering more will increase the expected profit.
less than
if the expected benefit of having a 200th unit in inventory is less than the expected cost then the newsvendor will prescribe an order quantity that is at ________ 200 units.
less than
a period's order quantity = order-up _________ - inventory position.
level
the order-up-to ______ is the desired inventory position after an order is submitted.
level
The higher the implied utilization, the _______ the average time to serve a unit.
longer
The longer the busy period, the ____ the average time to serve a unit.
longer
The longer the processing time, the ______ the average waiting time.
longer
The lower the capacity, the ______ it will take to serve the Qth person in the queue.
longer
the lower the capacity, the ___ it will take to serve the Qth person in the queue.
longer
the overage cost measures the ______ per unit.
loss
The longer the interarrival time, the ______ the utilization.
lower
for a given order up-to-level (s), the higher the inventory position the ____ the order quantity
lower
the more units that are backordered, the _______ the inventory position.
lower
expresso drinks
make-to-order
tailored suits
make-to-order
groceries
make-to-stock
newspaper
make-to-stock
the order-up-to model is appropriate when replenishment occurs_____.
many times
according to critical ratio we
maximize the expected profit
Which is an example of statistical economies of scale when pooling two demands?
mean doubles and standard deviation increases by a factor of 1.75
Arrivals to an emergency room typically have an arrival process with a _______ coefficient of variation.
medium
expected profit = maximum profit- costs
mismatch
The higher the implied utilization the ______ time customers need to wait to be served
more
servers
multiple
order-up to:
multiple orders over a long time horizon
in the _______ model, the order quantity in each period equals the demand in the previous period.
order-up-to inventory
in the context of managing inventory, a period is the time between when _____ can be placed.
orders
A pre-processing strategy seeks to reduce the amount of work needed to process a customer during the _____ period.
peak
Off-________ discount refers to offering a discount during a non-busy period.
peak
________- load pricing refers to charging more during the times that you know you are busiest.
peak
the time between two ordering opportunities is called a ______.
period
expected on-hand inventory is the average amount of inventory on hand at the end of each _______.
period.
if multiple periods are to be combined, the combines demand is the single period demand times the number of __________.
periods
products_______ reduces the variety offered to customers by combining similar products or a second strategy for reducing demand uncertainty is product______
pooling, combining or combination
Encouraging airline passengers to check in online is an example of which kind of strategy?
pre-processing
A pre- ______strategy seeks to move some of the work required to process a customer from the peak time to an off-peak time.
processing
The ____ time is the time a customer spends with a server
processing
which has the highest overage cost?
purchase price is $100 ,Salvage value is $0.
______ response is the capability to repsond to updated demand information
quick
______ capacity an ______ reponse enable firms to reduce both types of mismatch costs.
reactive, quick
adding a second ordering opportunity _______ mismatch costs.
reduces.
statistical economies of scale refers to _______ uncertainty in demand by having a larger scale of pooled demand.
reducing
The coefficient of variation is a(n) _______ measure of variability.
relative
the coefficient of variation is a(n) ______ measure of demand uncertainty
relative
The purpose of peak-load pricing and off-peak discounts is to reduce demand during a peak period without reducing
revenue
the expected number of units sold during the season at regular price is called expected ______.
sales
expected sales from first order + expected sales from _____ order = expected demand (assuming have perfect information regarding demand when placing second order)
second
what item has the highest underage cost?
selling price is $500, purchase price from supplier is $100
queue
single
newsvendor
single order for a sales season
When 10 customers arrive per hour, there is no variability in the arrival process when each customer arrives exactly_____ minutes after the previous customer.
six
An organization that only performs one service likely has a _______ coefficient of variation for its service process than one that performs multiple services.
smaller
the larger the correlation between two products, the ______ the expected profits.
smaller
at the end of season, every unit that is ordered is either _______ by the seller or left in _______.
sold, inventory
The higher the capacity, the _______ the person arriving at time T will be served.
sooner
the correlation between demand for two individual products impacts which distribution parameter for the pooled product?
standard deviation of demand
modular components have ______ interfaces to other components.
standardizes.
the probability that some demand was not able to purchase a unit is called the ______ probability
stockout
one type of mismatch cost is the cost of having too much
supply, inventory or stock
the coefficient of variation of demand to expected demand
the standard deviation of demand to expected demand
true or false: the period (Time between two ordering opportunities) is always of the same duration
true
If interarrival times are two minutes and processing times are three minutes then what is the minimum number of servers required to ensure the queue does not steadily (and indefinitely) grow?
two
when determining the best fit order quantity, which input changes because of the opportunity to place a second order first.
underage
To reduce waiting times a manager should seek to reduce ________.
variability
Capacity exceeding demand does not guarantee that a queue will not form because there can be_______ in how customers arrive and how long it takes to serve them.
variation
A queuing model enables one to predict ______ times.
waiting
The flow time for a customer can be broken down into the processing time and the_____ time.
waiting
according to desired in-stock probability
we need high customer service
The single server queuing model assumes that customers _____ wit.
will
A process where every customer arrives five minutes apart and takes exactly three minutes to serve will have average wait time equal to _______.
zero
The Poisson distribution assigns _______ probability to fractional outcomes.
zero
the mean of the standard normal distribution is___________.
zero
