chapt12

The mean of the standard normal distribution is

0

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

When there is an opportunity to make a second order, the expected inventory ________ than when there is only one order opportunity.

is less

Expected sales measures those sold at _________ price.

regular

The expected number of units sold during the season at regular price is called expected

sales

One type of mismatch cost is the opportunity cost of -------that is the cost of too little supply

stockouts

One type of mismatch cost is the cost of having too much

supply

The cost of ordering too few is called the

underage cost

Y axis X axis

y = critical X= Q

The standard deviation of the standard normal distribution is ---

1

Order the steps in the process for finding the order quantity that maximizes expected profit.

Evaluate find use the z

Product .......reduces the variety offered to customers by combining similar products.

Pooling

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.

Stand deviation

The coefficient of variation of demand is the ratio of

The stand deviation of the demand to expected demand

Which demand is easier to forecast?

Total demand across a set of product

In the newsvendor model, the order quantity is determined _______ demand is known

before

he newsvendor chooses an order quantity by comparing the expected of the Qth unit with the expected benefit.

cost

Maximum profit is the highest possible

expected profit

The newsvendor model is appropriate for a 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 critical ratio is the final step in determining the optimal order quantity.

false

The higher the underage cost the ______ the critical ratio.

higher

Stockout probability = 1 - ..... probability.

in stock

An increase in demand uncertainty will ________ mismatch costs.

increase

The larger the correlation between two products, the _______ the coefficient of variation of the pooled product.

larger

f 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 _______ 200 units

less than

When placing a single order in the face of uncertain demand organizations have to balance having "too much" against having "too----

little

Which strategies does a hybrid system use?

make to stock make to order

Expected profit = Maximum profit -

mismatch cost

In the newsvendor model, the organization can make ______ order(s) for inventory.

only one

one strategy for managing the newsvendor environment is to increase the ----- margin relative to the cost of left over inventory.

profit

small standars deviation Larger stand deviation

small with tall and lean Larger with short and wide

The larger the correlation between two products, the ________ the expected profits. smaller larger

smlaller

When determining the best first order quantity, which input changes because of the opportunity to place a second order later?

underage