Mgt 3900: Quiz 2

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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


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