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*