Use the order-up-to model to manage its inventory

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Reference no: EM132305085

1. Which of the following products will NOT be suitable to use the order-up-to model to manage its inventory?

Newspapers

Laundry detergents

Notebooks

Canned foods

2. Suppose the order-up-to model is used to manage inventories. The required amount of inventory ________ at a(n) ________ rate as the target in-stock probability approaches one.

decreases, increasing

increases, increasing

increases, decreasing

decreases, decreasing

3. Bakery A sells bread for $2 per loaf that costs $0.80 per loaf to make. Bakery A gives a 90% discount for its bread at the end of the day. Demand for the bread is normally distributed with a mean of 300 and a standard deviation of 30. What order quantity maximizes expected profit for Bakery A?

320

325.25

324.00

315

4. The time between two ordering opportunities for an order-up-to product is called a ________ and it has a ________ duration.

lead time, fixed

period, variable

period, fixed

lead time, variable

5. A product's demand over (l + 1) periods is normally distributed with a mean of 100 and standard deviation of 10. Lead time is 2 periods. The order-up-to model is used to manage inventories. What will happen to expected on-hand inventory when in-stock probability increases?

It will decrease.

It may either increase or decrease.

It will increase.

It will stay the same.

6. The 5 Whys can be used for discovering the causes of nonalignment.

True

False

7. Scenario analysis should be done for all of the identifiable uncertainties faced by a business.

True

False

Reference no: EM132305085

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