What is the average price of a teddy Bower Parka?
Unfortunately, at the time of order placement, demand is still uncertain: Teddy Bower forecasts that its demand is normally distributed with mean 2500 and standard deviation 1200. Teddy Bower sells these parkas at $24 each.
Is it possible to have positive stockout probability and positive expected inventory?
Is it possible to have positive stockout probability and positive expected leftover inventory? Choose the best answer. *Yes - as long as the underage cost is greater than the overage cost.
What is the coefficient of variation of newsvendor?
A company uses the newsvendor model to manage its inventories and faces normally distributed demand with a coefficient of variation = 0.75. The company decides to order a quantity that exactly equals the mean of its demand forecast. Which of the following is true regarding this company's performance measures?
What is the probability that all demand is served?
If the mean of the demand forecast is ordered and demand is normally distributed, then there is a 0.50 probability that all demand is served because there is a 0.50 probability that demand is less than the mean of the forecast.
What is a 15% increase in stock?
Thus, a 15% increase in the in-stock has a larger change in the quantity than a 10% increase in the in-stock. And a 15% increase starting at 80% has a larger increase than a 15% increase starting at 70%.
Can you increase leftover inventory by more than one unit?
If the order quantity is increased by one unit, expected sales and expected leftover inventory increase. But they cannot increase by more than one unit - the most that sales can increase is by one unit and the most that leftover inventory can increase is by one unit.
