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1. Fill rate is an inventory performance measure for the chance of stocking out during a replenishment cycle?
a. True
b. False
2. Suppose you plan to sell t-shirts for a particular concert. Assume that you buy t-shirts at $5 per unit from a supplier and you can sell it at $10 per unit. The leftovers can be sold in eBay at $2 per unit. Using the newsvendor model, what is the critical fractile to maximize the expected profit?
a. 0.375
b. 0.5
c. 0.625
d. 0.875
3. Assuming no safety stock, what is the reorder point (R) given a daily demand of 100 units, a lead time of 10 days and 625 units on hand?
a. 1000
b. 1625
c. 625
d. 375
4. If annual demand is 1,600 units, the ordering cost is $100 per order and the holding cost is $2.00 per unit per year, which of the following is the optimal order quantity (EOQ)?
a. 120
b. 240
c. 400
d. 600
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