Demand for ice cream at the Ouachita Dairy can be approximated by a normal distribution with a mean of 15 gallons per day and a standard deviation of 5 gallons per day. The management desires a service level of 90%. Lead time is four days. What reorder point would be consistent with the desired service level in an EOQ model?

The bullwhip effect refers to the increasing fluctuations in orders that often occur as orders move through the supply chain.

A restaurant runs a special promotion on lobster and plans to sell twice as many lobsters as usual. When this large order is sent to the distributor, the distributor assumes the large size is a trend, not a one-time event. The distributor therefore places an even larger order with the lobsterman. This behavior is the result of which of the following?

In traditional “wholesale price contracts”, the buyer specifies the precise quantity required and then to pay the supplier a cost per unit for the order.

Consider the following product structure. If the demand for product A is 50 units, how many units of component G will be needed?

We can always predict the future perfectly when we use forecasting methods.

The key difference between an EOQ inventory model where demand is known and one where demand is uncertain is in computing the reorder point.

Supply chain decisions are not generally strategic in nature, because purchasing is not a large expense for most firms.

Short-range forecasts tends to be more accurate than longer-range forecasts.

The first step in devising an effective supply chain strategy is to consider the nature of the demand for your products.