Lecture 8

Question 1

Inventory Position =

Answer 1

Inventory on hand
+Outstanding orders
– Backlog

Question 2

The uncertainty of both demand and supply and The desired level of product availability, determines

Answer 2

the appropriate level of safety inventory in multi-period models.

Question 3

errors of the forecast:

Answer 3

RMSE

Question 4

Product availability can be measured in several different ways:

Answer 4

Cycle service level (CSL or SERV1) or Product fill rate (FR or SERV2).

Question 5

Continuous review:

Answer 5

Inventory is monitored continuously and orders can be placed any time

Question 6

Periodic review:

Answer 6

Inventory is monitored at specific time intervals

Question 7

Sales variability: SKUs with high RMSE in daily forecasted sales indicate

Answer 7

unpredictable demand.

Question 8

Important SKU?

Answer 8

Prioritize high-value or critical SKUs that benefit from efficient centralization.

Question 9

he Cycle Service Level (CSL) represents

Answer 9

the probability that demand will not exceed supply during a replenishment cycle.

Question 10

Order up to level (OUL) =

Answer 10

Dt+L+Z*Ot+L

Question 11

Q is almost always …

Answer 11

D