If it takes a supplier 9 days to deliver an order once it has been placed and the standard deviation of daily demand is 5, which of the following is the standard deviation of demand during lead time?

a) 10 b) 15 c) 30 d) 45

7) Holding higher levels of inventory results in ___________ stockout probability and ___________ inventory holding costs (while other relevant parameters stay unchanged).

a) higher; higher b) higher; lower c) lower; higher d) lower; lower

8) In newsvendor model, if the amount of expected lost sales increases (while mean demand stays constant), the expected fill rate would

a) increase. b) decrease. c) stay constant. d) not necessarily behave as any of the above.

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