1) The table below shows the sales data for the past three years by quarter. The average for all the quarters is 1250. Determine the seasonal factor for Quarter 1 (Q1), round your answer to two decimals.

Year	Q1	Q2	Q3	Q4
2014	1200	1000	1200	1400
2015	1100	1100	1200	1500
2016	1300	1100	1300	1600

0.96

1200

1.04

1.00

2) We use data from the past to determine the best forecasting method for the future. What is one of the uses of this data from the past when dealing with selecting the best forecasting method?

To determine the best value for alpha used in the forecasting method Exponential Smoothing

To determine the best weights for olympic lifting

To determine the best value for c, the capacity of a water slide

All the other answers are correct

3) In a newsvendor setting, the optimal order turned out to be 15 thousand. The demand is uniformly distributed between 10 and 20 thousand. Finally, we know that the cost of overstocking is $50. What was the cost of understocking in this problem?

$100

$50

$200

$150

4) In a newsvendor setting, keeping all else equal, we should increase our order when:

The cost of underage decreases

The cost of overage decreases

The cost of overage increases

The average demand decreases

5) To which of the following settings does the newsvendor model apply?

How many rides to build for a theme park

How many lanes to expand a busy freeway with

The capacity of a new production facility

All the other answers are correct

6) The maximum price that can be asked for the new jPad model is $2,000 at which point they would sell 0 units. It costs Pear $600 to manufacturer and deliver these jPads to their stores. Determine the optimal price for this new jPad, which can be assumed to operate in a monopoly (at least upon introduction).

$1,300

$2,000

$700

$1,000

7) Which of the following is a good way to diminish the bullwhip effect?

If demand decreases, immediately decrease production by at least 10% more than the decrease in demand

If demand increases, immediately increase production by at least 10% more than the increase in demand

Don't overreact to price changes at your supplier or demand changes at your buyer

Buy enough units for at least 2 months from your supplier if he has a temporary sale

8) One of the most-often sold items at a grocery store is frozen pizzas. The weekly demand for frozen pizzas at a local grocery store is 10,000 pizzas. Whenever a new order is placed for a batch of frozen pizzas, the grocery store incurs a cost of $20. The holding costs are $0.10 per frozen pizza per week. Determine the EOQ for frozen pizzas.

Approximately 2,000

Approximately 4,000,000

Approximately 10

Approximately 1,414

9) Product Y has a value of $100 and a holding cost rate of 10% per year. The ordering costs are $1,000, and the yearly demand is 45,000 units. The economic order quantity can be determined to equal 3,000 (feel free to check this). Determine the total inventory costs (i.e., ordering costs + holding costs) per year.

$30,000

$15,000

$9,000

15 orders per year

10) Here are two statements regarding inventory management.

1) The EOQ increases as the holding cost decreases.

2) The ROP increases as the service level increases.

Statement 1 is TRUE, statement 2 is TRUE

Statement 1 is FALSE, statement 2 is FALSE

Statement 1 is TRUE, statement 2 is FALSE

Statement 1 is FALSE, statement 2 is TRUE