Question: 2) Which does NOT belong to effective ways in reducing the shortage cost, i.e., marginal lost from a stock out? a.Improve forecasting b.Offer free shipping

2) Which does NOT belong to effective ways in reducing the shortage cost, i.e., marginal lost from a stock out?

a.Improve forecasting

b.Offer free shipping to customers once the items are back to stock

c.Contact other stores and see if they have substitutable products in case of a stock out

d.Back-up sourcing: producing from domestic/responsive suppliers

3)Which of the following statements is FALSE?

a.EOQ model is suitable for perishable products

b.In-stock probability measures the percentage of time that all customers are satisfied immediately from stock.

c.Newsvendor model is suitable for products with long lead times

d.Fill rate measures the proportion of customers that is satisfied immediately from stock.

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