number 11

5 14 C. Adding inventory to a process is likely to increase quality OD. None of the above O E All of the above QUESTION 11 Suppose the news vendor model is used to manage inventories. Which of the following can happen when the order quantity is increased by one unit? Expected leftover inventory decreases by less than one unit. Expected lost sales increases by more than one unit. Expected sales decreases by less than one unit. Expected leftover inventory increases by more than one unit. Expected lost sales decreases by less than one unit. Expected sales increases by more than one unit. None of the above. QUESTION 12 Suppose the news vendor model describes a firm's operations decision. Is it possible to have positive expected lost sales and positive expected best answer No, actual demand can differ from sales. No, if there is leftover inventory, then there should not be lost sales. No, I expected lost sales are positive, then expected leftover inventory must be negative. Yes, they are both expectations over numerous possible outcomes, among which there will be no outcome in which both are positive. Yes, as long as the underage cost is greater than the overage cost. JESTION 13