#10 value: 1.00 points Conceptual Question 13-4 Suppose the newsvendor... Suppos

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#10

value: 1.00 points Conceptual Question 13-4 Suppose the newsvendor... Suppose the newsvendor model describes a firm's operations decision. Is it possible to have positive stockout probability and positive expected leftover inventory? Choose the best answer. ONo-if there is left over inventory then a stockout doesn't occur. ONo - if the stockout probability is positive, then expected inventory must be negative. ONo - actual demand can differ from sales. OYes - a firm does not stockout and have leftover inventory at the same time, but the stockout probability can be positive even though there is positive expected leftover inventory. OYes- as long as the underage cost is greater than the overage cost.

Explanation / Answer

Yes, a firm does not stockout and have leftover inventory at the same time but the stockout probability can be positive even though there is positive expected leftover inventory.

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