Lot Size Based Quantity Discounts

question 4

Multiple Choice

Lot size based quantity discounts

• A) decrease the lot size of orders placed within the supply chain.
• B) increase the lot size of orders placed within the supply chain.
• C) magnify the bullwhip effect.
• D) A and C only
• E) B and C only

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Definitions:

Poisson Distribution

A statistical probability distribution that expresses the probability of a given number of events occurring in a fixed interval of time or space when these events occur with a known constant mean rate and independently of the time since the last event.

Negative Exponential Distribution

A probability distribution used to model time between independent events that occur at a constant average rate.

Average Arrival Rate

The average rate at which entities (such as customers or products) arrive at a specific point or system over a defined period.

M/D/1

A notation in queue theory representing a system with a single server, where arrivals are Markovian (Poisson process), service times are deterministically fixed, and there is one server.