An Auto Parts Store Wants to Simulate Its Inventory System

question 57

Multiple Choice

An auto parts store wants to simulate its inventory system for engine oil. The company has collected data on the shipping time for oil and the daily demand for cases of oil. A case of oil generates a $10 profit. Customers can buy oil at any auto parts store so there are no backorders (the company loses the sale and profit) . The company orders 30 cases whenever the inventory position falls below the reorder point of 15 cases. Orders are placed at the beginning of the day and delivered at the beginning of the day so the oil is available on the arrival day. An average service level of 99% is desired. The following spreadsheets have been developed for this problem. The company has simulated 2 weeks of operation for their inventory system. The current level of on-hand inventory is 25 units and no orders are pending.
-Using the information in Exhibit 12.3, what Risk Solver Platform (RSP) function should be used in cell I8 to determine the lead time for an order?

• A)=PsiDiscrete($B$6:$B$8, $C$6:$C$8)
• B)=PsiPoisson(Data!$B$6:$B$8,$Data!$C$6:$C$8)
• C)=PsiBinomial(Data!$B$6:$B$8,$Data!$C$6:$C$8)
• D)=PsiNormal($B$6:$C$8)

Determine the outcomes of excess supply or demand in market equilibrium.

Understand the implications of changes in income on demand for normal goods.

Evaluate the impact of supply and demand equations on market equilibrium prices and quantities.

Comprehend the role of substitutes in market dynamics and how changes in the supply of one good can affect the price of substitute goods.

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Definitions:

Trichromatic Theory

A theory explaining color vision as a result of the retina containing three types of receptors that are sensitive to red, green, and blue wavelengths of light.

Opponent Process Theory

A psychological and neurological model that describes how humans perceive colors as the result of opposing responses between two sets of cones in the eyes.

Colour Vision

The ability of the visual system to distinguish and perceive different wavelengths of light as distinct colors.

Proximal Stimulus

The physical energy from a stimulus that directly interacts with sensory receptors, such as light hitting the retina.