In the Single Period Model,if Excess Cost Is Double Shortage

question 153

Multiple Choice

In the single period model,if excess cost is double shortage cost,the approximate stock-out risk,assuming an optimum service level,is:

• A)100 percent
• B)67 percent
• C)50 percent
• D)33 percent
• E)5 percent

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Definitions:

Drive Theory

A theory in psychology that posits that behavior is motivated by drives that arise from biological needs that demand satisfaction.

Homeostasis

The ability of a living organism to maintain internal stability by adjusting its physiological processes.

Drive-Reduction

A theory of motivation that posits that behavior is driven by the need to reduce internal states of tension caused by unmet biological needs.

Incentive

A factor that motivates or encourages someone to do something, often linked to rewards or punishments.