Scenario 9.1 Shipments of Product a from a Distribution Center to a to a Retailer

question 145

Multiple Choice

Scenario 9.1
Shipments of Product A from a distribution center to a retailer are made in lots of 350. The retailer's average demand for Product A is 75 units per week. The lead time from distributor to retailer is 3 weeks. The retailer pays for the shipments when they leave the distributor. The distributor has agreed to reduce the lead time to 2 weeks if the retailer will purchase quantities of 400 per shipment instead of 350 units per shipment.
-Refer to Scenario 9.1. The net impact on the retailer will be:

• A) no net change in average cycle and pipeline inventories.
• B) a net average increase in cycle and pipeline inventories of 50 units.
• C) a net average decrease in cycle and pipeline inventories of 75 units.
• D) a net average decrease in cycle and pipeline inventories of 50 units.

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Definitions:

Negative Reinforcement

A process that strengthens a behavior by removing or reducing an undesirable outcome when the behavior is performed.

Positive Reinforcement

The process of increasing the likelihood of a behavior by following it with the addition of a pleasurable stimulus or reward.

Negative Punishment

A behavior modification technique involving the removal of a desirable stimulus after a particular behavior is exhibited, with the intention of decreasing that behavior.

Positive Punishment

An operant conditioning principle where the introduction of an unfavorable outcome or stimulus following a behavior decreases the likelihood of the behavior occurring again.