HW 1 - IEOR 153 HW 1 Eddie Lo 19483002 1. Textbook...

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IEOR 153 HW 1 Eddie Lo 19483002 1. Textbook Questions 2) The strategies for firms to cope with huge variability in consumer demand include good forecasting methods via information systems and collaborative forecasting; perform periodic reviews of inventory; reduce lead times; maintain a minimal amount of safety stock; pooling and risk-sharing; push inventory more quickly into the market. 3) The relationship between service and inventory levels is that a higher service level , the higher the β amount of inventory there will be (i.e., they are directly related). This relationship makes sense because the more inventory there is on hand, the easier it will be to meet a higher service level. 4) The impact of lead time and lead time variability on inventory levels is that increases in both lead time and lead time variability will cause inventory levels to increase. This is confirmed by a variation of the EOQ formula, = Q 2kDL , where L
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This note was uploaded on 05/08/2011 for the course IEOR 153 taught by Professor Staff during the Spring '08 term at University of California, Berkeley.

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