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- In some inventory models, the optimal behavior occurs where ordering costs and carrying costs are equal to one another. Provide an example of a model where this rule does not hold; explain how the model's results are optimal anyway.
- The Winfield Distributing Company has maintained an 80% service level policy for inventory of string trimmers. Mean demand during lead time is 170 trimmers, and the standard deviation during lead time is 60 trimmers. The annual cost of carrying one trimmer in inventory is $6. The area sales people have recently told Winfield's management that they could expect a $400 improvement in profit (based on current figures of cost per trimmer) if the service level were increased to 99%. Is it worthwhile for Winfield to make this change?
- As the corporate and operations management strategies vary from low cost to response to differentiation, how does this impact the criteria used for selecting suppliers?
- How are outsourcing and vertical integration related? Can a single firm successfully do both? All responses should be at least 200 words in length with references.
