Short Answer Questions Word Limit for each question: 50-100 Inventory Questions Why would a firm keep any safety stock when, according to the EOQ, anything other than Q* would be suboptimal? Are there situations when a firm is better off not being so lean? If businesses can/should employ EOQ models to maximize profit (minimize cost), then why do retailers such as Costco and Sam’s promote bulk/large quantity buying? Shouldn’t an individual/family operate similarly as a business? Forecasting Questions Why would or should we use statistical forecasting models and other models such as the EOQ model of inventory from Week 4? Should conceptual and statistical models be used independently or simultaneously? Why? Should a manager consider the economic cycle for the company or industry when employing forecasting models? How much should the models counter or override any management optimism or pessimism (experience/instinct)? Why use forecasting models such as moving average or exponential smoothing if they are expected to have errors?
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