It is costly to hold inventory, but inventory can also be useful in a process because a. adding inventory to a process will shorten the average time a unit spends in a process. b. adding inventory to a process can help reduce situations in which sales are lost due to uncertain demand. c. adding inventory to a process is likely to increase quality. d. adding inventory to a process will increase the profit margin of the item.

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Answer 1

Textbook Question

Chapter 10, Problem 1CQ

It is costly to hold inventory, but inventory can also be useful in a process because

a. adding inventory to a process will shorten the average time a unit spends in a process.
b. adding inventory to a process can help reduce situations in which sales are lost due to uncertain demand.
c. adding inventory to a process is likely to increase quality.
d. adding inventory to a process will increase the profit margin of the item.

Expert Solution & Answer

Summary Introduction

To determine: The advantage of using inventory.

Explanation of Solution

Determine the advantage of using inventory:

Even though holding inventory costs for the firm, it will be useful for the company to avoid stock-outs. Adding inventory helps the firm to manage the situation in which the products go out-of-stock due to uncertain demand. It might lead to loss of sales. Adding inventory helps to avoid this.

Hence, option (b) is correct and options (a), (c), and (d) are incorrect.

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Sales of tablet computers at Marika Gonzalez's electronics store in Washington, D.C., over the past 10 weeks are shown in the table below: Week 1 2 3 4 5 6 7 8 9 10 Demand 21 21 27 38 25 30 35 24 25 30 a) The forecast for weeks 2 through 10 using exponential smoothing with a = 0.50 and a week 1 initial forecast of 21.0 are (round your responses to two decimal places): Week 1 2 3 4 5 6 7 8 9 10 Demand 21 21 27 38 25 30 35 24 25 30 Forecast 21.0 21 21 24 31 28 29 32 28 26.50 b) For the forecast developed using exponential smoothing (a = 0.50 and initial forecast 21.0), the MAD = |||||sales (round your response to two decimal places).

Sales of tablet computers at Marika Gonzalez's electronics store in Washington, D.C., over the past 10 weeks are shown in the table below: Week Demand 1 2 3 4 5 6 7 8 9 10 21 21 27 38 25 30 35 24 25 30 a) The forecast for weeks 2 through 10 using exponential smoothing with a = 0.50 and a week 1 initial forecast of 21.0 are (round your responses to two decimal places): Week 1 2 3 4 5 Demand 21 21 27 38 Forecast 21.0 ☐ G ☐ ☐ 6 7 25 30 35 ∞ ☐ 8 9 10 24 25 30

Each machine costs $3 Million. Building the room with all its attendant safety protection and other ancillary costs increases the spending by an additional $2.0 million dollars per MRI suite. Each machine can perform 2000 scans per year. Each reading of an MRI scan by a radiologist, along with other per-scan-related costs, is $500 per scan. The machine will last five years. Don’t worry about discount rates for this problem Graph the total costs over 5 years as a function of sales for 0-3000 patients annually. Hint: you may need to add a second MRI at some point. Suppose that you want to make a profit of $500 per scan at a target volume of 1000 patients per year, and you purchase only one machine. Superimpose the total revenue curve on top of the total cost curve in (1).

Answer 2

Textbook Question

Chapter 10, Problem 1CQ

It is costly to hold inventory, but inventory can also be useful in a process because

a. adding inventory to a process will shorten the average time a unit spends in a process.
b. adding inventory to a process can help reduce situations in which sales are lost due to uncertain demand.
c. adding inventory to a process is likely to increase quality.
d. adding inventory to a process will increase the profit margin of the item.

Expert Solution & Answer

Summary Introduction

To determine: The advantage of using inventory.

Explanation of Solution

Determine the advantage of using inventory:

Even though holding inventory costs for the firm, it will be useful for the company to avoid stock-outs. Adding inventory helps the firm to manage the situation in which the products go out-of-stock due to uncertain demand. It might lead to loss of sales. Adding inventory helps to avoid this.

Hence, option (b) is correct and options (a), (c), and (d) are incorrect.

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Answer 3

Textbook Question

Chapter 10, Problem 1CQ

It is costly to hold inventory, but inventory can also be useful in a process because

a. adding inventory to a process will shorten the average time a unit spends in a process.
b. adding inventory to a process can help reduce situations in which sales are lost due to uncertain demand.
c. adding inventory to a process is likely to increase quality.
d. adding inventory to a process will increase the profit margin of the item.

Expert Solution & Answer

Summary Introduction

To determine: The advantage of using inventory.

Explanation of Solution

Determine the advantage of using inventory:

Even though holding inventory costs for the firm, it will be useful for the company to avoid stock-outs. Adding inventory helps the firm to manage the situation in which the products go out-of-stock due to uncertain demand. It might lead to loss of sales. Adding inventory helps to avoid this.

Hence, option (b) is correct and options (a), (c), and (d) are incorrect.

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Answer 4

Textbook Question

Chapter 10, Problem 1CQ

It is costly to hold inventory, but inventory can also be useful in a process because

a. adding inventory to a process will shorten the average time a unit spends in a process.
b. adding inventory to a process can help reduce situations in which sales are lost due to uncertain demand.
c. adding inventory to a process is likely to increase quality.
d. adding inventory to a process will increase the profit margin of the item.

Expert Solution & Answer

Summary Introduction

To determine: The advantage of using inventory.

Explanation of Solution

Determine the advantage of using inventory:

Even though holding inventory costs for the firm, it will be useful for the company to avoid stock-outs. Adding inventory helps the firm to manage the situation in which the products go out-of-stock due to uncertain demand. It might lead to loss of sales. Adding inventory helps to avoid this.

Hence, option (b) is correct and options (a), (c), and (d) are incorrect.

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

Summary Introduction

To determine: The advantage of using inventory.

Explanation of Solution

Determine the advantage of using inventory:

Even though holding inventory costs for the firm, it will be useful for the company to avoid stock-outs. Adding inventory helps the firm to manage the situation in which the products go out-of-stock due to uncertain demand. It might lead to loss of sales. Adding inventory helps to avoid this.

Hence, option (b) is correct and options (a), (c), and (d) are incorrect.

Answer 8

Expert Solution & Answer

Summary Introduction

To determine: The advantage of using inventory.

Explanation of Solution

Determine the advantage of using inventory:

Even though holding inventory costs for the firm, it will be useful for the company to avoid stock-outs. Adding inventory helps the firm to manage the situation in which the products go out-of-stock due to uncertain demand. It might lead to loss of sales. Adding inventory helps to avoid this.

Hence, option (b) is correct and options (a), (c), and (d) are incorrect.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Summary Introduction

To determine: The advantage of using inventory.

Answer 12

Explanation of Solution

Determine the advantage of using inventory:

Even though holding inventory costs for the firm, it will be useful for the company to avoid stock-outs. Adding inventory helps the firm to manage the situation in which the products go out-of-stock due to uncertain demand. It might lead to loss of sales. Adding inventory helps to avoid this.

Hence, option (b) is correct and options (a), (c), and (d) are incorrect.

Answer 13

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