A firm implements the order-up-to model with weekly ordering. In week 11, it observes that demand is
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Question:
A firm implements the order-up-to model with weekly ordering. In week 11, it observes that demand is much lower than expected demand. At the start of week 12 (before it orders), it decides to change its forecast of demand per week and consequently it lowers its order-up-to level. Its order in week 12 will
1. Be less than the demand it observed in week 11
2. Equal the demand it observed in week 11
3. Greater than the demand it observed in week 11
4. Equal the change in the order-up-to level from week 11 to week 12
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