Multiple Choice Questions 1. Groceries-R-Us (G-R-U) is currently imptementing a cominuous review poliey for the extra-bright toothpasie as its Dallas distribution center. Average daily demand for toothpaste is 100 cases with a standard devianion of 20. cases. The foothpase supplier has a detivery lead time of 4 days. If the retailer is using a re-order point of 442 . what is the in-stock probability during the delivery lead time before the next ahipment arrives? a. About 5% b. About 75% c. About 15\%s d. About 25\%: c. About 85% 2. Groceries-R-Us (G-R-U) is currently implementing a continuous review policy for the extra-bright toothpaste al its Dallas distribution center. A verage daily demand for toothpaste is 100 cases with a standard deviation of 20) cases. The toothpaste supplier to GR-U has a delivery lead time of 4 days. The current inventory management policy provides a 70% service level (in-stock probability). If the retailer decides to triple the current safety stock level, what will be the new service level? a. About 94% b. About 85% c. About 75\% d. About 6% e. About 15\% 3. In a newsvendor setting, if the unit cost of underage is greater than the unit cost of overage, which one of the following is true: a. Optimal order quantity is greater than the median demand b. Optimal order quantity is equal to the median demand c. Optimal order quantity is less than the median demand d. Need more info. 4. Consider two products A and B that have identical unit cost, retail price and demand parameters and the same short selling season (the summer months from May through August). The newsvendor model is used to manage inventory for both products. Product A is to be discontinued at the end of the season this year, and the leftovers will be salvaged at 85% of the unit cost. Product B will be re-offered next summer, so any leftovers this year can be carried over to the next year while incurring a cost of capital of 18%. Which one of the following statements is true? a. Stocking quantity of product A is lower than stocking quantity of product B b. Stocking quantity of product A is higher than stocking quantity of product B c. The stocking quantity of both products will be identical. d. Need more info