Suppose that a firm's cost of capital is 12% per year and the purchase cost of an item is X dollars per unit. What is the inventory holding cost per month per unit? a. 0.12X b. 0.1X c. 0.01X d. 1X 2. (1 point) What is the bullwhip effect? a. A phenomenon in which the downstream partner has a higher operating cost than the upstream one in a supply chain. b. A phenomenon in which the variability of demand amplifies when moving toward the upstream of a supply chain. c. A phenomenon in which the upstream firm tends to be vulnerable to disruptions. d. A phenomenon in which the downstream firm finds it more difficult to predict demand. 3. (1 point) Which of the following is NOT a cause that leads to the bullwhip effect? a. Batch ordering b. Shortage gaming c. Short lead times d. Demand forecasting and signaling 4. (1 point) Consider the newsvendor model with normal demand. Suppose the penalty of inventory shortage increases. All else being equal (i.e., holding everything else constant), the optimal order quantity will: a. Increase b. Decrease c. It depends