1. What is the ideal value/range for the ratio of demand variability to order variability? Why?
2. Amazon recently added its own vehicles for package delivery. Discuss this sourcing decision and the logic behind it.
3. Imagine a firm purchases 800 units of raw material at a price of $6 per unit at the beginning of a specific year. At the middle of the year, they realize that they need more raw material, and they purchase an additional 400 units at a price of $9 per unit. Calculate the average purchase price for that raw material for that year.