Suppose the newsvendor model is used to manage inventories. Which of the following can happen when the order quantity is increased by one unit? a)Expected sales increases by more than one unit. b)Expected lost sales increases by more than one unit. c)Expected leftover inventory increases by more than one unit. d)Expected sales decreases by less than one unit. e)Expected lost sales decreases by less than one unit. f)Expected leftover inventory decreases by less than one unit. g)None of the above. *** Solution e) Expected lost sales decreases by less than one unit. Correct option. As the demand is uncertain hence Expected lost sales decreases by less than one unit..

1. Suppose the number of admissions to a trauma unit a hospital follows a Poisson distribution, but
the incidence rate changes for depending on what time of the week the admission occurs. It is
estimated that during the weekdays (Monday-Friday) there are 2 admission/day and that on the
weekends (Saturday and Sunday)there is 1 admission/day. a.What is the probability of at least
one admission on a Thursday? b.What is the probability of at least one admission on a Sunday?
Solution