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OIS 3660 FINAL 2026
QUESTIONS AND ANSWERS|
ACE YOUR GRADES.
NetonBe makes sweaters, which traditionally involved the
following steps: dyeing (i.e., into four different colors), knitting of
the dyed fabric into four sizes each (small, medium, large, and
extra large) and then distributing to the stores. As such, there
were 16 different sweater color & size combinations in the end,
each with a demand that is normally distributed with a mean of
1,000 and a standard deviation of 200. NetonBe has just
developed a new system that allows them to knit a generic color
sweater first, and then dyeing this generic sweater. As such, they
only need to hold safety inventory for the four sizes, each with an
average demand of 4,000 and a standard deviation of 400 (i.e.,
NOT 4*200, but sqrt(4)*200). If NetonBe wants a 95% service
level, then how much safety inventory should they have in total
across all 4 sizes? - correct answer -2,630
the safety inventory can be determined by looking at the standard
deviations and the number of different types. We thus get: 4 sizes
* 400 (the st.dev.) * 1.645 (the z-value) = 2632 ~ 2630.Notice that
the question asks for the "total across all 4 sizes", not just for one
size (which would be 400 * 1.645 = 658(x4) = 2,632
, Page | 2
At a bagel shop (similar to Einstein bagels), three employees pre-
make bagels (e.g., between 6 and 7 a.m. they make the bagels
they expect to sell between 7 and 8 a.m.). Between 7 a.m. and 8
a.m., 120 customers typically order a bagel. What should be set
as the taktzeit for the production process from 6 to 7 a.m.? -
correct answer -30 seconds
Since 120 customers want a bagel between 7 a.m. and 8 a.m., we
need to create one bagel every 30 seconds (for 120 in total). We
have 3 employees making these bagels, each of them has 90
seconds for each bagel, such that on average a bagel should be
created every 30 seconds (i.e., the taktzeit!).
Management has just decided to increase the service level from
90% to 99% (i.e., a 10% increase) to be better able to follow the
competition. As a result of this 10% relative increase, the safety
stock will increase by what percentage? - correct answer -82%
from the formula sheet, the safety stock equals (?). The question
mentions nothing about changing sigma or the lead time (so sand
ndo not change, only 푧ଵିఈchanges). For a service level of 90%,
the z-value is 1.28, found by using the z-table or the Excel
formula "=NORM.S.INV(0.90)". For a service level of 99%, the z-
value is 2.33 -notice that both of these values are highlighted in
the formula sheet. As such, the increase in safety stock is (2.33-
1.28)=1.05, which is an 82% increase over the original value of
1.28 (take 1.05 and divide by 1.28 to get 0.82).
, Page | 3
We are facing unpredictable demand and we currently offer a
service level of 90%. If we want to increase our service level to
95%, then what would be the effect on the reorder point? - correct
answer -The safety stock increases, so we should order sooner
(i.e., when the inventory position is higher)
when we increase the service level, the safety stock (which the
formula sheet tells us is given by: "Where 1 -a is the service
level") will increase (since the z-value will increase from 1.28 to
1.645). Therefore, the reorder point will increase, so we need to
order sooner.
One of the most-often sold items at a grocery store is bread. The
daily demand for bread at a local grocery store is 4,000 loafs that
sell for $2 each. The standard deviation in demand is 1,000 bags
daily, and the holding costs can be estimated at 5% per day (i.e.,
some cost of having to throw out loafs of bread that have passed
their sell-by date). The cost for an order is $200 paid to the baker
(who needs two days to deliver a new batch). Determine the
reorder point for a 97.5% service level. - correct answer -10,770
8,000 is the average demand over the lead time, 2,770 is the
safety stock (which is NOT equal to the reorder point), so the
reorder point is 10,770.
OIS 3660 FINAL 2026
QUESTIONS AND ANSWERS|
ACE YOUR GRADES.
NetonBe makes sweaters, which traditionally involved the
following steps: dyeing (i.e., into four different colors), knitting of
the dyed fabric into four sizes each (small, medium, large, and
extra large) and then distributing to the stores. As such, there
were 16 different sweater color & size combinations in the end,
each with a demand that is normally distributed with a mean of
1,000 and a standard deviation of 200. NetonBe has just
developed a new system that allows them to knit a generic color
sweater first, and then dyeing this generic sweater. As such, they
only need to hold safety inventory for the four sizes, each with an
average demand of 4,000 and a standard deviation of 400 (i.e.,
NOT 4*200, but sqrt(4)*200). If NetonBe wants a 95% service
level, then how much safety inventory should they have in total
across all 4 sizes? - correct answer -2,630
the safety inventory can be determined by looking at the standard
deviations and the number of different types. We thus get: 4 sizes
* 400 (the st.dev.) * 1.645 (the z-value) = 2632 ~ 2630.Notice that
the question asks for the "total across all 4 sizes", not just for one
size (which would be 400 * 1.645 = 658(x4) = 2,632
, Page | 2
At a bagel shop (similar to Einstein bagels), three employees pre-
make bagels (e.g., between 6 and 7 a.m. they make the bagels
they expect to sell between 7 and 8 a.m.). Between 7 a.m. and 8
a.m., 120 customers typically order a bagel. What should be set
as the taktzeit for the production process from 6 to 7 a.m.? -
correct answer -30 seconds
Since 120 customers want a bagel between 7 a.m. and 8 a.m., we
need to create one bagel every 30 seconds (for 120 in total). We
have 3 employees making these bagels, each of them has 90
seconds for each bagel, such that on average a bagel should be
created every 30 seconds (i.e., the taktzeit!).
Management has just decided to increase the service level from
90% to 99% (i.e., a 10% increase) to be better able to follow the
competition. As a result of this 10% relative increase, the safety
stock will increase by what percentage? - correct answer -82%
from the formula sheet, the safety stock equals (?). The question
mentions nothing about changing sigma or the lead time (so sand
ndo not change, only 푧ଵିఈchanges). For a service level of 90%,
the z-value is 1.28, found by using the z-table or the Excel
formula "=NORM.S.INV(0.90)". For a service level of 99%, the z-
value is 2.33 -notice that both of these values are highlighted in
the formula sheet. As such, the increase in safety stock is (2.33-
1.28)=1.05, which is an 82% increase over the original value of
1.28 (take 1.05 and divide by 1.28 to get 0.82).
, Page | 3
We are facing unpredictable demand and we currently offer a
service level of 90%. If we want to increase our service level to
95%, then what would be the effect on the reorder point? - correct
answer -The safety stock increases, so we should order sooner
(i.e., when the inventory position is higher)
when we increase the service level, the safety stock (which the
formula sheet tells us is given by: "Where 1 -a is the service
level") will increase (since the z-value will increase from 1.28 to
1.645). Therefore, the reorder point will increase, so we need to
order sooner.
One of the most-often sold items at a grocery store is bread. The
daily demand for bread at a local grocery store is 4,000 loafs that
sell for $2 each. The standard deviation in demand is 1,000 bags
daily, and the holding costs can be estimated at 5% per day (i.e.,
some cost of having to throw out loafs of bread that have passed
their sell-by date). The cost for an order is $200 paid to the baker
(who needs two days to deliver a new batch). Determine the
reorder point for a 97.5% service level. - correct answer -10,770
8,000 is the average demand over the lead time, 2,770 is the
safety stock (which is NOT equal to the reorder point), so the
reorder point is 10,770.
