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{{ block title }}Instructions Page 4{{ endblock }}

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<p>
    Next, you will have the options of changing your order for each product
</p>
<img src="{% static "Distributions/Instructions2.jpg" %}" width="600px"/> 

<p>
 If you decide to change the order for this product, you will be able to do so in the next page. Once all final product orders are made, actual demand will be realized and profits per round calculated.    
</p>
<p>
Deciding on the order size for each of the 12 products should be based on the likelihood that you will have enough inventory to meet customer demand.  This likelihood is often called your service level and should be based on balancing the profit from missed sales opportunities (i.e., cost of underage) with the cost of ordering units of a product that do not sell (cost of overage).  In general, order size, and thus your expected service level, should increase when the cost of underage is higher than the cost of overage.  The service level that balances these two costs can be estimated as follows:
</p>
<img src="{% static "Distributions/SL1.jpg" %}" width="500px"/> 
<p>
 For demand that is normally distributed, we can estimate our order size based on the desired service level.  The “cumulative percentages” in the figure below are estimates of the likelihood that you will meet demand when ordering a given number of standard deviations above or below the average.  In the example, the forecasted average demand was 100 units and the standard deviation of demand was 10 units.  Based on the figure below, we would expect a service level of 16% if we ordered 90 units (i.e., one standard deviation below the average demand) and 84% if we ordered 110 units (i.e., one standard deviation above the average demand). 
</p>
<img src="{% static "Distributions/NormalCurve.png" %}" width="600px"/> 

<p>
    The distribution information above can be found at this link (copy into a new browser window).   tiny.utk.edu/inventory
</p>
<p>
 Before starting the actual experiment, you will practice ordering for three products. These will not count towards your payout. During these rounds, you will be asked what parameters (mean, standard deviation, and purchase price) have been changed. You can select multiple of these for each question- please select all that apply. 
</p>
<p>
 Your cash payout for the experiment will be calculated by summing the total profit you make for all products and multiplying it by 0.00002.    
</p>
<p>
If you have any questions during the experiment, please raise your hand and the administrator will come to you.  
</p>
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