In the EOQ Model with Planned Shortages,if Annual Demand Is

question 71

Multiple Choice

In the EOQ model with planned shortages,if annual demand is 500,holding cost is $200,ordering cost is $15,and back-order cost is $400,the quantity back-ordered per replenishment cycle,rounded to the next whole number,is:

• A)3
• B)4
• C)5
• D)12
• E)38

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Definitions:

Certification Test

An examination designed to certify competency, knowledge, or proficiency in a particular field or profession.

Multiplication Rule

A principle in probability that determines the likelihood of two independent events occurring together by multiplying their individual probabilities.

Probability

The measure of the likelihood that an event will occur.

Posterior Probability

The revised probability of an event occurring after taking into consideration new information.