The Annual Demand for a Product Has Been Projected at 2,000

question 36

Multiple Choice

The annual demand for a product has been projected at 2,000 units.This demand is assumed to be constant throughout the year.The ordering cost is $20 per order,and the holding cost is 20 percent of the purchase cost.The purchase cost is $40 per unit.There are 250 working days per year.Whenever an order is placed,it is known that the entire order will arrive on a truck in 6 days.Currently,the company is ordering 500 units each time an order is placed.What level of safety stock would give a reorder point of 60 units?

• A)10
• B)14
• C)18
• D)12
• E)22

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Definitions:

Classical Conditioning

An educational method involving the frequent pairing of two cues; a response initially prompted by the second cue comes to be prompted by the first cue in isolation.

Ivan Pavlov

A Russian physiologist known for his work in classical conditioning, demonstrating how stimuli can trigger reflexive responses.

Classical Conditioning

A learning process that occurs when two stimuli are repeatedly paired together; a response that is initially elicited by the second stimulus is eventually elicited by the first stimulus alone.

Unconditioned Stimulus

In classical conditioning, it's a stimulus that naturally and automatically triggers a response without any learning needed.