Rolf Steps Is the Production Manager for a Local Manufacturing

question 87

Multiple Choice

Rolf Steps is the production manager for a local manufacturing firm.This company produces staplers and other items.The annual demand for a particular stapler is 1,600 units.The holding cost is $2 per unit per year.The cost of setting up the production line is $25.There are 200 working days per year.The production rate for this product is 80 per day.If Rolf decided to produce 200 units each time he started production of the stapler,what would his maximum inventory level be?

• A)200
• B)180
• C)100
• D)90
• E)None of the above

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Definitions:

IMF

International Monetary Fund, an international organization aiming to foster global monetary cooperation, secure financial stability, and facilitate international trade.

Foreign Exchange

The global marketplace for buying and selling national currencies.

Purchasing Power Parity Theory

An economic theory that suggests that in the long term, exchange rates should adjust to equalize the price of identical goods and services in different countries.

Floating Exchange Rates

A system where the value of a currency is allowed to fluctuate according to the foreign exchange market without direct government control.