Table 5.2 Consider the Following Data for an Independent Demand Item Maintained

question 34

Multiple Choice

Table 5.2
Consider the following data for an independent demand item maintained by Vicki Crittenden, the proprietor of a local auto repair shop:
Weekly demand = 50 units
Ordering cost = $8/order
Holding cost = $4/order
Weeks in a year = 50
-Use the information in Table 5.2.Due to new ordering procedures initiated by Crittenden,the ordering cost is dropping to $4/order.At the same time,the weekly demand increases to 64 units per week due to an increase in business.What effect do these changes have on the EOQ quantity for this item?

• A) The EOQ quantity remains unchanged.
• B) The EOQ quantity increases by 20 percent.
• C) The EOQ quantity decreases by 20 percent.
• D) Sufficient information is not available for answering this question.

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Definitions:

Professional Partnership

A business organization formed by two or more professionals, such as lawyers or doctors, to provide services within their expertise.

Officers

Individuals appointed or elected to manage and direct the affairs of an organization, corporation, or governmental entity.

Members of the Board

Individuals elected or appointed to oversee the activities and governance of a company or organization, making strategic decisions.

Officers

Individuals appointed by a company's board of directors who are responsible for the day-to-day operations of the company.