Table 56
Peterson Enterprises Uses a Continuous Review Inventory Control System

question 95

Multiple Choice

Table 5.6
Peterson Enterprises uses a continuous review inventory control system. The firm operates 50 weeks per year and has the following characteristics for an item:


Standard deviation in weekly demand $= 125$ units
You will need to refer to a normal table to answer the question(s) .
-Use the information in Table 5.6. What is the EOQ for this item?

• A) less than or equal to 1100 units
• B) greater than 1100 but less than or equal to 1200 units
• C) greater than 1200 but less than or equal to 1300 units
• D) more than 1300 units

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Definitions:

Binomial Probability Distribution

A statistical distribution that describes the probability of a variable adopting one of two separate values, contingent upon certain parameters or suppositions.

Defective Bulbs

Refers to lightbulbs that fail to meet the quality standards or specifications and do not function as intended.

Binomial Random Variable

A type of random variable that follows the binomial distribution, representing the number of successes in a fixed number of independent trials, each with the same probability of success.

Discrete Random Variable

A variable that can take on a countable number of distinct values, often representing the outcomes of some random process.