Table $5.8$ Demand $= 52,000$ Units/year
Standard Deviation of Weekly Demand $= 110$

question 7

Multiple Choice

Table $5.8$
Demand $= 52,000$ units/year
Standard deviation of weekly demand $= 110$ units
Ordering costs $= \$ 45 /$ order
Holding costs $= \$ 0.50 /$ unit $/$ year
Cycle- service level $= 90 \%$
Lead time $= 2$ weeks
Number of weeks per year $= 52$ weeks
You will need to refer to a normal table to answer the question(s) .
-Use the information in Table 5.8. A firm uses the periodic review system to control the item depicted above. It reviews the item's status every three weeks (P = 3) . At the most recent review an inventory clerk just checked the inventory of this item and found 1500 units. There were no scheduled receipts and no back orders. How many units should be ordered? (Hint: You must calculate T before answering this question.)

• A) 0 units
• B) greater than 0 but less than or equal to 3750 units
• C) greater than 3750 but less than or equal to 4000 units
• D) greater than 4000 units

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