Jae's Shoes Is Considering a Change of Their Current Inventory

question 32

Multiple Choice

Jae's Shoes is considering a change of their current inventory control system for sneakers.The information regarding the neckties is: Demand = 1000 pairs/week; Lead time = 3 weeks; Order cost = $20/order; Holding cost = $10.00/pair/yr; Cycle service level = 95%; Standard deviation of weekly demand = 48; and Number of weeks per year = 52.To calculate the relative frequency use the following values: _____.

• A) Number of Days and Standard Deviation of Weekly Demand
• B) Units Sold and Demand
• C) Units Sold and Number of Days
• D) Lead Time and Holding Cost

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Definitions:

Total Cost

The complete amount of expenses incurred by a business in producing goods or services, including both fixed and variable costs.

Quantity Change

An alteration in the amount of goods or services supplied or demanded in a market.

Average Fixed

The fixed costs of production divided by the quantity of output produced, illustrating how those costs are spread over output.

Average Fixed Cost

The fixed costs of production divided by the quantity of output produced.