Using the Fixed-Time-Period Inventory Model, and Given an Average Daily

question 75

Multiple Choice

Using the fixed-time-period inventory model, and given an average daily demand of 75 units, 10 days between inventory reviews, 2 days for lead time, 50 units of inventory on hand, a service probability of 95 percent, and a standard deviation of demand over the review and lead time of 8 units, which of the following is the order quantity?

• A) 863
• B) 948
• C) 1,044
• D) 1,178
• E) 4,510

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Definitions:

GDP Deflator

An economic metric that converts output measured at current prices into constant-dollar GDP, removing the effects of inflation to compare one period with another.

Real GDP

Inflation-adjusted GDP, which presents a truer picture of an economy's magnitude and growth patterns over time.

Intermediate Products

Goods used as inputs in the production of other goods, including raw materials, components, and subassemblies.

Market Value

is the amount for which something can be sold in a given market at a particular time.