Table $5.4$ A Company Operating Under a Continuous Review System Has an Has

question 113

Multiple Choice

Table $5.4$
A company operating under a continuous review system has an average demand of 50 units per week for the item it produces. The standard deviation in weekly demand is 20 units. The lead time for the item is 6 weeks, and it costs the company $\$ 30$ to process each order. The holding cost for each unit is $\$ 10$ per year. The company operates 52 weeks per year. You will need to refer to a normal table to answer the question(s) .
-Use the information in Table 5.4. What is the reorder point if the company finally decides to have a 95 percent cycle- service level?

• A) less than or equal to 300 units
• B) greater than 300 but less than or equal to 325 units
• C) greater than 325 but less than or equal to 350 units
• D) greater than 350 units

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Definitions:

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A visual representation tool that summarizes complex decision logic by listing possible conditions and actions or outcomes in a table format.

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Software used for predictive modeling, simulation, and forecasting, often utilized in financial analysis and project management.

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A software or method used in risk management to predict and evaluate future events by creating plausible and varied sets of assumptions.

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A metaphorical term often used to describe the attempt to predict or foresee future events, typically with uncertainty.