Table $5.11$ The Following Information Has Been Collected on an Independent Demand

question 64

Multiple Choice

Table $5.11$
The following information has been collected on an independent demand item:
Demand $= 30$ units per week
(assume 52 weeks/ year)
Ordering and setup cost $= \$ 50$ perorder
Holding cost $= \$ 8$ per unit per year
Lead time $= 1$ week
Standard deviation in weekly demand $= 8$ units
Cycle- service level $= 90 \%$
You will need to refer to a normal table to answer the question(s) .
-Use the information from Table 5.11. Design a periodic review system (P system) , with P = 5 weeks. What target inventory T will provide the desired 90 percent cycle- service level?

• A) between 188 and 192 units
• B) between 53 and 57 units
• C) between 172 and 176 units
• D) between 202 and 206 units

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Definitions:

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting wear and tear, deterioration, or obsolescence.

Adjusting Entries

Journal entries made in accounting records at the end of an accounting period to update account balances before preparing financial statements.

Net Income

The residual financial benefit a company experiences after expenses and taxes are subtracted from its income.

Fiscal Year

A 12-month period used for accounting and financial reporting purposes, which may or may not align with the calendar year.