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

question 18

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 economic order quantity (EOQ) for this item?

• A) less than or equal to 175 units
• B) greater than 175 units but less than or equal to 200 units
• C) greater than 200 units but less than or equal to 225 units
• D) greater than 225 units

---

Definitions:

Unit Cost

The total expense incurred in producing, storing, and selling one unit of a product or service.

Yield Management

A strategy used in various industries to maximize revenue by adjusting prices based on expected demand and supply constraints.

Operations Management

The field of management concerned with designing, overseeing, and controlling the process of production and redesigning business operations in the production of goods or services.

Demand Curve

A graph that shows the relationship between the price of a good or service and the quantity demanded by consumers.