Your Firm Uses a Continuous Review System (Q System), Where $= 14,560$

question 106

Multiple Choice

Your firm uses a continuous review system (Q system) , where the inventory position is updated after every transaction. The firm operates 52 weeks per year. One of the items has the following characteristics:
Demand $= 14,560$ units per year
Ordering cost $= \$ 40$ per order
Holding cost $= \$ 6$ per unit
per year Lead time $= 2$ weeks
Standard deviation in weekly demand $= 100$ units
Cycle-service level $= 80$ percent
If Q is made equal to the EOQ, what are the desired values for Q and R?

• A) Q is between 65 and 69, and R is between 362 and 366.
• B) Q is between 439 and 443, and R is between 559 and 563.
• C) Q is between 439 and 443, and R is between 678 and 682.
• D) Q is between 65 and 69, and R is between 398 and 402.

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Definitions:

Core Competencies

Unique strengths and abilities that a company or an individual possesses which distinguish them from competitors.

Operating Efficiencies

The ratio of productive output to operational inputs, reflecting the effectiveness and economy with which resources are utilized in production.

Multidomestic Strategy

A business strategy where a company adapts its products, marketing, and operations to suit specific local markets in each country it operates.

Customizes Products

The act of modifying products to meet the preferences or requirements of different customers.