Management Wishes to Use a FOQ Lot- Sizing Rule for an Item

question 97

Multiple Choice

Management wishes to use a FOQ lot- sizing rule for an item based on the economic order quantity. If the annual demand is 1200 units, the holding cost is $10/unit/year, and the setup cost is $50/lot, which one of the following fixed order quantities is most appropriate?

• A) 90 units
• B) 110 units
• C) 130 units
• D) 150 units

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Definitions:

Transmission

The action or process of transmitting something or the state of being transmitted, such as data, diseases, or genetic traits.

Interpretation

The act or process of explaining the meaning of something; often applies to text, actions, or events.

Secondary Xylem

The part of a plant that transports water and nutrients from the roots to the shoots and leaves and provides support, formed after the primary xylem.

Vascular Cambium

A layer of tissue in plants that produces new vascular tissue, contributing to the plant's secondary growth.