Olga Company Has an Economic Order Quantity for Item B

question 78

Multiple Choice

Olga Company has an economic order quantity for item B of 100 units. The annual demand for the product is 1,400 units, and the unit carrying cost per year is $7. The company operates 200 days a year, the lead time for the item is ten days, and the safety stock is 100 units.
What is the reorder point?

• A)70 units
• B)100 units
• C)1000 units
• D)170 units

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Definitions:

Craft Union

A labor union of workers who practice the same craft or trade, aimed at securing better wages, hours, and working conditions.

Trade Association

An organization founded and funded by businesses that operate in a specific industry to promote and protect their common interests.

Permanent Replacement Workers

Employees hired on a permanent basis to substitute for workers who are on strike, ensuring continued operations.

Purchasing Power

The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy.