Titan Company, a Distributor of High Quality Pens, Carries a Safety

question 33

Multiple Choice

Titan Company, a distributor of high quality pens, carries a safety stock of pens. If the maximum daily usage is 70, the average daily rate of usage is 50 pens per day and the number of lead days of 5 required by the supplier. What is the re-order point for ordering pens?

• A) 250 pens
• B) 350 pens
• C) 100 pens
• D) 50 pens

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Definitions:

Convertible Preferred Shareholders

Shareholders who own shares that can be converted into a fixed number of common shares, usually at the discretion of the shareholder.

Increased Profits

A situation where a company's earnings exceed its previous earnings over a certain period, indicating improved financial performance.

Rich Vein of Gold

Refers to a significant and high-quality deposit of gold ore.

Dividends

Earnings from a corporation distributed to its shareholders, usually from its profits.