Using the POQ Method of Ordering, Calculate the Total Cost

question 5

Multiple Choice

Using the POQ method of ordering, calculate the total cost of carrying and ordering inventory for the 6 week period shown. Use a POQ = 3 weeks for your answer.
$$\begin{array} { l c c c c c c } \text { Week } & 1 & 2 & 3 & 4 & 5 & 6 \\\text { Net requirements } & 60 & 40 & 10 & 50 & 20 & 30 \\\text { Planned order receipts } & & & & & & \\\text { Ending inventory } & & & & & &\end{array}$$
Cost to place an order = $100.00
Cost to carry inventory = $1.00 per unit per week
Annual demand = 1,500 units
Cost per unit = $200.00
Opening inventory = 0 units

• A) $140
• B) $280
• C) $340
• D) $400
• E) none of the above

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Definitions:

Cardiovascular

Relating to the heart and blood vessels and their functions in circulating blood throughout the body.

Negative Feedback

A regulatory mechanism in which a stimulus causes an opposite output in order to maintain an ideal level of whatever is being regulated.

Effector

A muscle, gland, or organ that responds to a stimulus from the nervous system by producing a specific effect or action.

Receptor

Structural protein or glycoprotein molecule on the cell surface or within the cytoplasm that binds to a specific factor (chemical signal).