For a Given Item Controlled by a Periodic Review System

question 39

Multiple Choice

For a given item controlled by a periodic review system the target level is 100 units. If there are 40 units on the shelf and the lead time is 2 weeks then the order quantity should be:

• A) 140 units
• B) 120 units
• C) 85 units
• D) 60 units
• E) 40 units

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Definitions:

Standard Deviation

A statistic that measures the dispersion or variation of a set of values from its mean, indicating how spread out the values are.

Beta

A measure of a stock's volatility in relation to the overall market; a beta higher than 1 indicates higher volatility than the market.

Morningstar's RAR

Refers to Morningstar's Risk-Adjusted Return, a calculation used to evaluate the performance of an investment by adjusting for its risk.

Performance Measures

Criteria or metrics used to assess, compare, and track the efficiency, effectiveness, or success of an investment or business operation.