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:

Risk Assessment

Involves identifying, analyzing, and evaluating uncertainty in investment decisions.

Credit Analysis

The process of evaluating an individual's or entity's ability to repay a loan or meet financial obligations.

Default

The failure to meet the legal obligations or conditions of a loan or other financial agreement, such as not making scheduled payments.

Credit Customer

An individual or entity that purchases goods or services on credit, with an agreement to pay at a later date.