Using the Data Regarding the Inventory Management of a Stock-Keeping

question 15

Multiple Choice

Using the data regarding the inventory management of a stock-keeping unit shown in the following table, it can be concluded that the economic time interval for establishing an optimal policy for a fixed-period system (FPS) under the model assumptions is:
$\begin{array} { | l | l | } \hline \text { Demand } & 12,000 \text { units per year } \\\hline \text { Order Cost } & \$ 50 \text { per order } \\\hline \text { Inventory-Holding Cost } & \$ 0.5 \text { per unit per year } \\\hline \text { Lead Time } & 2 \text { weeks } \\\hline \text { Standard Deviation in Weekly Demand } & 7 \\\hline \text { Service Level } & 95 \text { percent } \\\hline\end{array}$

• A) less than or equal to 3 weeks.
• B) more than 3 weeks but less than or equal to 6 weeks.
• C) more than 6 weeks but less than or equal to 9 weeks.
• D) more than 9 weeks.

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Definitions:

Non-Controlling Interest

The portion of equity in a subsidiary not owned directly or indirectly by the parent company.

Fair Value Enterprise Method

A valuation method where a business is valued based on the present value of its projected future earnings or cash flows, adjusted to their market value.

Consolidated Balance Sheet

A financial statement showing the combined assets, liabilities, and equity of a parent company and its subsidiaries as if they were a single entity.

Fair Value Enterprise Method

An approach to valuation that estimates the price at which an entire business would exchange between knowledgeable and willing parties.