Using the Fixed-Time-Period Inventory Model, and Given an Average Daily

question 38

Multiple Choice

Using the fixed-time-period inventory model, and given an average daily demand of 15 units, 3 days between inventory reviews, 1 day for lead time, 30 units of inventory on hand, a service probability of 98 percent, and a standard deviation of daily demand is 3 units, which of the following is the order quantity?

• A) About 30.4
• B) About 36.3
• C) About 42.3
• D) About 56.8
• E) About 59.8

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Definitions:

Intersegment Sales

Transactions of goods or services between segments of the same company, which are used for internal accounting purposes.

Consolidated Revenue

The total revenue recognized from the combined operations of a parent company and its subsidiaries, after inter-company transactions have been eliminated.