Scenario C.1 Jerry Allison Is in Charge of Production for a Small

question 30

Multiple Choice

Scenario C.1
Jerry Allison is in charge of production for a small producer of plumbing supplies. The cricket model has an estimated annual demand of 12,000 units and can be produced at a production rate of 90 units per day. The company produces (and sells) the cricket 300 days per year. Setup cost to produce this model averages $22 and the item has a holding cost of $3 per unit per year.
-Use the information in Scenario C.1. What is the maximum inventory if Jerry chooses to produce at the economic production lot size (ELS) ?

• A) fewer than or equal to 300 units
• B) greater than 300 units but fewer than or equal to 320 units
• C) greater than 320 units but fewer than or equal to 340 units
• D) greater than 340 units

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Definitions:

Bonds

Long-term debt securities issued by corporations or governments to finance operations, projects, or other capital needs, paying periodic interest and the principal amount at maturity.

Stock

Stock represents ownership shares in a corporation, giving holders a claim on part of the company's assets and earnings.

Bond Payable

A recorded obligation indicating a company must repay a borrowed sum at a set interest rate by a specified date.

Accounts Payable

Liabilities or amounts owed by a business to its creditors for goods and services that have been received but not yet paid for.