Weekly Demand for a Particular Item Averages 30 Units, with a Standard

question 108

Multiple Choice

Weekly demand for a particular item averages 30 units, with a standard deviation of 4. This item is managed with a fixed-order-interval model. The order interval is three weeks, and this item has a certain lead time of one week. The desired service level is 97.5 percent. Assume that it is now time to place another order, and there are 43 units on hand. How many units should be ordered?

• A)120
• B)93
• C)136
• D)46
• E)84

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Definitions:

Credit Bureaus

Agencies that collect and maintain individual credit information for issuing credit scores and reports to potential creditors.

Receivables Policy

A set of practices a company uses to manage its accounts receivable, which includes how it extends credit and collects debts.

Due Dates

Specific dates by which obligations, such as bill payments or assignments, must be fulfilled or submitted.

Trade Credit

It is a type of commercial financing in which a buyer is allowed to purchase goods or services and pay the supplier at a later scheduled date.