Assume That the Order Quantity Is 1000 Units,and the Holding

question 3

Multiple Choice

Assume that the order quantity is 1000 units,and the holding costs are $5 a unit per year.In this case,______.

• A)the average inventory level is 500 units,and the total annual holding costs are $2,500
• B)the average inventory level is 1,000 units,and the total annual holding costs are $5,000
• C)the average inventory level is 0 units,and the total annual holding costs are $5
• D)the average inventory level is 500 units,and the total annual holding costs are $5,000

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Definitions:

μ F

Microfarads, a unit of capacitance equal to one millionth of a farad.

Parallel Connection

A way of connecting electrical components in a circuit so that each component is directly connected to the voltage source, and the current can flow along multiple pathways.

Total Capacitance

The overall capacity of an electrical circuit to store an electric charge, often measured in farads (F).

μ F

Microfarad, a unit of capacitance equal to one millionth of a farad, used to measure the storage of electrical charge.