In the EOQ Model with Planned Shortages,if Annual Demand Is

question 71

Multiple Choice

In the EOQ model with planned shortages,if annual demand is 500,holding cost is $200,ordering cost is $15,and back-order cost is $400,the quantity back-ordered per replenishment cycle,rounded to the next whole number,is:

• A)3
• B)4
• C)5
• D)12
• E)38

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Definitions:

Interest

The cost of borrowing money, typically expressed as a percentage of the amount borrowed, paid over a specified period.

Entrusts

To give someone the responsibility to take care of something or act on one's behalf.

Merchant

An individual or business entity engaged in the trade of goods, services, or both to consumers, primarily for earning a profit.

Original Owner

Refers to the first owner or possessor of an item or property after it was created or came into being.