A Particular Brand of Soap Has a Lead Time of Three

question 42

Multiple Choice

A particular brand of soap has a lead time of three weeks to reorder,a weekly standard deviation of 10 units,and a weekly average usage of 30 units.The reorder point for this soap,assuming a 95% service level (z = 1.645) ,is

• A) 16.45 units.
• B) 28.50 units.
• C) 106.45 units.
• D) 118.49 units.

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Definitions:

Expected Value

The long-run average value of repetitions of the experiment it represents, essentially a mean of a random variable in probability and statistics.

Probability

The quantification of the probability of an event happening, expressed as a numeric value ranging from 0 to 1.

Hurdle Rate

The minimum rate of return on an investment required by a manager or investor to proceed with the project.

IRR

Internal Rate of Return; a financial metric used to evaluate the profitability of investments.