Daily Demand for Fresh Cauliflower in the ZZ-Warehouse Store Follows

question 52

Multiple Choice

Daily demand for fresh cauliflower in the ZZ-Warehouse store follows normal distribution with mean 100 cartons and s.d.20 cartons.The ZZ-Warehouse buys at a cost of $50.00 per carton, sells it for $70.00 per carton.Unsold cartons are sold for $20.00 per carton.What is the optimal order quantity, using the single period model?

• A) 100
• B) 80
• C) 95
• D) 110
• E) 105

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Definitions:

Direct Labor Hours

The total hours worked by employees directly involved in the manufacturing process of a company's products.

Finishing Rate

The pace at which a production process or construction project is completed, often measured in units per hour or days per project phase.

Machine Hours

A measure of the amount of time a machine is operated, used in cost accounting to allocate expenses to products.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to related products and services based on their use of activities.