Using the Fixed-Time-Period Inventory Model, and Given an Average Daily

question 65

Multiple Choice

Using the fixed-time-period inventory model, and given an average daily demand of 200 units, 4 days between inventory reviews, 5 days for lead time, 120 units of inventory on hand, a z of 1.96, and a standard deviation of demand over the review and lead time of 3 units, which of the following is the order quantity?

• A) About 1,086
• B) About 1,686
• C) About 1,806
• D) About 2,206
• E) About 2,686

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Definitions:

Variability

How much the data points in a statistical distribution or dataset deviate from the mean or average.

Data Sets

Collections of related data points, observations, or variables organized for analysis.

Sources of Cash

Various origins from which a company or individual may receive cash, such as operations, financing activities, and investing activities.

Cash and Accounts Receivable

Liquid assets comprising of cash available and money owed by customers to a company for goods or services provided.