You Would Like to Use the Fixed-Time-Period Inventory Model to Compute

question 62

Multiple Choice

You would like to use the fixed-time-period inventory model to compute the desired order quantity for a company. You know that vendor lead time is 5 days and the number of days between reviews is 7. Which of the following is the standard deviation of demand over the review and lead time if the standard deviation of daily demand is 8?

• A) About 27.7
• B) About 32.8
• C) About 35.8
• D) About 39.9
• E) About 45.0

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Definitions:

Accounts Receivable

Unsettled payments by customers to a company for delivered goods or services.

ABC Model

A management approach that identifies and assigns costs to activities and then links them to specific products, services, or customer segments.

Inventory Management

The process of ordering, storing, using, and selling a company's inventory.

Inventory Value

The total cost or market value of all the goods held by a company intended for sale.