A Company Annually Consumes 10,000 Units of Part C

question 115

Multiple Choice

A company annually consumes 10,000 units of Part C.The carrying cost of this part is $2 per year and the ordering costs are $100.The company uses an order quantity of 500 units.If the company operates 200 days per year,and the lead time for ordering Part C is 5 days,what is the order point?

• A)250 units
• B)1,000 units
• C)500 units
• D)2,000 units

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Definitions:

Cyclical Unemployment

Unemployment that rises during economic downturns and falls when the economy improves.

Seasonal Unemployment

Joblessness linked to seasonal variations in demand or supply of labor in certain industries.

Cyclical Unemployment

A type of unemployment that relates to the cyclical trends in the economy, fluctuating with the business cycle's contraction and expansion phases.

Automobile Industry

A sector of the economy focused on the manufacturing, design, marketing, and selling of motor vehicles.