Average Demand for a Particular Item Is 1,200 Units Per

question 134

Multiple Choice

Average demand for a particular item is 1,200 units per year. It costs $100 to place an order for this item, and it costs $24 to hold one unit of this item in inventory for one year. If the fixed-order-interval model is chosen in this instance, how often (on average) will this item be ordered?

• A)once a month
• B)once every other month
• C)twice a month
• D)twice every three months
• E)three times every two months

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Definitions:

Reliability

The degree to which the result of a measurement, calculation, or specification can be depended on to be accurate.

Causal Relationships

Connections between variables where a change in one variable directly causes a change in another.

Cross-lagged

A statistical technique used in time series analysis to determine the relationship between variables at different points in time.