A Particular Brand of Soap Has a Lead Time of Three

question 12

Multiple Choice

A particular brand of soap has a lead time of three weeks to reorder,a weekly standard deviation of ten units and a weekly average usage of 30 units.The reorder point for this soap,assuming a 95% service level (z = 1.645) ,is:

• A)16.45 units
• B)28.50 units
• C)106.45 units
• D)118.49 units

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Definitions:

FCFE

Available Cash for Equity Shareholders, an indicator of the cash surplus for a company's equity shareholders after settling all costs, reinvestments, and liabilities.

Per Share FCFE

Free Cash Flow to Equity per share, indicating the amount of cash available to equity shareholders per share after expenses, reinvestment, and debt payments.

Required Rate of Return

The minimum annual percentage return on an investment deemed acceptable by an investor or creditor.

Per Share FCFE

Free Cash Flow to Equity per share; a measure of how much cash is available to the equity shareholders of a company on a per share basis.