HighLife Corporation Has the Following Information: Average Demand = 30

question 45

Multiple Choice

HighLife Corporation has the following information: Average demand = 30 units per day
Average lead time = 40 days
Item unit cost = $45 for orders of less than 400 units
Item unit cost = $40 for orders of 400 units or more
Ordering cost = $50
Inventory carrying cost = 15 percent
The business year is 300 days.
Standard deviation of demand during lead time = 90
Desired service level = 95 percent
What is the EOQ if HighLife pays $45/unit? Due to possible differences in rounding,choose the closest answer.

• A)287
• B)300
• C)365
• D)398

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Definitions:

Insurance Fraud

Illegally manipulating or fabricating claims with the intent to obtain undue financial benefit from an insurance policy.

White-Collar Crime

A category of non-violent crimes, usually committed in commercial situations for financial gain.

Corporate Crime

Illegal acts committed by a company or its employees that are designed to benefit the corporation financially or otherwise.

Larceny

The unlawful taking of personal property with the intent to permanently deprive the owner of it.