The General Chemical Company Uses 150,000 Gallons of Hydro Chloric

question 129

Multiple Choice

The General Chemical Company uses 150,000 gallons of hydro chloric acid per month. The cost of carrying the chemical in inventory is 50 cents per gallon per year, and the cost of ordering the chemical is $150 per order. The firm uses the chemical at a constant rate throughout the year. It takes 18 days to receive an order once it is placed. The reorder point is ________.

• A) 7,500 gallons
• B) 25,000 gallons
• C) 90,000 gallons
• D) 105,000 gallons

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Definitions:

Elastic

Refers to a market for a product or service that is price sensitive; that is, relatively small changes in price will generate fairly large changes in the quantity demanded.

Specific Brand

A particular brand that is identified by its unique name, symbol, or design, used to distinguish it from other brands within the same category.

Deodorant

A personal care product applied to the body to prevent or mask odor caused by the bacterial breakdown of perspiration.

Competitor-Oriented Pricing

A pricing strategy where a company sets its prices based on competitors' prices rather than solely on its own costs or consumer demand.