Use the Information Below to Answer the Following Question(s)

question 59

Multiple Choice

Use the information below to answer the following question(s) .
Movie Time is a distributor of DVDs. Video Mart is a local retail outlet which sells blank and recorded DVDs. Video Mart purchases DVDs from Movie Time at $5.00 each; the units are shipped in packages of 25. Movie Time pays all incoming freight, and Video Mart does not inspect the DVDs due to Movie Time's reputation for high quality. Annual demand is 104,000 DVDs at a rate of 2,000 units per week. Video Mart earns 15% on its cash investments. The purchase-order lead time is one week. The following cost data are available:

-How many deliveries will be made during each time period?

• A) 22.1 deliveries
• B) 26.0 deliveries
• C) 29.4 deliveries
• D) 32.0 deliveries
• E) 29.6 deliveries

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Definitions:

Demand

The quantity of a product or service that consumers are willing and able to purchase at various prices during a certain period.

Cost Data

Information or figures related to the expenses incurred in producing goods or services, including both fixed and variable costs.

Monopolistically Competitive

A market structure where many companies sell products that are similar but not identical, leading to competition among them.

Profit-maximizing Output

The level of production at which a company achieves its highest possible profit.