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

question 160

Multiple Choice

Use the information below to answer the following question(s) .Office Supply House purchases 4,160 reams of paper per year, ordered in lots of 80 reams per week at $150 per ream.The vendor covers all shipping costs.Office Supply House is not required to inspect the shipment upon entry.Office Supply House earns 20% on its cash investments.The purchase order lead time is two weeks.The following cost data are available:

-Disc Company sells 400 discs per week.Purchase order lead time is 3 weeks and the economic order quantity is 900 units.What is the reorder point?

• A)950 units
• B)1,200 units
• C)3,500 units
• D)4,500 units
• E)5,600 units

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Definitions:

Opportunity Loss Table

A table used in decision making that shows the loss of potential gain from not choosing the optimal action or decision.

Payoff Table

A tabular representation of the outcomes of different decisions or strategies under various states of nature or scenarios.

Expected Opportunity Loss

The anticipated loss for not choosing the best possible option or course of action in decision-making processes.

Expected Monetary Value

A statistical technique in decision making used to calculate the average outcome when the future includes scenarios that may or may not happen.