Brenda Opens a Pool and Spa Store in a Lively

question 103

Multiple Choice

Brenda opens a pool and spa store in a lively shopping mall and finds business to be booming, but she often stocks out of key items customers want. She decides to experiment with inventory control methods such as using a fixed order quantity (FQS) and/or fixed order period (FPS) systems. The 28-ounce bottle of Super Algaecide (SA) is a high margin stock keeping unit (SKU) , but it stocks out frequently. Ten SA bottles come in each box, and she orders boxes from a vendor 160 miles away. Brenda is busy running the store and seldom has time to review store inventory status and order the right quantity at the right time. She collects the following data with respect to these SA sales.
$\begin{array} { l l } \text { Demand } = 10 \text { boxes per week } & \text { Store operates } 50 \text { weeks } / \text { year } \\\text { Order cost } = \$ 40 / \text { order } & \text { Lead time } = 3 \text { weeks } \\\text { Item cost } = \$ 80 / \text { box } & \text { Std. deviation in weekly demand } = 6 \\\text { Inventory-holding cost } = 15 \% \text { per year } & \text { Service level } = 96 \%\end{array}$
-The reorder point for Super Algaecide (SA) with safety stock is:

• A) less than 20 boxes.
• B) more than 20 but less than or equal to 30 boxes.
• C) more than 30 but less than or equal to 40 boxes.
• D) more than 40 but less than or equal to 50 boxes.

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Definitions:

Foster Homes

Residential settings where children who cannot live with their biological parents are placed under the care of a foster family.

Adoptive Homes

Households in which children have been legally adopted and are raised by parents who are not their biological parents.

Social Responsiveness

The capacity of an individual to engage in social interactions by understanding and reciprocating social cues, behaviors, and emotions.

Adopted Children

Children who are legally taken and raised by parents who are not their biological parents, forming a permanent family bond.