Brenda Opens a Pool and Spa Store in a Lively

question 83

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.
$\begin{array} { l l } \text { Demand } = 10 \text { boxes per week } & \text { Store operates } 50 \text { weeks } / \text { year } \\\text { Order cost } = \$ 40 / \text { order } & \text { Lead time } = 3 \text { weeks } \\\text { Item cost } = \$ 80 / \text { box } & \text { Std. deviation in weekly demand } = 6 \\\text { Inventory-holding cost } = 15 \% \text { per year } & \text { Service level } = 96 \%\end{array}$
-If the current order quantity for SA is 20 boxes per order, how much money can she save per year by adopting an economic order quantity (EOQ) ordering policy?

• A) Less than $100
• B) More than $100 but less than or equal to $200
• C) More than $300 but less than or equal to $400
• D) More than $400

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Definitions:

Behaviour Modelling Training

A learning strategy that involves observing, modeling, and practicing desired behaviors to enhance task performance.

Principles of Learning

Fundamental guidelines that describe how learners absorb, process, and retain knowledge during learning.

Psychological Fidelity

The degree to which a training or simulation environment accurately replicates the psychological aspects or conditions of a real-world setting.

Physical Fidelity

Physical fidelity relates to the degree of accuracy with which a simulation or training environment replicates the real-world conditions it aims to mimic.