Table 1
Peterson Enterprises Uses a Fixed Order Quantity Inventory $= 50,000$

question 4

Multiple Choice

Table 1
Peterson Enterprises uses a fixed order quantity inventory control system. The firm operates 50 weeks per year and has the following characteristics for an item:
Demand $= 50,000$ units/year
Ordering cost $= \$ 35 /$ order
Inventory-carrying cost as a percent of item value $= 25 \%$
Item (Unit) value $= \$ 8$
Lead time $= 3$ weeks
Standard deviation in weekly demand $= 125$ units
-The total order and inventory-holding cost is:

• A) less than $1,000.
• B) more than or equal to $1,000 but less than $1,500.
• C) more than or equal to $1,500 but less than $2,000.
• D) more than or equal to $2,000.

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Definitions:

Linchpin

A critical element, person, or thing that holds something together or is essential to its stability and operation.

Atlantic Trading System

The network of trade routes connecting Europe, Africa, and the Americas from the 16th to the 19th century, facilitating the exchange of goods, people (including slaves), and culture.

Slaves

Individuals who are legally owned by others and are forced to work without pay, often without any rights or freedoms.

Tuscarora War

A conflict between the British, Dutch, and German settlers and the Tuscarora Native Americans in North Carolina during the early 18th century, leading to the defeat and relocation of the Tuscarora.