Graeme Manages a Candy Store in a High Traffic Shopping

question 8

Multiple Choice

Graeme manages a candy store in a high traffic shopping mall where he has collected the following information:
Weekly demand for small candy boxes = 90 boxes
Cost to place one purchase order with the box supplier = $19.80
Cost to hold one box for one year in inventory = $2.45
ead time = 2 weeks
Weeks in a year = 52 weeks
-The current ordering policy for the candy store is 360 boxes so the average inventory level (i.e., cycle inventory) is:

• A) less than or equal to 100 boxes.
• B) more than 100 but less than or equal to 150 boxes.
• C) more than 150 but less than or equal to 200 boxes.
• D) more than 200 but less than or equal to 250 boxes.

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Definitions:

Product Change

The process of modifying or enhancing a product's features, design, or specifications to improve its appeal or functionality.

Process Change

Alteration or modification in the way a business operates, which could be due to technological advancements, compliance requirements, or operational improvement.

Desired Profit

The target earnings a company sets to achieve within a specific period through its operational activities.

Variable Cost Concept

Expenses that change in proportion to the amount of production or service operations.