A Computer Company Has Annual Demand of 20,000

question 102

Multiple Choice

A computer company has annual demand of 20,000. They want to determine EOQ for circuit boards which have an annual holding cost (H) of $10/unit, and an ordering cost (S) of $75. The purchasing lead time is 5 days. What is the TC and reorder point ( R) ?

• A) 300 units, $3,000
• B) 400 units, $5,477
• C) 200 units, $2,000
• D) 350 units, $5, 277
• E) 400 units, $5,350

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Definitions:

Marginal Productivity

Marginal productivity is the additional output that is produced by using one more unit of a certain input, assuming that all other inputs remain constant.

Total Output

The complete quantity of goods or services produced by a company, sector, or economy within a given period.

Extra Inputs

Additional resources or factors of production, such as labor or materials, that are used to increase output or efficiency.

Bottleneck

A point of congestion or blockage in a system, process, or production line that significantly delays or prevents progress.