Margaret Company Has an Economic Order Quantity for Item B

question 32

Multiple Choice

Margaret Company has an economic order quantity for item B of 100 units.The annual demand for the product is 1,400 units, and the unit carrying cost per year is $7.What is the cost of placing an order?

• A) $8
• B) $25
• C) $200
• D) $2

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Definitions:

Seasonal Variation

Fluctuations in statistical or economic data that occur at regular intervals due to seasonal patterns.

Random Variation

The inherent unpredictability in the outcomes of a process, often analyzed in statistical contexts to understand or model data.

Cyclical Effect

A pattern of fluctuations in a time series that corresponds to cycles in the broader economy, often related to business or economic conditions lasting more than a year.

Exponential Smoothing

A time series forecasting method for univariate data that applies smoothing factors to make forecasts.