If Annual Demand Is 24,000 Units, Orders Are Placed Every

question 61

Multiple Choice

If annual demand is 24,000 units, orders are placed every 0.5 months, and the cost to place an order is $50, what is the annual ordering cost?

• A) $50
• B) $1,200,000
• C) $2,400,000
• D) $1,200
• E) $600,000

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Definitions:

Limited Resources

The finite availability of inputs such as time, money, labor, and materials, which restricts the ability to meet demand or achieve certain objectives.

Maximizes Profit

A strategy or action aimed at increasing the difference between total revenue and total costs to the highest possible level.

Constraints

are limitations or restrictions that affect the strategies and outcomes of a decision-making process or production operation.

Region Of Optimality

The set of all solutions that optimizes a given objective function within a feasible region.