Suppose Management Decides to Relax the Policy About Stockouts on a Month-To-Month

question 8

Multiple Choice

Suppose management decides to relax the policy about stockouts on a month-to-month basis.Instead,they just want to make sure that they end the entire five-month planning period with a zero balance on inventory.They have never worked this way before and don't have an idea what it costs to stockout,so they assign a value of $0 for each unit stocked out.What is the optimal planning period cost?

• A)$42,520
• B)$45,220
• C)$40,225
• D)$42,250

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