Burgoon Uses an Economic Order Quantity Model and Has Determined

question 2

Multiple Choice

Burgoon uses an economic order quantity model and has determined an optimal order size of 500 units. Annual demand is 10,000 units, ordering costs are $50 per order, and holding costs are $4 per unit. The company's annual ordering and holding costs total:

• A) $2,000.
• B) $3,000.
• C) $21,000.
• D) $41,000.
• E) none of the other answers are correct.

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Definitions:

Eruption Column

A cloud of super-heated ash, gas, and volcanic debris that rises above a volcano during an explosive eruption.

Volcanic Mudflows

Also known as lahars, these are rapid flows of debris, mud, and water that descend from a volcano, typically following an eruption or heavy rainfall.

Flow-Banded Rhyolite

A type of volcanic rock characterized by bands of alternating texture or color, formed by the flow of viscous silicate lava.

Viscous Lava

Lava that has a high viscosity, meaning it flows slowly due to its thick, sticky consistency.