Consider a Noninstantaneous Replenishment Situation in Which the Production Rate

question 49

Multiple Choice

Consider a noninstantaneous replenishment situation in which the production rate is 100 units per day,the demand rate is four units per day,and the economic production lot size is 500 units.Which of the following statements is true?

• A)The average cycle inventory is fewer than 225 units.
• B)The average cycle inventory is greater than 300 units.
• C)The rate of buildup in cycle inventory during the production cycle is fewer than 100 units per day.
• D)The rate of buildup in cycle inventory during the production cycle is greater than or equal to 400 units per day.

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Definitions:

Service Provider

An entity that provides services to other entities, typically in exchange for payment.

Work in Process

Inventory items that are in the process of being produced but are not yet completed, often referred to as WIP.

Stock Ledger

A record that keeps track of the stock transactions of a company, including shares bought, sold, issued, and returned.

Materials Ledger

A detailed record that tracks the quantity and cost of materials on hand.