Given an EOQ Model with Shortages in Which Annual Demand

question 137

Multiple Choice

Given an EOQ model with shortages in which annual demand is 4200 units, C_o=$160, C_c=$7 per unit per year, and C_s=$25, what is the annual ordering cost?

• A) 2711.09
• B) 1059.03
• C) 1355.55
• D) 495.74

---

Definitions:

Sealed-Bid

A bidding process where all bids are submitted secretly, and the highest bid usually wins, often used in auctions or tendering processes.

Lemons

Sour-tasting citrus fruit that is often used in cooking or as a garnish, known for their high vitamin C content.

Expected Value

The anticipated value for a given investment, calculating all possible outcomes under a set of probabilities.

Dipstick

A tool used for measuring the quantity of a liquid in a reservoir, commonly used for checking oil levels in engines.