Artwright Graphics Uses a Special-Purpose Paper in 80 Per Cent

question 31

Multiple Choice

Artwright Graphics uses a special-purpose paper in 80 per cent of its jobs. The paper is purchased in l00-sheet packages at a cost of $100 per package. Management estimates the cost of placing and receiving a typical order to be $15 and the annual cost of carrying a package in inventory is $1.50. The firm uses 2600 packages each year and production is constant all year. The lead time to receive an order is one week. No safety stock is kept. The reorder point for the paper is:

• A) 100 units.
• B) 25 units.
• C) 50 units.
• D) 203 units.

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Definitions:

Alternatives

Different options or choices available in any given situation.

Approach-Avoidance

Refers to the conflict that occurs when a single goal or event has both attractive and unattractive aspects, leading to ambivalence in decision making.

Repairs

The process of fixing or restoring something that is broken or damaged, returning it to a functional or usable state.

Reliable Transportation

Transportation means that consistently provides safe and timely conveyance from one place to another.