Scenario 9.7 You Are the Operations Manager of a Firm That Uses

question 174

Multiple Choice

Scenario 9.7
You are the operations manager of a firm that uses the continuous-review inventory control system.Suppose the firm operates 52 weeks a year,365 days,and has the following characteristics for its primary item:
Demand = 25,000 units/year
Ordering cost = $30/order
Holding cost = $8/unit/year
Lead time = 2 weeks
Standard deviation in weekly demand = 100 units
A normal distribution table is appended to this exam.
-Use the information in Scenario 9.7.What is the total cost (ordering and carrying) if the company orders the economic order quantity for this item?

• A)less than or equal to $3,000
• B)greater than $3,000 but less than or equal to $3,200
• C)greater than $3,200 but less than or equal to $3,400
• D)greater than $3,400

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Definitions:

Just Cause Clause

A provision in contracts, often seen in unionized workplaces, requiring the employer to provide a valid reason for disciplinary actions including termination.

Collective Bargaining

The process of negotiating terms of employment between an employer and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and rights.

Specific Grounds

Particular reasons or bases for actions, decisions, or legal claims, often detailed in legal contexts or policies.

National Unions

Organizations that represent the collective interests of workers in negotiations with employers over wages, benefits, and working conditions.