Scenario 9.5 Cranium,Inc. ,Purchases Term Papers from an Overseas Supplier Under a Under

question 212

Multiple Choice

Scenario 9.5
Cranium,Inc. ,purchases term papers from an overseas supplier under a continuous review system.The average demand for a popular mode is 300 units a day with a standard deviation of 30 units a day.It costs $60 to process each order and there is a five-day lead-time.The holding cost for a paper is $0.25 per year and the company policy is to maintain a 98% service level.Cranium operates 200 days per year.A normal distribution table is appended to this exam.
-Use the information in Scenario 9.5.What is the EOQ for these papers?

• A)less than or equal to 3,000 units
• B)greater than 3,000 units but less than or equal to 4,000 units
• C)greater than 4,000 units but less than or equal to 5,000 units
• D)greater than 5,000 units

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Definitions:

Configuration

The arrangement or set-up of components or elements in a particular form or structure.

Multinational Company

A corporation that operates in several countries but has its headquarters in one country, often involved in producing and selling goods or services in various markets.

Global Strategy

A business approach that considers the world as a single market, focusing on developing standardized products or services to achieve economies of scale.

Financialized

A term describing how financial markets, financial institutions, and financial elites gain greater influence over economic policy and economic outcomes.