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

question 215

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.If lead-time increases by three days,what is the reorder point needed to maintain a 98% service level?

• A)less than or equal to 2,400 units
• B)greater than 2,400 units but less than 2,500 units
• C)greater than 2,500 units but less than 2,600 units
• D)greater than 2,600 units

---

Definitions:

Glaucoma

A group of eye conditions that damage the optic nerve, often associated with increased intraocular pressure, leading to loss of vision if untreated.

Receptor Cells

Specialized cells that respond to specific types of stimuli, such as light, sound, or chemical substances.

Neural Responses

The reactions of nerve cells or neurons to external stimuli, including how they process and transmit information.

Retina

The light-sensitive layer at the back of the eye that contains photoreceptor cells, which convert light into neural signals for visual recognition by the brain.