Scenario 9.6 a Company Operating Under a Continuous Review System Has an Has

question 100

Multiple Choice

Scenario 9.6
A company operating under a continuous review system has an average demand of 50 units per week for the item it produces.The standard deviation in weekly demand is 20 units.The lead-time for the item is six weeks,and it costs the company $30 to process each order.The holding cost for each unit is $10 per year.The company operates 52 weeks per year.A normal distribution table is appended to this exam.
-Use the information in Scenario 9.6.What is the reorder point if the company finally decides to implement a 95 percent cycle-service level?

• A)less than or equal to 300 units
• B)greater than 300 but less than or equal to 325 units
• C)greater than 325 but less than or equal to 350 units
• D)greater than 350 units

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Definitions:

Shareholders

Individuals or institutions that own one or more shares of stock in a public company, making them partial owners of the company.

Reinvesting

The process of using dividends, interest, or profits from investments to purchase additional shares or units instead of taking the earnings as cash.

Activist Investors

Investors who use their equity stake in a corporation to influence its management or operations, often pushing for financial or structural changes.

Controlling Interest

Ownership of a sufficient portion of a firm's stock (typically over 50%) to dictate policies and management decisions.