Scenario 9.8 Peterson Enterprises Uses a Continuous Review Inventory Control System.The Firm

question 92

Multiple Choice

Scenario 9.8
Peterson Enterprises uses a continuous review inventory control system.The firm operates 50 weeks per year and has the following characteristics for an item:
Demand = 50,000 units/year
Ordering cost = $35/order
Holding cost = $2/unit/year
Lead-time = 3 weeks
Standard deviation in weekly demand = 125 units
A normal distribution table is appended to this exam.
-Use the information in Scenario 9.8.What is the EOQ for this item?

• A)less than or equal to 1,100 units
• B)greater than 1,100 but less than or equal to 1,200 units
• C)greater than 1,200 but less than or equal to 1,300 units
• D)more than 1,300 units

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Definitions:

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The act of immobilizing a surgical incision site to promote healing and reduce the risk of reopening the wound.