Scenario 9.9 Demand = 5,200 Units/year

question 109

Multiple Choice

Scenario 9.9
Demand = 5,200 units/year
Standard deviation of weekly demand = 11 units
Ordering costs = $45/order
Holding costs = $2/unit/year
Cycle-service level = 90% (z for 90% = 1.28)
Lead-time = 3 weeks
Number of weeks per year = 52 weeks
-Use the information in Scenario 9.9.If a firm uses the continuous review system to control the inventory,what would be the reorder point?

• A)0 units
• B)greater than 0 but less than or equal to 300 units
• C)greater than 300 but less than or equal to 600 units
• D)greater than 600 units

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Definitions:

Consensus

A general agreement or the practice of developing such an agreement among the members of a group or community.

Frequency

The rate at which an event or occurrence happens within a given period of time.

Stereotype

A generalized belief or expectation about a particular group or class of people that individuals apply to members of that group.

Self-fulfilling Prophecy

A prediction that directly or indirectly causes itself to become true, due to positive feedback between belief and behavior.