Scenario 9.10 Demand = 52,000 Units/year

question 132

Multiple Choice

Scenario 9.10
Demand = 52,000 units/year
Standard deviation of weekly demand = 110 units
Ordering costs = $45/order
Holding costs = $0.50/unit/year
Cycle-service level = 90%
Lead time = 2 weeks
Number of weeks per year = 52 weeks
A normal distribution table is appended to this exam.
-Use the information in Scenario 9.10.A firm uses the periodic review system to control the item depicted above.It reviews the item's status every three weeks (P = 3) .At the most recent inventory review,an inventory clerk found 1,500 units.There were no scheduled receipts and no backorders.How many units should be ordered? (Hint: You must calculate T before answering this question. )

• A)0 units
• B)greater than 0 but less than or equal to 3,750 units
• C)greater than 3,750 but less than or equal to 4,000 units
• D)greater than 4,000 units

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Definitions:

Breach

The violation or infringement of a law, obligation, contract, or trust.

Ordinary Care

The degree of care that a reasonably prudent person would exercise under similar circumstances to avoid harm to themselves or property.

Impostor

An individual who deceitfully pretends to be someone else in order to gain a benefit or deceive others.

Restrictive Indorsement

A condition placed on the transfer of a negotiable instrument that limits its use or payment to a specific purpose or party.