Consider a Noninstantaneous Replenishment Situation in Which the Production Rate

question 3

Multiple Choice

Consider a noninstantaneous replenishment situation in which the production rate is 100 units per day,the demand rate is four units per day,and the economic production lot size is 500 units.Which of the following statements is TRUE?

• A)The average cycle inventory is fewer than 225 units.
• B)The average cycle inventory is greater than 300 units.
• C)The rate of buildup in cycle inventory during the production cycle is fewer than 100 units per day.
• D)The rate of buildup in cycle inventory during the production cycle is greater than or equal to 400 units per day.

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Definitions:

Variable-Rate Loan

A loan where the interest rate can change over time, typically in relation to an index or benchmark.

Compounded Monthly

A method of calculating interest where the interest earned each month is added to the principal, thereby increasing the amount upon which future interest is calculated.

Compounded Quarterly

Interest calculation where the interest is added to the principal four times a year, allowing future interest to be earned on the prior periods' interest.

Outstanding Balance

The amount of money owed that has not yet been paid back.