As an Inventory Manager,you Must Decide on the Order Quantity

question 19

Multiple Choice

As an inventory manager,you must decide on the order quantity for an item.Its annual demand is 350 units.Ordering cost is $20 each time an order is placed,and the holding cost is 30 percent of the per-unit price.Your supplier provided the following price schedule. What is the annual cost discrepancy between the optimal order policy and the second best order policy?

• A)Less than $5
• B)Between $5 and $10
• C)Between $10 and $20
• D)More than $20

---

Definitions:

Critical Value

A critical value is a point on the scale of a statistical distribution that corresponds to a specified level of significance for the testing of a hypothesis.

Complex Comparisons

Refers to analyses involving multiple comparisons within a set of data, typically requiring adjustment of significance levels to account for the increased risk of Type I error.

Analytical Comparisons

The process of examining differences between groups or variables using statistical methods.

More Than Two Groups

This refers to experimental conditions or treatments in a study where there are three or more categories or levels being compared.