Scenario 9.5 Tom Bergman, Owner and Operator of the Earplug Superstore, Is

question 92

Multiple Choice

Scenario 9.5
Tom Bergman, owner and operator of the Earplug Superstore, is reviewing the costs associated with the store's best-selling hearing aid, the BZ15. The data available to Dr. Bergman concerning this device follow.
Demand = 25 units/week
Order cost = $3/order
Holding cost = $1.50/unit/year
The Earplug Superstore operates 52 weeks a year.
-Use the information in Scenario 9.5. If Tom orders a one-year supply at a time, how much higher are his total (ordering and holding) costs compared to total costs incurred if he ordered at his EOQ?

• A) less than or equal to $600
• B) greater than $600 but less than or equal to $700
• C) greater than $700 but less than or equal to $800
• D) greater than $800

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Definitions:

Coolant Ratio

The specified mixture of coolant and water in a vehicle's cooling system, crucial for preventing overheating and freezing.

Freezing Point

The temperature at which a liquid becomes solid.

Accumulator

A storage structure for pressurized brake fluid in many ABS systems and the Powermaster brake booster system.

Refrigeration System

A system designed to remove heat from an enclosed space or from a substance for the purpose of lowering its temperature and/or maintaining it below ambient level.