Scenario 9.7 Cranium, Inc., Purchases Term Papers from an Overseas Supplier Under

question 140

Multiple Choice

Scenario 9.7
Cranium, Inc., purchases term papers from an overseas supplier under a continuous review system. The average demand for a popular mode is 300 units a day with a standard deviation of 30 units a day. It costs $60 to process each order and there is a five-day lead-time. The holding cost for a paper is $0.25 per year and the company policy is to maintain a 98% service level. Cranium operates 200 days per year.
-Use the information in Scenario 9.7. What is the EOQ for these papers?

• A) less than or equal to 3,000 units
• B) greater than 3,000 units but less than or equal to 4,000 units
• C) greater than 4,000 units but less than or equal to 5,000 units
• D) greater than 5,000 units

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Definitions:

Hybrid Segment

A market segment that combines characteristics of two or more distinct groups, targeted with products or services that meet their blended needs.

Marketing Program

A comprehensive plan that integrates all marketing efforts, including advertisements, promotions, and selling strategies, to achieve the marketing objectives.

Marketing Mix Elements

Components of a marketing strategy, traditionally identified as product, price, place, and promotion, used to meet consumers' needs and business goals.

Strategic Combination

A tactic of integrating diverse strategies, resources, or actions to reach more comprehensive and effective strategic goals.