Table 56
Peterson Enterprises Uses a Continuous Review Inventory Control System

Multiple Choice

Table 5.6
Peterson Enterprises uses a continuous review inventory control system. The firm operates 50 weeks per year and has the following characteristics for an item:
Demand $= 50,000$ units $/$ year
Ordering cost $= \$ 35 /$ order
Holding cost $= \$ 2 /$ unit $/$ year
Lead time $= 3$ weeks
Standard deviation in weekly demand $= 125$ units
You will need to refer to a normal table to answer the question(s) .
-Use the information in Table 5.6. If Peterson wishes to provide a 90 percent cycle- service level, what is the reorder point?

A) less than or equal to 2700 units
B) greater than 2700 but less than or equal to 3100 units
C) greater than 3100 but less than or equal to 3500 units
D) greater than 3500 units