Brenda is the owner of a spa store that operates 50 weeks per year. Spair Shampoo is a high margin stock keeping unit (SKU), but the product goes out of stock frequently. She decides to use a fixed-quantity system (FQS) and orders boxes of Spair Shampoo containing 10 bottles per box from a vendor 160 miles away. She collects the following data with respect to the sales of Spair Shampoo.

\begin{array} { | l | l | } \hline \text { Demand } & 10 \text { boxes per week } \\\hline \text { Order Cost } & \$ 40 \text { per order } \\\hline \text { Item Cost } & \$ 80 \text { per box per year } \\\hline \text { Inventory-Holding Cost } & 15 \text { percent per year } \\\hline \text { Lead Time } & 3 \text { weeks } \\\hline \text { Standard Deviation in Weekly Demand } & 6 \\\hline \text { Service Level } & 96 \text { percent } \\\hline\end{array}

Using the given data, it can be concluded that the economic order quantity (EOQ) of the Spair Shampoo boxes is:
A) less than 25 boxes.
B) more than 25 but less than or equal to 35 boxes.
C) more than 35 but less than or equal to 45 boxes.
D) more than 55 boxes.

__________Applies to Inventory Situations in Which One Order Is Placed

Multiple Choice

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