Multiple Choice
Scenario 9.6
A company operating under a continuous review system has an average demand of 50 units per week for the item it produces.The standard deviation in weekly demand is 20 units.The lead-time for the item is six weeks,and it costs the company $30 to process each order.The holding cost for each unit is $10 per year.The company operates 52 weeks per year.A normal distribution table is appended to this exam.
-Use the information in Scenario 9.6.What is the reorder point if the company finally decides to implement a 95 percent cycle-service level?
A) less than or equal to 300 units
B) greater than 300 but less than or equal to 325 units
C) greater than 325 but less than or equal to 350 units
D) greater than 350 units
Correct Answer:
Verified
Correct Answer:
Verified
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