Scenario 9.8 Peterson Enterprises Uses a Continuous Review Inventory Control System.The Firm

Multiple Choice

Scenario 9.8
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
A normal distribution table is appended to this exam.
-Use the information in Scenario 9.8.What is the EOQ for this item?

A) less than or equal to 1,100 units
B) greater than 1,100 but less than or equal to 1,200 units
C) greater than 1,200 but less than or equal to 1,300 units
D) more than 1,300 units