Inventory of carpet is increasing in each production day

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Reference no: EM131746766

Bryson Carpet Mills produces a variety of different carpets. Changing from production of one carpet to another involves a setup cot of $1,000. One particular carpet costs $5 per yard to produce. Annual demand for this style is 120,000 yards. BCM produces carpet 300 days per year. The production process is most efficient when 4,000 yards per day are produced. Inventory carrying cost is estimated at 20% annually.

What does the slope of line C represent? (Refer to the graph above)

Maximum Inventory = 14,900 yards

Rate of production per unit time = 4,000 yards

Rate of increase in inventory per unit time = 3,700 units

Usage rate of accumulated inventory per unit time = 400 yards

None of the above

What does the dashed line B represent? (Refer to the graph above)

Maximum Inventory = 14,900 yards

Rate of production per unit time = 4,000 yards

Rate of increase in inventory per unit time = 3,700 units

Usage rate of accumulated inventory per unit time = 400 yards

None of the above

What does the dashed line D represent? (Refer to the graph above)

Maximum Inventory = 14,900 yards

Rate of production per unit time = 4,000 yards

Rate of increase in inventory per unit time = 3,700 units

Usage rate of accumulated inventory per unit time = 400 yards

None of the above

The period between T1 and T2 represents which of the following? (Refer to the graph above)

Production period for the item

Time at which the accumulated inventory of the item is being used

Time at which inventory for the item is being accumulated

(a) and (b)

(a) and (c)

The period between T2 and T3 represents which of the following? (Refer to the graph above)

Production period for the item

Time at which the accumulated inventory of the item is being used

Time at which inventory for the item is being accumulated

(a) and (b)

(b) and (c)

Which of the following represents the rate at which the inventory of the carpet is increasing in each production day? (Refer to the graph above)

Slope of A

Slope of B

Slope of C

Slope of D

Slope of E

Reference no: EM131746766

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