Reference no: EM132255891
DATA AND BACKGROUND FOR QUESTIONS
Wong Enterprises used a Continuous Review System (i.e., Q System) for controlling inventory for a specific end-item. The firm operates 5 days per week and 52 weeks a year and the end-item has the following characteristics:
Demand (D) = 20,020 units/year
Ordering Costs (S) = $40/order
Holding Costs = $1/unit/six months
Leadtime (L) = 10 days
Cycle Service Level = 94.95%
Assume that Demand is normally distributed; with Standard Deviation of weekly demand = 100 units.
Current on-hand inventory is 1040 units, with no scheduled receipts and no backorders.
1. The EOQ for this item is:
More than 850 but less than or equal to 860
More than 860 but less than or equal to 870
More than 870 but less than or equal to 880
More than 880 but less than or equal to 890
More than 890
2. The average time, P (in weeks), between orders is: (round to the nearest week)
Less than or equal to 1 week
More than 1 week but less than or equal to 2 weeks
More than 2 weeks but less than or equal to 3 weeks
More than 3 weeks
None of the above
3. The safety stock for the Q system is:
More than 225 but less than or equal to 230
More than 231 but less than or equal to 236
More than 237 but less than or equal to 242
More than 243 but less than or equal to 248
None of the above
4. The safety stock for the P system is:
More than 340 but less than or equal to 345
More than 346 but less than or equal to 351
More than 352 but less than or equal to 357
More than 358 but less than or equal to 363
None of the above.
5. The reorder point, R, in the Q system is (in units):
More than 800 but less than or equal to 850
More than 850 but less than or equal to 900
More than 900 but less than or equal to 950
More than 950 but less than or equal to 1,000
None of the above
6. Annual Holding Costs equal (in Dollars):
More than 910 but less than or equal to 915
More than 915 but less than or equal to 920
More than 920 but less than or equal to 921
More than 921 but less than or equal to 925
None of the above
7. Annual Costs for placing orders is (in Dollars):
More than 890 but less than or equal to 900
More than 900 but less than or equal to 910
More than 910 but less than or equal to 920
More than 920 but less than or equal to 930
None of the above
8. Assuming that a withdrawal of 15 units just occurred, will you place an order?
Definitely place an order
Do not place an order
The order should have been placed 7 days ago.
The order should have been placed one week ago.
None of the above
9. Assume that we are now operating a P system. Then, the target level, T, is (in units):
More than 1850 but less than or equal to 1860
More than 1860 but less than or equal to 1870
More than 1870 but less than or equal to 1880
More than 1880 but less than or equal to 1890
None of the above
10. The difference between the safety stock for the P system and the Q system is (in units):
More than 90 but less than or equal to 100
More than 100 but less than or equal to 110
More than 110 but less than or equal to 120
More than 120 but less than or equal to 130
None of the above