1. Average demand for a particular item is 1,200 units per year. It costs $100 to place an order for this item, and it costs $24 to hold one unit of this item in inventory for one year. If the EOQ model is used what would the order quantity be?
50
100
Cannot be determined.
60
24
2. Average demand for a particular item is 1,200 units per year. It costs $100 to place an order for this item, and it costs $24 to hold one unit of this item in inventory for one year. If the EOQ model is used, What would the average inventory level be?
12
6
30
50
25
3. A company uses 5000 units of an item in a year. It costs the company $35 to place an order for this item, and it costs $24 to hold one unit of this item in inventory for one year. If the company uses an order quantity of 500 what would be its total cost for inventory?
$6350
$5000
$59
$29,500
$500
4. Lead time is exactly 20 days long. Daily demand is normally distributed with a mean of 10 gallons per day and a standard deviation of 2 gallons. What is the standard deviation of demand during lead time?
400 times the square root of 10
20 times 2
2 times the square root of 20
20 times 10
2 times the square root of 10
5. Average demand for an item is 75 per week with a standard deviation of 16. The lead time to get an order is 1.5 weeks. If the manager of this item wants a 90% Customer Service Level how much safety stock should she carry? (round your final answer to the nearest whole number.
48
32
68
75
25