Task: Business Financial Operations
Question 1: An inventory decision rule states .when the inventory level goes down to 14 gearboxes, 100 gearboxes will be ordered. Which of the following statements is true?
a. Fourteen is the reorder point, and 100 is the order quantity.
b. The number 100 is a function of demand during lead time.
c. Fourteen is the safety stock, and 100 is the reorder point.
d. One hundred is the reorder point, and 14 is the order quantity.
e. None of the above is true.
Question 2: The degree or strength of a linear relationship is shown by the
a. mean absolute deviation
b. correlation coefficient
c. RSFE
d. mean
e. alpha
Question 3: Fabricators, Inc. wants to increase capacity by adding a new machine. The fixed costs for machine A are $90,000, and its variable cost is $15 per unit. The revenue is $21 per unit. The break-even point for machine A is:
a. $15,000 dollars
b. $90,000 dollars
c. 90,000 units
d. 15,000 units
e. cannot be calculated from the information provided
Question 4: A certain type of computer costs $1,000, and the annual holding cost is 25%. Annual demand is 10,000 units and the order cost is $150 per order. What is the approximate economic order quantity?
a. 16
b. 70
c. 110
d. 183
e. 600