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The Following Information Has Been Collected on an Independent Demand =30= 30

Question 14

Multiple Choice

The following information has been collected on an independent demand item:
Demand =30= 30 units per week (assume 52 weeks/ year)
Ordering and setup cost =$50= \$ 50 per order
Holding cost =$8= \$ 8 per unit per year
Lead time =1= 1 week
Standard deviation in weekly demand =8= 8 units Cycle- service level =90%= 90 \%
You will need to refer to a normal table to answer the question(s) .
-Use the information from Table 5.11. Design a continuous review system (Q system) for this item, making Q equal to the EOQ. Assume that the demand during lead time is normally distributed. What are the desired values for Q and R?


A) Q is between 121 and 125, and R is between 80 and 84.
B) Q is between 138 and 142, and R is between 39 and 42.
C) Q is between 121 and 125, and R is between 53 and 57.
D) Q is between 138 and 142, and R is between 34 and 38.

Correct Answer:

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