Consider a firm with a daily demand of 100 units, a production rate per day of 500 units, a setup cost of $200, and an annual holding cost per unit of $10. Suppose that the firm operates 300 days per year. How many units of inventory must their storage area be able to hold?

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Answer | | close to 975 | | | close to 980 | | | close to 1095 | | | close to 1224 | | | close to 1225 |

5 points

Question 2 1. ------------------------------------------------- -------------------------------------------------

If annual demand is 24,000 units, orders are placed every 0.5 months, and the cost to place an order is $50, what is the annual ordering cost?

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Answer | | 50 | | | 600 | | | 1200 | | | 2400 | | | Can not be determined |

5 points

Question 3 1. ------------------------------------------------- -------------------------------------------------

If the Economic Order Quantity (EOQ) is ordered, which of the following is true?

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Answer | | Annual ordering cost exceeds annual holding cost. | | | Annual holding cost exceeds annual ordering cost. | | | Annual ordering cost is equal to annual holding cost. | | | The sum of annual ordering cost plus annual holding cost is maximized. | | | The annual holding cost curve is decreasing. |

5 points

Question 4 1. ------------------------------------------------- -------------------------------------------------

The basic Economic Order Quantity (EOQ) model can be considered a special case of the Economic Production Quantity (EPQ) model under which of the following condition?

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Answer | | The demand per day is greater than production per day. | | | The production rate per day approaches 0. | | | The production rate per