Question : 31) Disc Company sells 400 discs per week. Purchase-order lead : 1186165

 

31) Disc Company sells 400 discs per week. Purchase-order lead time is 3 weeks and the economic-order quantity is 900 units. What is the reorder point?

A) 950 units

B) 1,200 units

C) 3,500 units

D) 4,500 units

E) 5,600 units

32) Owen-King Company sells optical equipment. Lens Company manufactures special glass lens. Owen-King Company orders 5,200 lens per year, 100 per week at $20 per lens. Lens Company covers all shipping costs. Owen-King Company earns 30% on its cash investments. The purchase-order lead time is 2.5 weeks. Owen-King Company sells 125 lens per week. The following data is available:

 

Relevant ordering costs per purchase order

$21.25

Relevant insurance, materials handling, breakage, and so on, per year

$2.50

 

What is the economic-order quantity for Owen-King Company?

A) 325 lens

B) 297 lens

C) 210 lens

D) 161 lens

E) 92 lens

 

33) Owen-King Company sells optical equipment. Lens Company manufactures special glass lens. Owen-King Company orders 5,200 lens per year, 100 per week at $20 per lens. Lens Company covers all shipping costs. Owen-King Company earns 30% on its cash investments. The purchase-order lead time is 2.5 weeks. Owen-King Company sells 125 lens per week. The following data is available:

 

Relevant ordering costs per purchase order

$21.25

Relevant insurance, materials handling, breakage, and so on, per year

$2.50

 

What is the reorder point?

A) 220.5 lens

B) 312.5 lens

C) 397.5 lens

D) 415.5 lens

E) 561.9 lens

34) The following information has been gathered for Product A:

 

Annual demand

760 units

Purchase price per unit

$300

Orders per year

10

Average daily demand

2.5 units

Lead time in days

10

Cost of placing an order

$40

Relevant insurance, handling. etc costs

$8

Required return

10%

 

What are the annual carrying costs if the company orders at the EOQ amount?

A) $80

B) $400

C) $1,520

D) $12,800

E) $16,000

 

 

35) The following information has been gathered for Product A:

 

Annual demand

760 units

Orders per year

10

Average daily demand

2.5 units

Lead time in days

10

Cost of placing an order

$40

 

What is the economic order quantity?

A) 9 units

B) 10 units

C) 20 units

D) 40 units

E) 46 units

36) The following information has been gathered for Product A:

 

Annual demand

760 units

Orders per year

10

Average daily demand

2.5 units

Lead time in days

10

Cost of placing an order

$40

 

What is the reorder point?

A) 38

B) 25

C) 30

D) 80

E) 100

 

37) The inventory that is held to offset unexpected increases in demand or lead time and unexpected unavailability of stock from suppliers is primarily known as

A) inventory stock.

B) over-supply stock.

C) safety stock.

D) surplus stock.

E) obsolete stock.

 

38) Which of the following statements is true?

A) The reorder point is the point at which the amount of inventory on hand equals the amount needed to cover sales during the lead time.

B) The reorder point is the minimum level of inventory allowed during a particular period.

C) The safety stock is the amount of stock that must be on hand to cover sales during lead time.

D) The safety stock is the minimum level of inventory that must remain on hand.

E) The safety stock is the minimum level of inventory that must remain at the customers.

39) What are the major relevant costs in maintaining safety stock?

A) carrying costs and purchasing costs

B) ordering costs and purchasing costs

C) ordering costs and stockout costs

D) stockout costs and carrying costs

E) stockout costs and purchasing costs

 

40) The total annual relevant cost equation, TRC, includes all of the following inputs EXCEPT

A) ordering costs per purchase order.

B) demand in units.

C) reorder point.

D) carrying cost per unit.

E) EOQ.