# 51 if ferry company has a safety stock of 160 units and the average daily demand is 4302679

51) If Ferry Company has a safety stock of 160 units and the average daily demand is 20 units, how many days can be covered if the shipment from the supplier is delayed by 12 days?

A) 12.0 days

B) 10.0 days

C) 8.0 days

D) 6.7 days

E) 13.33 days

52) If Jackson Collectibles, Inc. has a safety stock of 35 units and the average weekly demand is 14 units, how many days can be covered if the shipment from the supplier is delayed?

A) 2.5 days

B) 17.5 days

C) 21 days

D) 35 days

E) 7.0 days

53) Sandrington Ltd. operates a retail bicycle shop. Wheel covers are popular with customers. Sandrington purchases these covers for \$48 (per pair) and expects to sell 5,000 pairs per year. Ordering costs are estimated at \$180 per order and relevant insurance handling etc. costs are estimated at \$0.30 per month. The company has established a 14% annual return on investment. The EOQ quantity for Sandrington is:

A) 418 units

B) 506 units

C) 2,449 units

D) 707 units

E) 24 units

54) Sandrington Ltd. operates a retail bicycle shop. Wheel covers are popular with customers. Sandrington purchases these covers for \$48 (per pair) and expects to sell 5,000 pairs per year. Ordering costs are estimated at \$180 per order and relevant insurance handling etc. costs are estimated at \$0.30 per month. The company has established a 14% annual return on investment. At the EOQ quantity, Sandrington's total relevant inventory costs would be:

A) \$2,546

B) \$3,557

C) \$735

D) \$4,310

E) \$6,467

55) Which of the following factor(s) would not cause a reduction in the EOQ?

A) long-run purchasing arrangements, fixing price and quality

B) electronic commerce

C) increasing use of purchase order cards

D) labour-intensive procurement methods

E) increase in carrying cost [C]

56) The EOQ model is designed to emphasize the tradeoff between which of the following factors?

A) carrying costs and ordering costs

B) purchasing costs and carrying costs

C) stockout costs and carrying costs

D) purchasing costs and ordering costs

E) stockout costs and ordering costs

57) Due to unprecedented growth during the year Denise's Flowers decided to use some of its surplus cash to increase the size of several inventory order quantities that had been previously determined using an EOQ model.

Required:

For each of the following items tell whether the action caused an increase, a decrease, or no change to the EOQ.

a.average inventory

b.cost of goods sold

c.number of orders per year

d.total annual carrying costs

e.total annual carrying and ordering costs

f.total annual ordering costs

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