1)

Your manager asked you to categorize the five inventory items carried in your store. The annual volume (units) as well as the unit cost are provided for these items (P1, P2, P3, P4, P5):

Item	Annual volume (units)	Unit cost ($)
P1	200	180
P2	75	200
P3	50	50
P4	400	60
P5	150	75

You decide to make an ABC analysis based on annual dollar volume. Which item would you consider to be the most critical?

• A.

  P2 since it has the highest annual dollar volume

• B.

  P4 since it has the highest annual unit volume

• C.

  P1 since it has the highest annual dollar volume

• D.

  P4 since it has the highest annual dollar volume

• E.

  P2 since it has the highest unit cost

2)

Students arrive randomly at the help desk of the computer lab. There is only one service agent, and the time required for inquiry varies from student to student. Arrival rates have been found to follow the Poisson distribution, and the service times follow the negative exponential distribution. The average arrival rate is 12 students per hour, and the average service rate is 20 students per hour. On average, how long does it take to service each student? A. 20 minutes B. 1 minute C. 5 minutes D. 2 minutes E. 3 minutes