107 7. Using the data in No. 5, what is the reorder point? Rounded. a. 192 jerseys b. 180 jerseys C. 200 jerseys d. 105 jerseys 8. The annual demand for tennis racquets is 50,000 units, and carrying costs amount to P2 per unit. Order costs of the company amount to P5. The optimum order quantity in units for tennis racquets is (rounded to the nearest unit): a. 500 b. 250 c. 100 d. 625 9. The following data is available for Taurus Company's material YY: Annual usage in units 10,000 Working days per year 250 Normal lead time in working days 30 Maximum lead time in working days 70 Assuming that the units of Material YY will be required evenly throughout the year, the order point would be: a. 2,800 b. 2,000 C. 2,105 d. 1,200 10. The Leo Company wishes to determine the amount of safety stock that it should maintain for Product D to result in the lowest cost. The following information is available: P80 per occurrence Stockout cost Carrying cost of safety stock P2 per unit 5 per year Number of purchase ordersThe options available to Leo are as follows: Units of Safety Stock 10 Probability of Running out of Safe Stock 50% 30 30% 50 10% 55 5% What is the number of units of safety stock that will result in the lowest cost? a. 55 b. 50 c. 50 d. 10 11. Aries Company has an order point at 1,400 units, usage during normal lead time of 600 units, and an EOQ of 2,000 units. Its maximum inventory assuming normal lead time and usage, would be: a. 2,800 units b. 3,400 units c. 2,000 units d. 1,200 units 12. The following data refer to various annual costs relating to the inventory of a single product company: Units transportation cost on purchases P.20 Storage cost per unit .12 Insurance cost per unit .10 Annual interest foregone from alternate investment of funds P800 Annual number of units required 10,000 What is the annual carrying cost per unit? a. P.30 b. P.42 c. P.50 d. P.2221. The Cloth Center, Inc. buys and sells fabrics to a wide range of industrial and consumer users. One of the product it carries is denim cloth, used in the manufacture of jeans and carrying bags. The supplier for the denim cloth pays all incoming freight. No incoming inspection of the denim is necessary because the supplier has a track record of delivering high-quality merchandise. The purchasing officer of the Cloth Center, Inc. has collected the following information: Annual demand for denim cloth 20,000 yards Ordering costs per purchase order P160 Carrying costs per year 205 of purchase costs Safety stock requirements None Cost of denim cloth P8 per year The purchasing lead time is 2 weeks. The Cloth Center is open 250 days a year (50 weeks for 5 days a week) What is the EOQ for denim cloth? a. 2,000 yards b. 2,200 yards c. 1,500 yards d. 2,500 yards 22. Using the data in No. 21, what is the number of orders that will be placed each year? a. 10 orders b. 12 orders c. 15 orders d. 20 orders 13. Using the data in No. 21, what is the reorder point for denim cloth? 1 800 yards b. 400 yards c. 500 yards d. 700 yards