Below is output from QM for a Basic EOQ Model:

Optimal order quantity (EOQ) 500

Maximum Inventory Level 500

Orders per year 20

Annual Ordering cost 37500

Annual Carrying cost 37500

Total Inventory Cost 75000

This business experiences constant demand for 10,000 units per year. It operates 250 days a year. The lead time is 5 days. Use this information to answer questions 22 through 25.

22. The order cycle time in days is

A. 12.5

B. 20

C. 25

D. None of the above

23. The reorder point is

A. 5

B. 200

C. 250

D. 500

24. The average carrying cost per unit is

A. $75

B. $150

C. $300

D. None of the above

25. The economic order quantity is the same value as the maximum inventory level because of

A. Instantaneous receipt

B. Varying demand

C. The average inventory level

D. Equal annual Ordering and Carrying costs