Below is output from QM for a Basic EOQ Model

Parameter Value Parameter Value

Demand rate (D) 64000Optimal order quantity (Q*)3200 Ordering cost (S)2000 Maximum Inventory Level3200 Carrying cost (H)25 Average inventory1600

Orders per period (year) 20

Annual Ordering cost 40000

Annual Carrying cost 40000

Total Inventory Cost 80000

This business operates 250 days a year. The lead time is 6 days. Use this information to answer questions below.

39. The number of days required to completely deplete the optimal order quantity is

A. 12.5

B. 20

C. 2560

D. None of the above

40. The optimal 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