Scenario 9.1 The Talbot Company Uses Electrical Assemblies to Produce an Array

Scenario 9.1
The Talbot Company uses electrical assemblies to produce an array of small appliances.One of its high cost / high volume assemblies,the XO-01,has an estimated annual demand of 8,000 units.Talbot estimates the cost to place an order is $50,and the holding cost for each assembly is $20 per year.The company operates 250 days per year.
-Use the information in Scenario 9.1.What is the cycle length (time between orders) when orders are placed using the EOQ quantity?

A) less than 5 days
B) greater than 5 days but less than or equal to 10 days
C) greater than 10 days but less than or equal to 15 days
D) greater than 15 days

Correct Answer:

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