5. The purchase-order lead-time is a. The difference between the times an order is placed and delivered. b. The difference between the products ordered and the products received. C. The discrepancies in purchase orders. d. The time required to correct errors in the products received. 6. If the purchase price per unit is constant, the carrying cost per unit is constant, and the ordering cost per order is constant, then the annual relevant total costs of having to have an inventory are at a minimum when a. Relevant ordering costs are greater than the relevant carrying costs b. Relevant carrying costs are greater than the relevant ordering costs. c. d. Relevant carrying costs are equal to relevant ordering costs None of the above. THE FOLLOWING APPLIES TO THE NEXT 2 QUESTIONS Based on its annual needs, ABC Company buys 10,000 units of Product X from its supplier at a purchase price of $50/unit, and has the following information available concerning this item: Relevant ordering costs per purchase order $200 Relevant carrying costs/unit per year: Required annual return on investment 10% (Hurdle Rate) Required other costs per year insurance, etc.) $3.00 HINT: When you are calculating total carrying cost/unit, don't forget to add opportunity cost to the $3.00/unit. 7. What is the economic order quantity (EOQ)? Do not round up or down a. 1,007 units 907 units C. 807 units d. 707 units What are the relevant total costs (ordering cost + carrying cost) at the economic order quantity (EOQ)? Do not round up or down a. b. $3,636 $5,656 c. d. $7,676 89.696 THE FOLLOWING APPLIES TO THE NEXT 3 QUESTIONS ABC Company annually buys 60,000 units of Part X. The EOQ is 9,000 units. The ABC Company's average usage is 200 units/day (60,000 units/300 working days) and the average lead-time is 3 days. 9. What is the reorder point with no variability in either usage or lead-time? a. 400 units b. 600 units c. 800 units d. 1,000 units