Scenario 9.8 A company operating under a continuous review system has an average demand of 50 units per week for the item it produces. The standard deviation in weekly demand is 20 units. The lead-time for the item is six weeks, and it costs the company $30 to process each order. The holding cost for each unit is $10 per year. The company operates 52 weeks per year. Use the information in Scenario 9.8. What is the economic order quantity (EOQ) for this item?

Group of answer choices

less than or equal to 175 units

greater than 175 units but less than or equal to 200 units

greater than 200 units but less than or equal to 225 units

greater than 225 units

2. Scenario C.2 Egan Schranz sells Klammelhoffer skis out of his store in the Alps. The store makes a $75 profit per unit sold during the ski season, but it will take a $25 loss per unit if sold after the season is over. The following discrete probability distribution has been estimated for the season's demand.

Demand (D)	Demand Probability
20	0.1
40	0.2
60	0.3
80	0.3
100	0.1

Use the information in Scenario C.2. What is the payoff with an order quantity (Q) of 80 units if the demand (D) is 60 units?

Group of answer choices

less than or equal to $3,000

greater than $3,000 but less than or equal to $4,000

greater than $4,000 but less than or equal to $5,000

greater than $5,000

3. Vilas County Hospital consumed 400 boxes of bandages per week last year. The price of bandages was $80 per box, and the hospital operates 52 weeks per year. The cost of processing an order was $64, and the cost of holding one box throughout a full year was 20% of the value of the material. Last year the hospital ordered bandages, on average, once every two weeks, each time ordering 800 boxes. What extra cost did the hospital incur that could have been avoided if the EOQ concept had been applied?

Group of answer choices

less than or equal to $650

more than $650 and less than $1,050

more than $1,050 and less than $1,450

more than $1,450

2.