Question 1

Scenario: The owner of a large bicycle sales and repair business stocks a popular brand of mountain bikes. Based on historical data, the estimated annual demand for the bikes is 1375 units. The estimated average demand per day is 11 units. The purchase cost from the distributor is $765.00 per unit. The leadtime for a new order is 7 days. The ordering cost is $72.50 per order. The average holding cost per unit per year is $32.51. The business has traditionally ordered 48 units each time they placed an order. Based upon using the businesses’ current ordering model:
The owner of a bicycle repair and sales business has hired you to help him make his business more profitable. The following table shows sales data for one product for each month for the year (assume 30 days/month). These data will be referenced in order to answer questions 1 – 18.
Month
Sales
Forecast
Month 1
92
91
Month 2
78
Month 3
66
Month 4
74
Month 5
70
Month 6
84
Month 7
84
Month 8
76
Month 9
75
Month 10
63
Month 11
85
Month 12
84
Month 13
Question 1: Use a 4month moving average to calculate the sales forecast for months 5, 10 & 13.
77.25, 79.25 & 77.00
77.50, 79.75 & 76.75
78.75, 81.00 & 78.25
81.50, 81.00 & 75.50
4 points
Question 2

Question 2: Refer to the data in the Question 1 and use exponential smoothing at an alpha of 0.30 to calculate each month’s forecast. What are the forecasts for Months 4, 10 & 12?
83.92, 80.08 & 76.14
80.92, 77.74 & 76.82
80.71, 77.16 & 76.84
81.97, 79.28 & 79.38
4 points
Question 3

Question 3: Refer to the data in the Question 1 and calculate the seasonal index for Months 3 and 6.
0.85 & 1.08
0.85 & 1.09
0.87 & 1.03
0.83 & 1.06
4 points
Question 4

Question 4: Refer to the data in the Question 1 and use the forecast generated by the exponential smoothing method to calculate the MAD for the data.
9.29
8.85
8.19
7.37
4 points
Question 5

Question 5: Refer to the data in the Question 1 and calculate the Weighted Average Forecast for Months 5 – 13 where the most recent month carries a weight of 4, the next most recent month a weight of 3, the next a weight of 2 and finally the oldest month carries a weight of 1. The weights are arranged from the most recent month to the oldest month: 4, 3, 2, & 1. What are the forecasts for months 6, 9 & 13?
71.2, 79.4 & 79.2
73.7, 81.9 & 81.0
75.3, 80.5 & 77.0
70.3, 78.4 & 79.5
4 points
Question 6

Question 6: Refer to the data in the Question 1. What is the average number of units in inventory based upon ordering 48 units each time an order is placed?
31.0
32.0
27.5
24.0
3 points
Question 7

Question 7: Refer to the data in the Question 1. How many orders per year will be necessary based upon ordering 48 units each time an order is placed? Round your answer to two decimals.
20.70
22.73
28.65
20.81
3 points
Question 8

Refer to the data in the Scenario 1 for Question 1. What is the average dollar value of inventory based upon ordering 48 units each time an order is placed? (Rounded to the nearest dollar)
$18,360
$22,165
$18,838
$22,720
3 points
Question 9

Question 9: Refer to the data in the Question 1. What is the total annual cost (Purchase Cost + Ordering Cost + Holding Cost) based upon ordering 48 units each time an order is placed? (Rounded to the nearest dollar)
$858,689
$924,547
$1,054,732
$943,100
3 points
Question 10

Question 10: Refer to the data in the Question 1. What is the optimal reorder point based upon ordering 48 units each time an order is placed?
54
56
66
77
3 points
Question 11

Scenario: The president of the bicycle business has recently heard about the EOQ model and is interested in learning whether or not using this model would allow the company to reduce its annual costs by optimizing the number of orders placed each year and the number of bicycles purchased in each order. The estimated annual demand for the bicycles, estimated average demand per day, purchase cost from the bicycle manufacturer per unit, lead time for a new order, ordering cost per order and average holding cost per unit per year remain the same as stated in the scenario for the current ordering model. Based upon using the EOQ model (with instantaneous receipt):
Question 11: What is the economic order quantity (EOQ) that will minimize inventory costs?
64.64
75.35
78.31
78.97
5 points
Question 12

Question 12: Refer to the data in the Question 11. How many orders per year will be necessary based upon using the EOQ?
19.96
16.59
16.78
17.56
3 points
Question 13

Question 13: Refer to the data in the Question 11. What is the average number of units in inventory based upon ordering using the EOQ?
37.67
39.15
39.48
32.32
3 points
Question 14

Question 14: Refer to the data in the Question 11. What is the average dollar value of inventory based upon ordering using the EOQ? (Rounded to the nearest dollar)
$23,108
$25,806
$28,033
$29,953
4 points
Question 15

Question 15: Refer to the data in the Question 11. What is the total annual cost (Purchase Cost + Ordering Cost + Holding Cost) based upon using the EOQ? (Rounded to the nearest dollar)
$858,573
$943,049
$1,054,421
$924,545
5 points
Question 16

Question 16: Refer to the data in the Question 11. What is the optimal reorder point based upon using the EOQ?
54
56
66
77
3 points
Question 17

Scenario: The bicycle distributor has proposed a quantity discount schedule for mountain bikes as reflected in the following table for consideration by the president as a means to potentially reduce his total annual costs.
Discount Number
Quantity Ordered
Unit Cost Discount
1
0 to 60
0%
2
61 to 80
18%
3
81 and over
20.25%
The estimated annual demand for the bicycles, estimated average demand per day, purchase cost from the bicycle distributor per unit, lead time for a new order, ordering cost per order and average holding cost per unit per year remain the same as stated in the scenario for the current ordering model. Based upon using the quantity discount model:
Question 17: What order quantity will allow the wholesale distributor to minimize total annual inventory costs (Purchase Cost + Ordering Cost + Holding Cost) by taking advantage of the proposed discount pricing?
55
61
81
101
5 points
Question 18

Question 18: Refer to the data in the Question 17. What is the total annual cost (Purchase Cost + Ordering Cost + Holding Cost) based upon taking advantage of the proposed discount pricing? (Rounded to the nearest dollar)
$753,816
$699,941
$766,452
$841,167
4 points
Question 19

Scenario: The owner of the business stocks two types of bicycle oil: conventional and synthetic. His storeroom has room for no more than 95 cans of oil in stock. A review of his sales history suggests that at least 2.5 times as much conventional oil is sold as synthetic. Additionally experience has shown him that, due to demand, he should keep a maximum of 40 cans of conventional oil but have no less than 30 cans on hand. Experience has shown that demand for synthetic oil is somewhat unpredictable therefore he thinks he should keep a minimum of 15 cans of the synthetic in stock. He purchases the conventional oil for $4.50 per can and the synthetic oil for $5.75 and sells them for $5.50 and $7.50 respectively.
Question 19: How many cans of conventional oil should he stock in his center in order to make the maximum profit? Round down your answer to the nearest whole can.
15
20
22
30
4 points
Question 20

Refer to the data in the Scenario for Question 19. How many cans of synthetic oil should he stock in his center in order to make the maximum profit? Round down your answer to the nearest whole can.
15
20
35
41
4 points
Question 21

Refer to the data in the Scenario for Question 19. Using the rounded values for Questions 19 & 20 calculate the maximum profit.
$45.00
$65.00
$66.95
$68.25
4 points
Question 22

Scenario: The bicycle center also sells new bikes. He purchases three types of bicycles from manufacturers in kit form, then assembles, services & inspects them prior to sale. The assembly of mountain bikes requires 3.25 hours, crosscountry bikes require 2.15 hours and threewheelers require 3.85 hours of labor. Servicing mountain bikes requires 2.75 hours, crosscountry bikes require 1.75 hours and threewheelers require 4.50 hours of labor. The inspection & testing of mountain bikes requires 3.25 hours, crosscountry bikes require 3.15 hours and threewheelers require 4.25 hours of labor. The center makes a profit of $165.00 on each mountain bike, $140.50 on crosscountry bikes and $265.75 on each threewheeler. The center has 180 assembly hours, 220 service hours and 260 inspection & testing manhours available. Because spring is just around the corner the center decides that it is best if ten mountain bikes and twelve crosscountry bikes are assembled and stocked ready for sale.
Question 22: How many mountain bikes should he assemble & stock in his center in order to make the maximum profit? Round down your answer to the nearest whole bike.
10
12
14
16
5 points
Question 23

Refer to the data in the Scenario for Question 22. How many crosscountry bikes should he assemble & stock in his center in order to make the maximum profit? Round down your answer to the nearest whole bike.
11
12
14
16
4 points
Question 24

Refer to the data in the Scenario for Question 22. How many threewheeler bikes should he assemble & stock in his center in order to make the maximum profit? Round down your answer to the nearest whole bike.
21
22
31
32
4 points
Question 25

Refer to the data in the Scenario for Question 22. Using the rounded values for Questions 22 – 24 calculate the maximum profit?
$7,746.75
$11,574.25
$12,584.25
$8,171.75
4 points
Question 26

Scenario: The owner of the bike shop realized that according to the control charts the method used by his mechanics to fill and check the air pressure in mountain bike tires needed some revision. Therefore he decided to break down the procedure into eight activities and construct a PERT Diagram. After running the data (shown in the table below) Identify the Critical Path.
Activity
ES
EF
LS
LF
A
4
0
4
6
B
5
0
6
0
C
3
4
3
10
D
8
5
8
5
E
2
5
7
16
F
20
13
20
13
G
20
13
20
13
H
16
18
18
20
A, B, F & G
A, C, D, F & G
A, B, D, F & G
A, B, D, F, G & H
Question 1

Scenario: The owner of a large bicycle sales and repair business stocks a popular brand of mountain bikes. Based on historical data, the estimated annual demand for the bikes is 1375 units. The estimated average demand per day is 11 units. The purchase cost from the distributor is $765.00 per unit. The leadtime for a new order is 7 days. The ordering cost is $72.50 per order. The average holding cost per unit per year is $32.51. The business has traditionally ordered 48 units each time they placed an order. Based upon using the businesses’ current ordering model:
The owner of a bicycle repair and sales business has hired you to help him make his business more profitable. The following table shows sales data for one product for each month for the year (assume 30 days/month). These data will be referenced in order to answer questions 1 – 18.
Month
Sales
Forecast
Month 1
92
91
Month 2
78
Month 3
66
Month 4
74
Month 5
70
Month 6
84
Month 7
84
Month 8
76
Month 9
75
Month 10
63
Month 11
85
Month 12
84
Month 13
Question 1: Use a 4month moving average to calculate the sales forecast for months 5, 10 & 13.
77.25, 79.25 & 77.00
77.50, 79.75 & 76.75
78.75, 81.00 & 78.25
81.50, 81.00 & 75.50
4 points
Question 2

Question 2: Refer to the data in the Question 1 and use exponential smoothing at an alpha of 0.30 to calculate each month’s forecast. What are the forecasts for Months 4, 10 & 12?
83.92, 80.08 & 76.14
80.92, 77.74 & 76.82
80.71, 77.16 & 76.84
81.97, 79.28 & 79.38
4 points
Question 3

Question 3: Refer to the data in the Question 1 and calculate the seasonal index for Months 3 and 6.
0.85 & 1.08
0.85 & 1.09
0.87 & 1.03
0.83 & 1.06
4 points
Question 4

Question 4: Refer to the data in the Question 1 and use the forecast generated by the exponential smoothing method to calculate the MAD for the data.
9.29
8.85
8.19
7.37
4 points
Question 5

Question 5: Refer to the data in the Question 1 and calculate the Weighted Average Forecast for Months 5 – 13 where the most recent month carries a weight of 4, the next most recent month a weight of 3, the next a weight of 2 and finally the oldest month carries a weight of 1. The weights are arranged from the most recent month to the oldest month: 4, 3, 2, & 1. What are the forecasts for months 6, 9 & 13?
71.2, 79.4 & 79.2
73.7, 81.9 & 81.0
75.3, 80.5 & 77.0
70.3, 78.4 & 79.5
4 points
Question 6

Question 6: Refer to the data in the Question 1. What is the average number of units in inventory based upon ordering 48 units each time an order is placed?
31.0
32.0
27.5
24.0
3 points
Question 7

Question 7: Refer to the data in the Question 1. How many orders per year will be necessary based upon ordering 48 units each time an order is placed? Round your answer to two decimals.
20.70
22.73
28.65
20.81
3 points
Question 8

Refer to the data in the Scenario 1 for Question 1. What is the average dollar value of inventory based upon ordering 48 units each time an order is placed? (Rounded to the nearest dollar)
$18,360
$22,165
$18,838
$22,720
3 points
Question 9

Question 9: Refer to the data in the Question 1. What is the total annual cost (Purchase Cost + Ordering Cost + Holding Cost) based upon ordering 48 units each time an order is placed? (Rounded to the nearest dollar)
$858,689
$924,547
$1,054,732
$943,100
3 points
Question 10

Question 10: Refer to the data in the Question 1. What is the optimal reorder point based upon ordering 48 units each time an order is placed?
54
56
66
77
3 points
Question 11

Scenario: The president of the bicycle business has recently heard about the EOQ model and is interested in learning whether or not using this model would allow the company to reduce its annual costs by optimizing the number of orders placed each year and the number of bicycles purchased in each order. The estimated annual demand for the bicycles, estimated average demand per day, purchase cost from the bicycle manufacturer per unit, lead time for a new order, ordering cost per order and average holding cost per unit per year remain the same as stated in the scenario for the current ordering model. Based upon using the EOQ model (with instantaneous receipt):
Question 11: What is the economic order quantity (EOQ) that will minimize inventory costs?
64.64
75.35
78.31
78.97
5 points
Question 12

Question 12: Refer to the data in the Question 11. How many orders per year will be necessary based upon using the EOQ?
19.96
16.59
16.78
17.56
3 points
Question 13

Question 13: Refer to the data in the Question 11. What is the average number of units in inventory based upon ordering using the EOQ?
37.67
39.15
39.48
32.32
3 points
Question 14

Question 14: Refer to the data in the Question 11. What is the average dollar value of inventory based upon ordering using the EOQ? (Rounded to the nearest dollar)
$23,108
$25,806
$28,033
$29,953
4 points
Question 15

Question 15: Refer to the data in the Question 11. What is the total annual cost (Purchase Cost + Ordering Cost + Holding Cost) based upon using the EOQ? (Rounded to the nearest dollar)
$858,573
$943,049
$1,054,421
$924,545
5 points
Question 16

Question 16: Refer to the data in the Question 11. What is the optimal reorder point based upon using the EOQ?
54
56
66
77
3 points
Question 17

Scenario: The bicycle distributor has proposed a quantity discount schedule for mountain bikes as reflected in the following table for consideration by the president as a means to potentially reduce his total annual costs.
Discount Number
Quantity Ordered
Unit Cost Discount
1
0 to 60
0%
2
61 to 80
18%
3
81 and over
20.25%
The estimated annual demand for the bicycles, estimated average demand per day, purchase cost from the bicycle distributor per unit, lead time for a new order, ordering cost per order and average holding cost per unit per year remain the same as stated in the scenario for the current ordering model. Based upon using the quantity discount model:
Question 17: What order quantity will allow the wholesale distributor to minimize total annual inventory costs (Purchase Cost + Ordering Cost + Holding Cost) by taking advantage of the proposed discount pricing?
55
61
81
101
5 points
Question 18

Question 18: Refer to the data in the Question 17. What is the total annual cost (Purchase Cost + Ordering Cost + Holding Cost) based upon taking advantage of the proposed discount pricing? (Rounded to the nearest dollar)
$753,816
$699,941
$766,452
$841,167
4 points
Question 19

Scenario: The owner of the business stocks two types of bicycle oil: conventional and synthetic. His storeroom has room for no more than 95 cans of oil in stock. A review of his sales history suggests that at least 2.5 times as much conventional oil is sold as synthetic. Additionally experience has shown him that, due to demand, he should keep a maximum of 40 cans of conventional oil but have no less than 30 cans on hand. Experience has shown that demand for synthetic oil is somewhat unpredictable therefore he thinks he should keep a minimum of 15 cans of the synthetic in stock. He purchases the conventional oil for $4.50 per can and the synthetic oil for $5.75 and sells them for $5.50 and $7.50 respectively.
Question 19: How many cans of conventional oil should he stock in his center in order to make the maximum profit? Round down your answer to the nearest whole can.
15
20
22
30
4 points
Question 20

Refer to the data in the Scenario for Question 19. How many cans of synthetic oil should he stock in his center in order to make the maximum profit? Round down your answer to the nearest whole can.
15
20
35
41
4 points
Question 21

Refer to the data in the Scenario for Question 19. Using the rounded values for Questions 19 & 20 calculate the maximum profit.
$45.00
$65.00
$66.95
$68.25
4 points
Question 22

Scenario: The bicycle center also sells new bikes. He purchases three types of bicycles from manufacturers in kit form, then assembles, services & inspects them prior to sale. The assembly of mountain bikes requires 3.25 hours, crosscountry bikes require 2.15 hours and threewheelers require 3.85 hours of labor. Servicing mountain bikes requires 2.75 hours, crosscountry bikes require 1.75 hours and threewheelers require 4.50 hours of labor. The inspection & testing of mountain bikes requires 3.25 hours, crosscountry bikes require 3.15 hours and threewheelers require 4.25 hours of labor. The center makes a profit of $165.00 on each mountain bike, $140.50 on crosscountry bikes and $265.75 on each threewheeler. The center has 180 assembly hours, 220 service hours and 260 inspection & testing manhours available. Because spring is just around the corner the center decides that it is best if ten mountain bikes and twelve crosscountry bikes are assembled and stocked ready for sale.
Question 22: How many mountain bikes should he assemble & stock in his center in order to make the maximum profit? Round down your answer to the nearest whole bike.
10
12
14
16
5 points
Question 23

Refer to the data in the Scenario for Question 22. How many crosscountry bikes should he assemble & stock in his center in order to make the maximum profit? Round down your answer to the nearest whole bike.
11
12
14
16
4 points
Question 24

Refer to the data in the Scenario for Question 22. How many threewheeler bikes should he assemble & stock in his center in order to make the maximum profit? Round down your answer to the nearest whole bike.
21
22
31
32
4 points
Question 25

Refer to the data in the Scenario for Question 22. Using the rounded values for Questions 22 – 24 calculate the maximum profit?
$7,746.75
$11,574.25
$12,584.25
$8,171.75
4 points
Question 26

Scenario: The owner of the bike shop realized that according to the control charts the method used by his mechanics to fill and check the air pressure in mountain bike tires needed some revision. Therefore he decided to break down the procedure into eight activities and construct a PERT Diagram. After running the data (shown in the table below) Identify the Critical Path.
Activity
ES
EF
LS
LF
A
4
0
4
6
B
5
0
6
0
C
3
4
3
10
D
8
5
8
5
E
2
5
7
16
F
20
13
20
13
G
20
13
20
13
H
16
18
18
20
A, B, F & G
A, C, D, F & G
A, B, D, F & G
A, B, D, F, G & H
Question 1

Scenario: The owner of a large bicycle sales and repair business stocks a popular brand of mountain bikes. Based on historical data, the estimated annual demand for the bikes is 1375 units. The estimated average demand per day is 11 units. The purchase cost from the distributor is $765.00 per unit. The leadtime for a new order is 7 days. The ordering cost is $72.50 per order. The average holding cost per unit per year is $32.51. The business has traditionally ordered 48 units each time they placed an order. Based upon using the businesses’ current ordering model:
The owner of a bicycle repair and sales business has hired you to help him make his business more profitable. The following table shows sales data for one product for each month for the year (assume 30 days/month). These data will be referenced in order to answer questions 1 – 18.
Month
Sales
Forecast
Month 1
92
91
Month 2
78
Month 3
66
Month 4
74
Month 5
70
Month 6
84
Month 7
84
Month 8
76
Month 9
75
Month 10
63
Month 11
85
Month 12
84
Month 13
Question 1: Use a 4month moving average to calculate the sales forecast for months 5, 10 & 13.
77.25, 79.25 & 77.00
77.50, 79.75 & 76.75
78.75, 81.00 & 78.25
81.50, 81.00 & 75.50
4 points
Question 2

Question 2: Refer to the data in the Question 1 and use exponential smoothing at an alpha of 0.30 to calculate each month’s forecast. What are the forecasts for Months 4, 10 & 12?
83.92, 80.08 & 76.14
80.92, 77.74 & 76.82
80.71, 77.16 & 76.84
81.97, 79.28 & 79.38
4 points
Question 3

Question 3: Refer to the data in the Question 1 and calculate the seasonal index for Months 3 and 6.
0.85 & 1.08
0.85 & 1.09
0.87 & 1.03
0.83 & 1.06
4 points
Question 4

Question 4: Refer to the data in the Question 1 and use the forecast generated by the exponential smoothing method to calculate the MAD for the data.
9.29
8.85
8.19
7.37
4 points
Question 5

Question 5: Refer to the data in the Question 1 and calculate the Weighted Average Forecast for Months 5 – 13 where the most recent month carries a weight of 4, the next most recent month a weight of 3, the next a weight of 2 and finally the oldest month carries a weight of 1. The weights are arranged from the most recent month to the oldest month: 4, 3, 2, & 1. What are the forecasts for months 6, 9 & 13?
71.2, 79.4 & 79.2
73.7, 81.9 & 81.0
75.3, 80.5 & 77.0
70.3, 78.4 & 79.5
4 points
Question 6

Question 6: Refer to the data in the Question 1. What is the average number of units in inventory based upon ordering 48 units each time an order is placed?
31.0
32.0
27.5
24.0
3 points
Question 7

Question 7: Refer to the data in the Question 1. How many orders per year will be necessary based upon ordering 48 units each time an order is placed? Round your answer to two decimals.
20.70
22.73
28.65
20.81
3 points
Question 8

Refer to the data in the Scenario 1 for Question 1. What is the average dollar value of inventory based upon ordering 48 units each time an order is placed? (Rounded to the nearest dollar)
$18,360
$22,165
$18,838
$22,720
3 points
Question 9

Question 9: Refer to the data in the Question 1. What is the total annual cost (Purchase Cost + Ordering Cost + Holding Cost) based upon ordering 48 units each time an order is placed? (Rounded to the nearest dollar)
$858,689
$924,547
$1,054,732
$943,100
3 points
Question 10

Question 10: Refer to the data in the Question 1. What is the optimal reorder point based upon ordering 48 units each time an order is placed?
54
56
66
77
3 points
Question 11

Scenario: The president of the bicycle business has recently heard about the EOQ model and is interested in learning whether or not using this model would allow the company to reduce its annual costs by optimizing the number of orders placed each year and the number of bicycles purchased in each order. The estimated annual demand for the bicycles, estimated average demand per day, purchase cost from the bicycle manufacturer per unit, lead time for a new order, ordering cost per order and average holding cost per unit per year remain the same as stated in the scenario for the current ordering model. Based upon using the EOQ model (with instantaneous receipt):
Question 11: What is the economic order quantity (EOQ) that will minimize inventory costs?
64.64
75.35
78.31
78.97
5 points
Question 12

Question 12: Refer to the data in the Question 11. How many orders per year will be necessary based upon using the EOQ?
19.96
16.59
16.78
17.56
3 points
Question 13

Question 13: Refer to the data in the Question 11. What is the average number of units in inventory based upon ordering using the EOQ?
37.67
39.15
39.48
32.32
3 points
Question 14

Question 14: Refer to the data in the Question 11. What is the average dollar value of inventory based upon ordering using the EOQ? (Rounded to the nearest dollar)
$23,108
$25,806
$28,033
$29,953
4 points
Question 15

Question 15: Refer to the data in the Question 11. What is the total annual cost (Purchase Cost + Ordering Cost + Holding Cost) based upon using the EOQ? (Rounded to the nearest dollar)
$858,573
$943,049
$1,054,421
$924,545
5 points
Question 16

Question 16: Refer to the data in the Question 11. What is the optimal reorder point based upon using the EOQ?
54
56
66
77
3 points
Question 17

Scenario: The bicycle distributor has proposed a quantity discount schedule for mountain bikes as reflected in the following table for consideration by the president as a means to potentially reduce his total annual costs.
Discount Number
Quantity Ordered
Unit Cost Discount
1
0 to 60
0%
2
61 to 80
18%
3
81 and over
20.25%
The estimated annual demand for the bicycles, estimated average demand per day, purchase cost from the bicycle distributor per unit, lead time for a new order, ordering cost per order and average holding cost per unit per year remain the same as stated in the scenario for the current ordering model. Based upon using the quantity discount model:
Question 17: What order quantity will allow the wholesale distributor to minimize total annual inventory costs (Purchase Cost + Ordering Cost + Holding Cost) by taking advantage of the proposed discount pricing?
55
61
81
101
5 points
Question 18

Question 18: Refer to the data in the Question 17. What is the total annual cost (Purchase Cost + Ordering Cost + Holding Cost) based upon taking advantage of the proposed discount pricing? (Rounded to the nearest dollar)
$753,816
$699,941
$766,452
$841,167
4 points
Question 19

Scenario: The owner of the business stocks two types of bicycle oil: conventional and synthetic. His storeroom has room for no more than 95 cans of oil in stock. A review of his sales history suggests that at least 2.5 times as much conventional oil is sold as synthetic. Additionally experience has shown him that, due to demand, he should keep a maximum of 40 cans of conventional oil but have no less than 30 cans on hand. Experience has shown that demand for synthetic oil is somewhat unpredictable therefore he thinks he should keep a minimum of 15 cans of the synthetic in stock. He purchases the conventional oil for $4.50 per can and the synthetic oil for $5.75 and sells them for $5.50 and $7.50 respectively.
Question 19: How many cans of conventional oil should he stock in his center in order to make the maximum profit? Round down your answer to the nearest whole can.
15
20
22
30
4 points
Question 20

Refer to the data in the Scenario for Question 19. How many cans of synthetic oil should he stock in his center in order to make the maximum profit? Round down your answer to the nearest whole can.
15
20
35
41
4 points
Question 21

Refer to the data in the Scenario for Question 19. Using the rounded values for Questions 19 & 20 calculate the maximum profit.
$45.00
$65.00
$66.95
$68.25
4 points
Question 22

Scenario: The bicycle center also sells new bikes. He purchases three types of bicycles from manufacturers in kit form, then assembles, services & inspects them prior to sale. The assembly of mountain bikes requires 3.25 hours, crosscountry bikes require 2.15 hours and threewheelers require 3.85 hours of labor. Servicing mountain bikes requires 2.75 hours, crosscountry bikes require 1.75 hours and threewheelers require 4.50 hours of labor. The inspection & testing of mountain bikes requires 3.25 hours, crosscountry bikes require 3.15 hours and threewheelers require 4.25 hours of labor. The center makes a profit of $165.00 on each mountain bike, $140.50 on crosscountry bikes and $265.75 on each threewheeler. The center has 180 assembly hours, 220 service hours and 260 inspection & testing manhours available. Because spring is just around the corner the center decides that it is best if ten mountain bikes and twelve crosscountry bikes are assembled and stocked ready for sale.
Question 22: How many mountain bikes should he assemble & stock in his center in order to make the maximum profit? Round down your answer to the nearest whole bike.
10
12
14
16
5 points
Question 23

Refer to the data in the Scenario for Question 22. How many crosscountry bikes should he assemble & stock in his center in order to make the maximum profit? Round down your answer to the nearest whole bike.
11
12
14
16
4 points
Question 24

Refer to the data in the Scenario for Question 22. How many threewheeler bikes should he assemble & stock in his center in order to make the maximum profit? Round down your answer to the nearest whole bike.
21
22
31
32
4 points
Question 25

Refer to the data in the Scenario for Question 22. Using the rounded values for Questions 22 – 24 calculate the maximum profit?
$7,746.75
$11,574.25
$12,584.25
$8,171.75
4 points
Question 26

Scenario: The owner of the bike shop realized that according to the control charts the method used by his mechanics to fill and check the air pressure in mountain bike tires needed some revision. Therefore he decided to break down the procedure into eight activities and construct a PERT Diagram. After running the data (shown in the table below) Identify the Critical Path.
Activity
ES
EF
LS
LF
A
4
0
4
6
B
5
0
6
0
C
3
4
3
10
D
8
5
8
5
E
2
5
7
16
F
20
13
20
13
G
20
13
20
13
H
16
18
18
20
A, B, F & G
A, C, D, F & G
A, B, D, F & G
A, B, D, F, G & H
Question 1
Question 1

Scenario: The owner of a large bicycle sales and repair business stocks a popular brand of mountain bikes. Based on historical data, the estimated annual demand for the bikes is 1375 units. The estimated average demand per day is 11 units. The purchase cost from the distributor is $765.00 per unit. The leadtime for a new order is 7 days. The ordering cost is $72.50 per order. The average holding cost per unit per year is $32.51. The business has traditionally ordered 48 units each time they placed an order. Based upon using the businesses’ current ordering model:
The owner of a bicycle repair and sales business has hired you to help him make his business more profitable. The following table shows sales data for one product for each month for the year (assume 30 days/month). These data will be referenced in order to answer questions 1 – 18.
Month
Sales
Forecast
Month 1
92
91
Month 2
78
Month 3
66
Month 4
74
Month 5
70
Month 6
84
Month 7
84
Month 8
76
Month 9
75
Month 10
63
Month 11
85
Month 12
84
Month 13
Question 1: Use a 4month moving average to calculate the sales forecast for months 5, 10 & 13.
77.25, 79.25 & 77.00
77.50, 79.75 & 76.75
78.75, 81.00 & 78.25
81.50, 81.00 & 75.50
Scenario: The owner of a large bicycle sales and repair business stocks a popular brand of mountain bikes. Based on historical data, the estimated annual demand for the bikes is 1375 units. The estimated average demand per day is 11 units. The purchase cost from the distributor is $765.00 per unit. The leadtime for a new order is 7 days. The ordering cost is $72.50 per order. The average holding cost per unit per year is $32.51. The business has traditionally ordered 48 units each time they placed an order. Based upon using the businesses’ current ordering model:
The owner of a bicycle repair and sales business has hired you to help him make his business more profitable. The following table shows sales data for one product for each month for the year (assume 30 days/month). These data will be referenced in order to answer questions 1 – 18.
Month 
Sales 
Forecast 
Month 1 
92 
91 
Month 2 
78 

Month 3 
66 

Month 4 
74 

Month 5 
70 

Month 6 
84 

Month 7 
84 

Month 8 
76 

Month 9 
75 

Month 10 
63 

Month 11 
85 

Month 12 
84 

Month 13 


Question 1: Use a 4month moving average to calculate the sales forecast for months 5, 10 & 13.
77.25, 79.25 & 77.00 
77.50, 79.75 & 76.75 
78.75, 81.00 & 78.25 
81.50, 81.00 & 75.50 
Scenario: The owner of a large bicycle sales and repair business stocks a popular brand of mountain bikes. Based on historical data, the estimated annual demand for the bikes is 1375 units. The estimated average demand per day is 11 units. The purchase cost from the distributor is $765.00 per unit. The leadtime for a new order is 7 days. The ordering cost is $72.50 per order. The average holding cost per unit per year is $32.51. The business has traditionally ordered 48 units each time they placed an order. Based upon using the businesses’ current ordering model:
The owner of a bicycle repair and sales business has hired you to help him make his business more profitable. The following table shows sales data for one product for each month for the year (assume 30 days/month). These data will be referenced in order to answer questions 1 – 18.
Month 
Sales 
Forecast 
Month 1 
92 
91 
Month 2 
78 

Month 3 
66 

Month 4 
74 

Month 5 
70 

Month 6 
84 

Month 7 
84 

Month 8 
76 

Month 9 
75 

Month 10 
63 

Month 11 
85 

Month 12 
84 

Month 13 


Month
Sales
Forecast
Month 1
92
91
Month 2
78
Month 3
66
Month 4
74
Month 5
70
Month 6
84
Month 7
84
Month 8
76
Month 9
75
Month 10
63
Month 11
85
Month 12
84
Month 13
Month
Sales
Forecast
Month
Month
Sales
Sales
Forecast
Forecast
Month 1
92
91
Month 1
Month 1
92
92
91
91
Month 2
78
Month 2
Month 2
78
78
Month 3
66
Month 3
Month 3
66
66
Month 4
74
Month 4
Month 4
74
74
Month 5
70
Month 5
Month 5
70
70
Month 6
84
Month 6
Month 6
84
84
Month 7
84
Month 7
Month 7
84
84
Month 8
76
Month 8
Month 8
76
76
Month 9
75
Month 9
Month 9
75
75
Month 10
63
Month 10
Month 10
63
63
Month 11
85
Month 11
Month 11
85
85
Month 12
84
Month 12
Month 12
84
84
Month 13
Month 13
Month 13
Question 1: Use a 4month moving average to calculate the sales forecast for months 5, 10 & 13.
77.25, 79.25 & 77.00 
77.50, 79.75 & 76.75 
78.75, 81.00 & 78.25 
81.50, 81.00 & 75.50 
77.25, 79.25 & 77.00
77.50, 79.75 & 76.75
78.75, 81.00 & 78.25
81.50, 81.00 & 75.50
77.25, 79.25 & 77.00
77.25, 79.25 & 77.00
77.25, 79.25 & 77.00
77.50, 79.75 & 76.75
77.50, 79.75 & 76.75
77.50, 79.75 & 76.75
78.75, 81.00 & 78.25
78.75, 81.00 & 78.25
78.75, 81.00 & 78.25
81.50, 81.00 & 75.50
81.50, 81.00 & 75.50
81.50, 81.00 & 75.50
4 points
Question 2
Question 2

Question 2: Refer to the data in the Question 1 and use exponential smoothing at an alpha of 0.30 to calculate each month’s forecast. What are the forecasts for Months 4, 10 & 12?
83.92, 80.08 & 76.14
80.92, 77.74 & 76.82
80.71, 77.16 & 76.84
81.97, 79.28 & 79.38
Question 2: Refer to the data in the Question 1 and use exponential smoothing at an alpha of 0.30 to calculate each month’s forecast. What are the forecasts for Months 4, 10 & 12?
83.92, 80.08 & 76.14 
80.92, 77.74 & 76.82 
80.71, 77.16 & 76.84 
81.97, 79.28 & 79.38 
Question 2: Refer to the data in the Question 1 and use exponential smoothing at an alpha of 0.30 to calculate each month’s forecast. What are the forecasts for Months 4, 10 & 12?
83.92, 80.08 & 76.14 
80.92, 77.74 & 76.82 
80.71, 77.16 & 76.84 
81.97, 79.28 & 79.38 
83.92, 80.08 & 76.14
80.92, 77.74 & 76.82
80.71, 77.16 & 76.84
81.97, 79.28 & 79.38
83.92, 80.08 & 76.14
83.92, 80.08 & 76.14
83.92, 80.08 & 76.14
80.92, 77.74 & 76.82
80.92, 77.74 & 76.82
80.92, 77.74 & 76.82
80.71, 77.16 & 76.84
80.71, 77.16 & 76.84
80.71, 77.16 & 76.84
81.97, 79.28 & 79.38
81.97, 79.28 & 79.38
81.97, 79.28 & 79.38
4 points
Question 3
Question 3

Question 3: Refer to the data in the Question 1 and calculate the seasonal index for Months 3 and 6.
0.85 & 1.08
0.85 & 1.09
0.87 & 1.03
0.83 & 1.06
Question 3: Refer to the data in the Question 1 and calculate the seasonal index for Months 3 and 6.
0.85 & 1.08 
0.85 & 1.09 
0.87 & 1.03 
0.83 & 1.06 
Question 3: Refer to the data in the Question 1 and calculate the seasonal index for Months 3 and 6.
0.85 & 1.08 
0.85 & 1.09 
0.87 & 1.03 
0.83 & 1.06 
0.85 & 1.08
0.85 & 1.09
0.87 & 1.03
0.83 & 1.06
0.85 & 1.08
0.85 & 1.08
0.85 & 1.08
0.85 & 1.09
0.85 & 1.09
0.85 & 1.09
0.87 & 1.03
0.87 & 1.03
0.87 & 1.03
0.83 & 1.06
0.83 & 1.06
0.83 & 1.06
4 points
Question 4
Question 4

Question 4: Refer to the data in the Question 1 and use the forecast generated by the exponential smoothing method to calculate the MAD for the data.
9.29
8.85
8.19
7.37
Question 4: Refer to the data in the Question 1 and use the forecast generated by the exponential smoothing method to calculate the MAD for the data.
9.29 
8.85 
8.19 
7.37 
Question 4: Refer to the data in the Question 1 and use the forecast generated by the exponential smoothing method to calculate the MAD for the data.
9.29 
8.85 
8.19 
7.37 
9.29
8.85
8.19
7.37
9.29
9.29
9.29
8.85
8.85
8.85
8.19
8.19
8.19
7.37
7.37
7.37
4 points
Question 5
Question 5

Question 5: Refer to the data in the Question 1 and calculate the Weighted Average Forecast for Months 5 – 13 where the most recent month carries a weight of 4, the next most recent month a weight of 3, the next a weight of 2 and finally the oldest month carries a weight of 1. The weights are arranged from the most recent month to the oldest month: 4, 3, 2, & 1. What are the forecasts for months 6, 9 & 13?
71.2, 79.4 & 79.2
73.7, 81.9 & 81.0
75.3, 80.5 & 77.0
70.3, 78.4 & 79.5
Question 5: Refer to the data in the Question 1 and calculate the Weighted Average Forecast for Months 5 – 13 where the most recent month carries a weight of 4, the next most recent month a weight of 3, the next a weight of 2 and finally the oldest month carries a weight of 1. The weights are arranged from the most recent month to the oldest month: 4, 3, 2, & 1. What are the forecasts for months 6, 9 & 13?
71.2, 79.4 & 79.2 
73.7, 81.9 & 81.0 
75.3, 80.5 & 77.0 
70.3, 78.4 & 79.5 
Question 5: Refer to the data in the Question 1 and calculate the Weighted Average Forecast for Months 5 – 13 where the most recent month carries a weight of 4, the next most recent month a weight of 3, the next a weight of 2 and finally the oldest month carries a weight of 1. The weights are arranged from the most recent month to the oldest month: 4, 3, 2, & 1. What are the forecasts for months 6, 9 & 13?
71.2, 79.4 & 79.2 
73.7, 81.9 & 81.0 
75.3, 80.5 & 77.0 
70.3, 78.4 & 79.5 
71.2, 79.4 & 79.2
73.7, 81.9 & 81.0
75.3, 80.5 & 77.0
70.3, 78.4 & 79.5
71.2, 79.4 & 79.2
71.2, 79.4 & 79.2
71.2, 79.4 & 79.2
73.7, 81.9 & 81.0
73.7, 81.9 & 81.0
73.7, 81.9 & 81.0
75.3, 80.5 & 77.0
75.3, 80.5 & 77.0
75.3, 80.5 & 77.0
70.3, 78.4 & 79.5
70.3, 78.4 & 79.5
70.3, 78.4 & 79.5
4 points
Question 6
Question 6

Question 6: Refer to the data in the Question 1. What is the average number of units in inventory based upon ordering 48 units each time an order is placed?
31.0
32.0
27.5
24.0
Question 6: Refer to the data in the Question 1. What is the average number of units in inventory based upon ordering 48 units each time an order is placed?
31.0 
32.0 
27.5 
24.0 
Question 6: Refer to the data in the Question 1. What is the average number of units in inventory based upon ordering 48 units each time an order is placed?
31.0 
32.0 
27.5 
24.0 
31.0
32.0
27.5
24.0
31.0
31.0
31.0
32.0
32.0
32.0
27.5
27.5
27.5
24.0
24.0
24.0
3 points
Question 7
Question 7

Question 7: Refer to the data in the Question 1. How many orders per year will be necessary based upon ordering 48 units each time an order is placed? Round your answer to two decimals.
20.70
22.73
28.65
20.81
Question 7: Refer to the data in the Question 1. How many orders per year will be necessary based upon ordering 48 units each time an order is placed? Round your answer to two decimals.
20.70 
22.73 
28.65 
20.81 
Question 7: Refer to the data in the Question 1. How many orders per year will be necessary based upon ordering 48 units each time an order is placed? Round your answer to two decimals.
20.70 
22.73 
28.65 
20.81 
20.70
22.73
28.65
20.81
20.70
20.70
20.70
22.73
22.73
22.73
28.65
28.65
28.65
20.81
20.81
20.81
3 points
Question 8
Question 8

Refer to the data in the Scenario 1 for Question 1. What is the average dollar value of inventory based upon ordering 48 units each time an order is placed? (Rounded to the nearest dollar)
$18,360
$22,165
$18,838
$22,720
Refer to the data in the Scenario 1 for Question 1. What is the average dollar value of inventory based upon ordering 48 units each time an order is placed? (Rounded to the nearest dollar)
$18,360 
$22,165 
$18,838 
$22,720 
Refer to the data in the Scenario 1 for Question 1. What is the average dollar value of inventory based upon ordering 48 units each time an order is placed? (Rounded to the nearest dollar)
$18,360 
$22,165 
$18,838 
$22,720 
$18,360
$22,165
$18,838
$22,720
$18,360
$18,360
$18,360
$22,165
$22,165
$22,165
$18,838
$18,838
$18,838
$22,720
$22,720
$22,720
3 points
Question 9
Question 9

Question 9: Refer to the data in the Question 1. What is the total annual cost (Purchase Cost + Ordering Cost + Holding Cost) based upon ordering 48 units each time an order is placed? (Rounded to the nearest dollar)
$858,689
$924,547
$1,054,732
$943,100
Question 9: Refer to the data in the Question 1. What is the total annual cost (Purchase Cost + Ordering Cost + Holding Cost) based upon ordering 48 units each time an order is placed? (Rounded to the nearest dollar)
$858,689 
$924,547 
$1,054,732 
$943,100 
Question 9: Refer to the data in the Question 1. What is the total annual cost (Purchase Cost + Ordering Cost + Holding Cost) based upon ordering 48 units each time an order is placed? (Rounded to the nearest dollar)
$858,689 
$924,547 
$1,054,732 
$943,100 
$858,689
$924,547
$1,054,732
$943,100
$858,689
$858,689
$858,689
$924,547
$924,547
$924,547
$1,054,732
$1,054,732
$1,054,732
$943,100
$943,100
$943,100
3 points
Question 10
Question 10

Question 10: Refer to the data in the Question 1. What is the optimal reorder point based upon ordering 48 units each time an order is placed?
54
56
66
77
Question 10: Refer to the data in the Question 1. What is the optimal reorder point based upon ordering 48 units each time an order is placed?
54 
56 
66 
77 
Question 10: Refer to the data in the Question 1. What is the optimal reorder point based upon ordering 48 units each time an order is placed?
54 
56 
66 
77 
54
56
66
77
54
54
54
56
56
56
66
66
66
77
77
77
3 points
Question 11
Question 11

Scenario: The president of the bicycle business has recently heard about the EOQ model and is interested in learning whether or not using this model would allow the company to reduce its annual costs by optimizing the number of orders placed each year and the number of bicycles purchased in each order. The estimated annual demand for the bicycles, estimated average demand per day, purchase cost from the bicycle manufacturer per unit, lead time for a new order, ordering cost per order and average holding cost per unit per year remain the same as stated in the scenario for the current ordering model. Based upon using the EOQ model (with instantaneous receipt):
Question 11: What is the economic order quantity (EOQ) that will minimize inventory costs?
64.64
75.35
78.31
78.97
Scenario: The president of the bicycle business has recently heard about the EOQ model and is interested in learning whether or not using this model would allow the company to reduce its annual costs by optimizing the number of orders placed each year and the number of bicycles purchased in each order. The estimated annual demand for the bicycles, estimated average demand per day, purchase cost from the bicycle manufacturer per unit, lead time for a new order, ordering cost per order and average holding cost per unit per year remain the same as stated in the scenario for the current ordering model. Based upon using the EOQ model (with instantaneous receipt):
Question 11: What is the economic order quantity (EOQ) that will minimize inventory costs?
64.64 
75.35 
78.31 
78.97 
Scenario: The president of the bicycle business has recently heard about the EOQ model and is interested in learning whether or not using this model would allow the company to reduce its annual costs by optimizing the number of orders placed each year and the number of bicycles purchased in each order. The estimated annual demand for the bicycles, estimated average demand per day, purchase cost from the bicycle manufacturer per unit, lead time for a new order, ordering cost per order and average holding cost per unit per year remain the same as stated in the scenario for the current ordering model. Based upon using the EOQ model (with instantaneous receipt):
Question 11: What is the economic order quantity (EOQ) that will minimize inventory costs?
64.64 
75.35 
78.31 
78.97 
64.64
75.35
78.31
78.97
64.64
64.64
64.64
75.35
75.35
75.35
78.31
78.31
78.31
78.97
78.97
78.97
5 points
Question 12
Question 12

Question 12: Refer to the data in the Question 11. How many orders per year will be necessary based upon using the EOQ?
19.96
16.59
16.78
17.56
Question 12: Refer to the data in the Question 11. How many orders per year will be necessary based upon using the EOQ?
19.96 
16.59 
16.78 
17.56 
Question 12: Refer to the data in the Question 11. How many orders per year will be necessary based upon using the EOQ?
19.96 
16.59 
16.78 
17.56 
19.96
16.59
16.78
17.56
19.96
19.96
19.96
16.59
16.59
16.59
16.78
16.78
16.78
17.56
17.56
17.56
3 points
Question 13
Question 13

Question 13: Refer to the data in the Question 11. What is the average number of units in inventory based upon ordering using the EOQ?
37.67
39.15
39.48
32.32
Question 13: Refer to the data in the Question 11. What is the average number of units in inventory based upon ordering using the EOQ?
37.67 
39.15 
39.48 
32.32 
Question 13: Refer to the data in the Question 11. What is the average number of units in inventory based upon ordering using the EOQ?
37.67 
39.15 
39.48 
32.32 
37.67
39.15
39.48
32.32
37.67
37.67
37.67
39.15
39.15
39.15
39.48
39.48
39.48
32.32
32.32
32.32
3 points
Question 14
Question 14

Question 14: Refer to the data in the Question 11. What is the average dollar value of inventory based upon ordering using the EOQ? (Rounded to the nearest dollar)
$23,108
$25,806
$28,033
$29,953
Question 14: Refer to the data in the Question 11. What is the average dollar value of inventory based upon ordering using the EOQ? (Rounded to the nearest dollar)
$23,108 
$25,806 
$28,033 
$29,953 
Question 14: Refer to the data in the Question 11. What is the average dollar value of inventory based upon ordering using the EOQ? (Rounded to the nearest dollar)
$23,108 
$25,806 
$28,033 
$29,953 
$23,108
$25,806
$28,033
$29,953
$23,108
$23,108
$23,108
$25,806
$25,806
$25,806
$28,033
$28,033
$28,033
$29,953
$29,953
$29,953
4 points
Question 15
Question 15

Question 15: Refer to the data in the Question 11. What is the total annual cost (Purchase Cost + Ordering Cost + Holding Cost) based upon using the EOQ? (Rounded to the nearest dollar)
$858,573
$943,049
$1,054,421
$924,545
Question 15: Refer to the data in the Question 11. What is the total annual cost (Purchase Cost + Ordering Cost + Holding Cost) based upon using the EOQ? (Rounded to the nearest dollar)
$858,573 
$943,049 
$1,054,421 
$924,545 
Question 15: Refer to the data in the Question 11. What is the total annual cost (Purchase Cost + Ordering Cost + Holding Cost) based upon using the EOQ? (Rounded to the nearest dollar)
$858,573 
$943,049 
$1,054,421 
$924,545 
$858,573
$943,049
$1,054,421
$924,545
$858,573
$858,573
$858,573
$943,049
$943,049
$943,049
$1,054,421
$1,054,421
$1,054,421
$924,545
$924,545
$924,545
5 points
Question 16
Question 16

Question 16: Refer to the data in the Question 11. What is the optimal reorder point based upon using the EOQ?
54
56
66
77
Question 16: Refer to the data in the Question 11. What is the optimal reorder point based upon using the EOQ?
54 
56 
66 
77 
Question 16: Refer to the data in the Question 11. What is the optimal reorder point based upon using the EOQ?
54 
56 
66 
77 
54
56
66
77
54
54
54
56
56
56
66
66
66
77
77
77
3 points
Question 17
Question 17

Scenario: The bicycle distributor has proposed a quantity discount schedule for mountain bikes as reflected in the following table for consideration by the president as a means to potentially reduce his total annual costs.
Discount Number
Quantity Ordered
Unit Cost Discount
1
0 to 60
0%
2
61 to 80
18%
3
81 and over
20.25%
The estimated annual demand for the bicycles, estimated average demand per day, purchase cost from the bicycle distributor per unit, lead time for a new order, ordering cost per order and average holding cost per unit per year remain the same as stated in the scenario for the current ordering model. Based upon using the quantity discount model:
Question 17: What order quantity will allow the wholesale distributor to minimize total annual inventory costs (Purchase Cost + Ordering Cost + Holding Cost) by taking advantage of the proposed discount pricing?
55
61
81
101
Scenario: The bicycle distributor has proposed a quantity discount schedule for mountain bikes as reflected in the following table for consideration by the president as a means to potentially reduce his total annual costs.
Discount Number 
Quantity Ordered 
Unit Cost Discount 
1 
0 to 60 
0% 
2 
61 to 80 
18% 
3 
81 and over 
20.25% 
The estimated annual demand for the bicycles, estimated average demand per day, purchase cost from the bicycle distributor per unit, lead time for a new order, ordering cost per order and average holding cost per unit per year remain the same as stated in the scenario for the current ordering model. Based upon using the quantity discount model:
Question 17: What order quantity will allow the wholesale distributor to minimize total annual inventory costs (Purchase Cost + Ordering Cost + Holding Cost) by taking advantage of the proposed discount pricing?
55 
61 
81 
101 
Scenario: The bicycle distributor has proposed a quantity discount schedule for mountain bikes as reflected in the following table for consideration by the president as a means to potentially reduce his total annual costs.
Discount Number 
Quantity Ordered 
Unit Cost Discount 
1 
0 to 60 
0% 
2 
61 to 80 
18% 
3 
81 and over 
20.25% 
Discount Number
Quantity Ordered
Unit Cost Discount
1
0 to 60
0%
2
61 to 80
18%
3
81 and over
20.25%
Discount Number
Quantity Ordered
Unit Cost Discount
Discount Number
Discount Number
Quantity Ordered
Quantity Ordered
Unit Cost Discount
Unit Cost Discount
1
0 to 60
0%
1
1
0 to 60
0 to 60
0%
0%
2
61 to 80
18%
2
2
61 to 80
61 to 80
18%
18%
3
81 and over
20.25%
3
3
81 and over
81 and over
20.25%
20.25%
The estimated annual demand for the bicycles, estimated average demand per day, purchase cost from the bicycle distributor per unit, lead time for a new order, ordering cost per order and average holding cost per unit per year remain the same as stated in the scenario for the current ordering model. Based upon using the quantity discount model:
Question 17: What order quantity will allow the wholesale distributor to minimize total annual inventory costs (Purchase Cost + Ordering Cost + Holding Cost) by taking advantage of the proposed discount pricing?
55 
61 
81 
101 
55
61
81
101
55
55
55
61
61
61
81
81
81
101
101
101
5 points
Question 18
Question 18

Question 18: Refer to the data in the Question 17. What is the total annual cost (Purchase Cost + Ordering Cost + Holding Cost) based upon taking advantage of the proposed discount pricing? (Rounded to the nearest dollar)
$753,816
$699,941
$766,452
$841,167
Question 18: Refer to the data in the Question 17. What is the total annual cost (Purchase Cost + Ordering Cost + Holding Cost) based upon taking advantage of the proposed discount pricing? (Rounded to the nearest dollar)
$753,816 
$699,941 
$766,452 
$841,167 
Question 18: Refer to the data in the Question 17. What is the total annual cost (Purchase Cost + Ordering Cost + Holding Cost) based upon taking advantage of the proposed discount pricing? (Rounded to the nearest dollar)
$753,816 
$699,941 
$766,452 
$841,167 
$753,816
$699,941
$766,452
$841,167
$753,816
$753,816
$753,816
$699,941
$699,941
$699,941
$766,452
$766,452
$766,452
$841,167
$841,167
$841,167
4 points
Question 19
Question 19

Scenario: The owner of the business stocks two types of bicycle oil: conventional and synthetic. His storeroom has room for no more than 95 cans of oil in stock. A review of his sales history suggests that at least 2.5 times as much conventional oil is sold as synthetic. Additionally experience has shown him that, due to demand, he should keep a maximum of 40 cans of conventional oil but have no less than 30 cans on hand. Experience has shown that demand for synthetic oil is somewhat unpredictable therefore he thinks he should keep a minimum of 15 cans of the synthetic in stock. He purchases the conventional oil for $4.50 per can and the synthetic oil for $5.75 and sells them for $5.50 and $7.50 respectively.
Question 19: How many cans of conventional oil should he stock in his center in order to make the maximum profit? Round down your answer to the nearest whole can.
15
20
22
30
Scenario: The owner of the business stocks two types of bicycle oil: conventional and synthetic. His storeroom has room for no more than 95 cans of oil in stock. A review of his sales history suggests that at least 2.5 times as much conventional oil is sold as synthetic. Additionally experience has shown him that, due to demand, he should keep a maximum of 40 cans of conventional oil but have no less than 30 cans on hand. Experience has shown that demand for synthetic oil is somewhat unpredictable therefore he thinks he should keep a minimum of 15 cans of the synthetic in stock. He purchases the conventional oil for $4.50 per can and the synthetic oil for $5.75 and sells them for $5.50 and $7.50 respectively.
Question 19: How many cans of conventional oil should he stock in his center in order to make the maximum profit? Round down your answer to the nearest whole can.
15 
20 
22 
30 
Scenario: The owner of the business stocks two types of bicycle oil: conventional and synthetic. His storeroom has room for no more than 95 cans of oil in stock. A review of his sales history suggests that at least 2.5 times as much conventional oil is sold as synthetic. Additionally experience has shown him that, due to demand, he should keep a maximum of 40 cans of conventional oil but have no less than 30 cans on hand. Experience has shown that demand for synthetic oil is somewhat unpredictable therefore he thinks he should keep a minimum of 15 cans of the synthetic in stock. He purchases the conventional oil for $4.50 per can and the synthetic oil for $5.75 and sells them for $5.50 and $7.50 respectively.
Question 19: How many cans of conventional oil should he stock in his center in order to make the maximum profit? Round down your answer to the nearest whole can.
15 
20 
22 
30 
15
20
22
30
15
15
15
20
20
20
22
22
22
30
30
30
4 points
Question 20
Question 20

Refer to the data in the Scenario for Question 19. How many cans of synthetic oil should he stock in his center in order to make the maximum profit? Round down your answer to the nearest whole can.
15
20
35
41
Refer to the data in the Scenario for Question 19. How many cans of synthetic oil should he stock in his center in order to make the maximum profit? Round down your answer to the nearest whole can.
15 
20 
35 
41 
Refer to the data in the Scenario for Question 19. How many cans of synthetic oil should he stock in his center in order to make the maximum profit? Round down your answer to the nearest whole can.
15 
20 
35 
41 
15
20
35
41
15
15
15
20
20
20
35
35
35
41
41
41
4 points
Question 21
Question 21

Refer to the data in the Scenario for Question 19. Using the rounded values for Questions 19 & 20 calculate the maximum profit.
$45.00
$65.00
$66.95
$68.25
Refer to the data in the Scenario for Question 19. Using the rounded values for Questions 19 & 20 calculate the maximum profit.
$45.00 
$65.00 
$66.95 
$68.25 
Refer to the data in the Scenario for Question 19. Using the rounded values for Questions 19 & 20 calculate the maximum profit.
$45.00 
$65.00 
$66.95 
$68.25 
$45.00
$65.00
$66.95
$68.25
$45.00
$45.00
$45.00
$65.00
$65.00
$65.00
$66.95
$66.95
$66.95
$68.25
$68.25
$68.25
4 points
Question 22
Question 22

Scenario: The bicycle center also sells new bikes. He purchases three types of bicycles from manufacturers in kit form, then assembles, services & inspects them prior to sale. The assembly of mountain bikes requires 3.25 hours, crosscountry bikes require 2.15 hours and threewheelers require 3.85 hours of labor. Servicing mountain bikes requires 2.75 hours, crosscountry bikes require 1.75 hours and threewheelers require 4.50 hours of labor. The inspection & testing of mountain bikes requires 3.25 hours, crosscountry bikes require 3.15 hours and threewheelers require 4.25 hours of labor. The center makes a profit of $165.00 on each mountain bike, $140.50 on crosscountry bikes and $265.75 on each threewheeler. The center has 180 assembly hours, 220 service hours and 260 inspection & testing manhours available. Because spring is just around the corner the center decides that it is best if ten mountain bikes and twelve crosscountry bikes are assembled and stocked ready for sale.
Question 22: How many mountain bikes should he assemble & stock in his center in order to make the maximum profit? Round down your answer to the nearest whole bike.
10
12
14
16
Scenario: The bicycle center also sells new bikes. He purchases three types of bicycles from manufacturers in kit form, then assembles, services & inspects them prior to sale. The assembly of mountain bikes requires 3.25 hours, crosscountry bikes require 2.15 hours and threewheelers require 3.85 hours of labor. Servicing mountain bikes requires 2.75 hours, crosscountry bikes require 1.75 hours and threewheelers require 4.50 hours of labor. The inspection & testing of mountain bikes requires 3.25 hours, crosscountry bikes require 3.15 hours and threewheelers require 4.25 hours of labor. The center makes a profit of $165.00 on each mountain bike, $140.50 on crosscountry bikes and $265.75 on each threewheeler. The center has 180 assembly hours, 220 service hours and 260 inspection & testing manhours available. Because spring is just around the corner the center decides that it is best if ten mountain bikes and twelve crosscountry bikes are assembled and stocked ready for sale.
Question 22: How many mountain bikes should he assemble & stock in his center in order to make the maximum profit? Round down your answer to the nearest whole bike.
10 
12 
14 
16 
Scenario: The bicycle center also sells new bikes. He purchases three types of bicycles from manufacturers in kit form, then assembles, services & inspects them prior to sale. The assembly of mountain bikes requires 3.25 hours, crosscountry bikes require 2.15 hours and threewheelers require 3.85 hours of labor. Servicing mountain bikes requires 2.75 hours, crosscountry bikes require 1.75 hours and threewheelers require 4.50 hours of labor. The inspection & testing of mountain bikes requires 3.25 hours, crosscountry bikes require 3.15 hours and threewheelers require 4.25 hours of labor. The center makes a profit of $165.00 on each mountain bike, $140.50 on crosscountry bikes and $265.75 on each threewheeler. The center has 180 assembly hours, 220 service hours and 260 inspection & testing manhours available. Because spring is just around the corner the center decides that it is best if ten mountain bikes and twelve crosscountry bikes are assembled and stocked ready for sale.
Question 22: How many mountain bikes should he assemble & stock in his center in order to make the maximum profit? Round down your answer to the nearest whole bike.
10 
12 
14 
16 
10
12
14
16
10
10
10
12
12
12
14
14
14
16
16
16
5 points
Question 23
Question 23

Refer to the data in the Scenario for Question 22. How many crosscountry bikes should he assemble & stock in his center in order to make the maximum profit? Round down your answer to the nearest whole bike.
11
12
14
16
Refer to the data in the Scenario for Question 22. How many crosscountry bikes should he assemble & stock in his center in order to make the maximum profit? Round down your answer to the nearest whole bike.
11 
12 
14 
16 
Refer to the data in the Scenario for Question 22. How many crosscountry bikes should he assemble & stock in his center in order to make the maximum profit? Round down your answer to the nearest whole bike.
11 
12 
14 
16 
11
12
14
16
11
11
11
12
12
12
14
14
14
16
16
16
4 points
Question 24
Question 24

Refer to the data in the Scenario for Question 22. How many threewheeler bikes should he assemble & stock in his center in order to make the maximum profit? Round down your answer to the nearest whole bike.
21
22
31
32
Refer to the data in the Scenario for Question 22. How many threewheeler bikes should he assemble & stock in his center in order to make the maximum profit? Round down your answer to the nearest whole bike.
21 
22 
31 
32 
Refer to the data in the Scenario for Question 22. How many threewheeler bikes should he assemble & stock in his center in order to make the maximum profit? Round down your answer to the nearest whole bike.
21 
22 
31 
32 
21
22
31
32
21
21
21
22
22
22
31
31
31
32
32
32
4 points
Question 25
Question 25

Refer to the data in the Scenario for Question 22. Using the rounded values for Questions 22 – 24 calculate the maximum profit?
$7,746.75
$11,574.25
$12,584.25
$8,171.75
Refer to the data in the Scenario for Question 22. Using the rounded values for Questions 22 – 24 calculate the maximum profit?
$7,746.75 
$11,574.25 
$12,584.25 
$8,171.75 
Refer to the data in the Scenario for Question 22. Using the rounded values for Questions 22 – 24 calculate the maximum profit?
$7,746.75 
$11,574.25 
$12,584.25 
$8,171.75 
$7,746.75
$11,574.25
$12,584.25
$8,171.75
$7,746.75
$7,746.75
$7,746.75
$11,574.25
$11,574.25
$11,574.25
$12,584.25
$12,584.25
$12,584.25
$8,171.75
$8,171.75
$8,171.75
4 points
Question 26
Question 26

Scenario: The owner of the bike shop realized that according to the control charts the method used by his mechanics to fill and check the air pressure in mountain bike tires needed some revision. Therefore he decided to break down the procedure into eight activities and construct a PERT Diagram. After running the data (shown in the table below) Identify the Critical Path.
Activity
ES
EF
LS
LF
A
4
0
4
6
B
5
0
6
0
C
3
4
3
10
D
8
5
8
5
E
2
5
7
16
F
20
13
20
13
G
20
13
20
13
H
16
18
18
20
A, B, F & G
A, C, D, F & G
A, B, D, F & G
A, B, D, F, G & H
Scenario: The owner of the bike shop realized that according to the control charts the method used by his mechanics to fill and check the air pressure in mountain bike tires needed some revision. Therefore he decided to break down the procedure into eight activities and construct a PERT Diagram. After running the data (shown in the table below) Identify the Critical Path.
Activity 
ES 
EF 
LS 
LF 
A 
4 
0 
4 
6 
B 
5 
0 
6 
0 
C 
3 
4 
3 
10 
D 
8 
5 
8 
5 
E 
2 
5 
7 
16 
F 
20 
13 
20 
13 
G 
20 
13 
20 
13 
H 
16 
18 
18 
20 
A, B, F & G 
A, C, D, F & G 
A, B, D, F & G 
A, B, D, F, G & H 
Scenario: The owner of the bike shop realized that according to the control charts the method used by his mechanics to fill and check the air pressure in mountain bike tires needed some revision. Therefore he decided to break down the procedure into eight activities and construct a PERT Diagram. After running the data (shown in the table below) Identify the Critical Path.
Activity 
ES 
EF 
LS 
LF 
A 
4 
0 
4 
6 
B 
5 
0 
6 
0 
C 
3 
4 
3 
10 
D 
8 
5 
8 
5 
E 
2 
5 
7 
16 
F 
20 
13 
20 
13 
G 
20 
13 
20 
13 
H 
16 
18 
18 
20 
Activity
ES
EF
LS
LF
A
4
0
4
6
B
5
0
6
0
C
3
4
3
10
D
8
5
8
5
E
2
5
7
16
F
20
13
20
13
G
20
13
20
13
H
16
18
18
20
Activity
ES
EF
LS
LF
Activity
Activity
ES
ES
EF
EF
LS
LS
LF
LF
A
4
0
4
6
A
A
4
4
0
0
4
4
6
6
B
5
0
6
0
B
B
5
5
0
0
6
6
0
0
C
3
4
3
10
C
C
3
3
4
4
3
3
10
10
D
8
5
8
5
D
D
8
8
5
5
8
8
5
5
E
2
5
7
16
E
E
2
2
5
5
7
7
16
16
F
20
13
20
13
F
F
20
20
13
13
20
20
13
13
G
20
13
20
13
G
G
20
20
13
13
20
20
13
13
H
16
18
18
20
H
H
16
16
18
18
18
18
20
20
A, B, F & G 
A, C, D, F & G 
A, B, D, F & G 
A, B, D, F, G & H 
A, B, F & G
A, C, D, F & G
A, B, D, F & G
A, B, D, F, G & H
A, B, F & G
A, B, F & G
A, B, F & G
A, C, D, F & G
A, C, D, F & G
A, C, D, F & G
A, B, D, F & G
A, B, D, F & G
A, B, D, F & G
A, B, D, F, G & H
A, B, D, F, G & H
A, B, D, F, G & H