Assumptions of the EOQ model include:
Kushie's Coffee in Bangalore is a quaint establishment nestled near MG Road in the central business district. It serves coffee and fruit cake to a clientele that has been enjoying these products for over fifty years. The demand for coffee beans is 6600 cases per year (each case has 24 ten-pound bags). It would be disastrous for them to run out of coffee, so they keep a safety stock of 30 cases. The cases cost $4800 and it costs $5 per case to order coffee. As coffee is a perishable product, the holding cost is fairly high at $40/case/year. The lead time to receive an order is seven days. Kushie's is open 300 days a year.
A) Demand is normally distributed.
B) Lead time is normally distributed.
C) There is instantaneous order receipt.
D) Backorders can occur.
Answer: C
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A) Creates legions of project management experts. B) Maintains a pooled supply of intellectual capital. C) Assuages the fear of unemployment by project team members once the project has ended. D) Fosters loyalty to the overall organization by project team members.
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Fill in the blank with the appropriate word.