ISM INTE Exam With Confidence Using Practice Dumps

The EOQ formula considers order costs and carrying costs. With the increase in carrying costs from $4 to $6 in Year 2, the EOQ will decrease, specifically to 32 units, as higher carrying costs lead to lower optimal order quantities. This balances inventory holding costs against order costs. Reference: Economic Order Quantity calculation and inventory management.

To find the density of the shipment, we use the formula:

Density = Weight / Volume.

The volume of the shipment is calculated as (42/12) x (48/12) x (48/12) cubic feet. Thus, Volume = 56 cubic feet.

Density = 500 pounds / 56 cubic feet = 8.9 pounds per cubic foot.

This calculation shows the shipment's density as Option C. Reference: Basic principles of density calculation.

In a highly competitive market like office supplies, the most critical cost associated with shortag-es is typically lost sales. If PQR, Inc. experiences shipping delays and cannot maintain continuous inventory, customers are likely to turn to competitors to meet their needs. This can result in im-mediate lost sales and potentially long-term loss of customer loyalty. The cost of lost sales often outweighs other costs like idle workers or production downtime because it directly affects revenue and market share. References:

•Chopra, S., & Meindl, P. (2015). Supply Chain Management: Strategy, Planning, and Op-eration. Pearson.

•Christopher, M. (2016). Logistics & Supply Chain Management. Pearson UK.