GFOA Exam CPFO Topic 4 Question 86 Discussion

Actual exam question for GFOA's CPFO exam

Question #: 86
Topic #: 4

[All CPFO Questions]

The city of Mudville uses 1600 oil filters annually. The cost of placing an order is $5.00. The unit cost is $3.50. The carrying cost is 20 percent, and the carrying cost per unit is &0.70(0.20x$3.50). And, there are 255 working days per year, and each order requires three working days of lead time. What is the reorder point?

A19

B17

C15

D18

Show Suggested Answer

Suggested Answer: C

by Ben at May 02, 2024, 08:55 PM

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Willodean

2 months ago

This question is like a puzzle, and I love puzzles! Alright, let's see... the reorder point should be the demand during the lead time, which is 3 days. So we need to find the daily demand, which is 1600 / 255 = 6.27 units. Multiplying that by the 3-day lead time, we get 18.81 units, which rounds down to 18. D) 18 is the winner!

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Jesus

2 months ago

Yes, it makes sense to round down to 18 units for the reorder point.

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Oren

2 months ago

I agree, the reorder point should be 18 units.

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Arlyne

2 months ago

I think the answer is D) 18.

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Reena

3 months ago

I think the key to this question is understanding the concept of reorder point. The reorder point should be the demand during the lead time, which is 3 days. So the answer should be the daily demand multiplied by the lead time, which is 6.27 * 3 = 18.81, rounding down to 18. I'm going with D) 18.

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Nicholle

2 months ago

So the answer should be the daily demand multiplied by the lead time, which is 6.27 * 3 = 18.81, rounding down to 18. I'm going with D) 18.

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Tegan

2 months ago

The reorder point should be the demand during the lead time, which is 3 days.

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Ona

2 months ago

I think the key to this question is understanding the concept of reorder point.

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Boris

3 months ago

Haha, this question is like a word problem from a math textbook. I bet the answer is something like 17 or 18, just to make it a little tricky. I'm going with B) 17 because it's the middle option and I'm feeling lucky today.

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Lino

3 months ago

I'm not sure about this one. The question seems to have a lot of information, and I'm not sure how to put it all together. I'm going to go with D) 18 as my guess, but I'm not confident about it.

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Crista

2 months ago

B) 17

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Stephanie

2 months ago

A) 19

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Selma

3 months ago

I think the answer is C) 15. The reorder point should be the demand during the lead time, which is 3 days. Given the annual demand of 1600 and 255 working days per year, the daily demand is 1600/255 = 6.27 units. So the demand during the 3-day lead time is 6.27 * 3 = 18.81 units, rounding down to 15 units.

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