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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Lino

3 hours 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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Selma

1 days 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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