This document contains 38 multiple choice questions related to operations management concepts like inventory management, linear programming, supply chain management, and statistical process control. The questions assess understanding of key assumptions and calculations of the economic order quantity model, components and constraints of linear programming models, efficiency metrics, probability and sampling distributions, and goals of supply chain management.
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This document contains 38 multiple choice questions related to operations management concepts like inventory management, linear programming, supply chain management, and statistical process control. The questions assess understanding of key assumptions and calculations of the economic order quantity model, components and constraints of linear programming models, efficiency metrics, probability and sampling distributions, and goals of supply chain management.
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1. Which of the following is not one of the assumptions of the basic EOQ model?
A. Annual demand requirements are known and constant.
B. Lead time does not vary. C. Each order is received in a single delivery. D. Quantity discounts are available. E. All of the above are necessary assumptions. 2. Dairy items, fresh fruit and newspapers are items that: A. do not require safety stocks B. cannot be ordered in large quantities C. are subject to deterioration and spoilage D. require that prices be lowered every two days E. have minimal holding costs 3. Which of the following is least likely to be included in order costs? A. processing vendor invoices for payment B. moving delivered goods to temporary storage C. inspecting incoming goods for quantity D. taking an inventory to determine how much is needed E. temporary storage of delivered goods 4. The EOQ model is most relevant for which one of the following? A. ordering items with dependent demand B. determination of safety stock C. ordering perishable items D. determining fixed interval order quantities E. determining fixed order quantities 5. Which is not a true assumption in the EOQ model? A. Production rate is constant B. Lead time doesn't vary C. No more than 3 items are involved D. Usage rate is constant E. No quantity discounts 6. In a supermarket, a vendor's restocking the shelves every Monday morning is an example of: A. safety stock replenishment B. economic order quantities C. reorder points D. fixed order interval E. blanket ordering 7. In the basic EOQ model, if annual demand doubles, the effect on the EOQ is: A. It doubles. B. It is four times its previous amount. C. It is half its previous amount. D. It is about 70 percent of its previous amount. E. It increases by about 40 percent. 8. In the basic EOQ model, an annual demand of 40 units, an ordering cost of $5, and a holding cost of $1 per unit per year will result in an EOQ of: A. 20 B. square root of 200 C. 200 D. 400 E. none of these 9. In the basic EOQ model, if D = 60 per month, S = $12, and H = $10 per unit per month, EOQ is: A. 10 B. 12 C. 24 D. 72 E. 144 10. In the basic EOQ model, if annual demand is 50, carrying cost is $2, and ordering cost is $15, EOQ is approximately: A. 11 B. 20 C. 24 D. 28 E. 375 A car rental agency uses 96 boxes of staples a year. The boxes cost $4 each. It costs $10 to order staples, and carrying costs are $0.80 per box on an annual basis. [Answer the following questions] 11. Determine the order quantity that will minimize the sum of ordering and holding boxes of staples A. 50 B. 49 C. 51 D. 48 12. Determine the annual cost of ordering and carrying the boxes of staples --- A. 40.30 B. 39.20 C. 41.37 D. 38.25 A service garage uses 120 boxes of cleaning cloths a year. The boxes cost $6 each. Ordering cost is $3 and holding cost is 10 percent of purchase cost per unit on an annual basis. [Answer the following questions] 13. Determine the economic order quantity [Round up your answer] A. 50 B. 35 C. 48 D. 51
14. Determine the total cost of carrying the cloths (excluding purchase price)
A. 10.60 B. 10.29 C. 20.67 D. 20.70
15. Determine the average inventory --- A. 18.0 B. 17.5 C. 18.5 D. 17.0 Ann Chovies, owner of the Perfect Pasta Pizza Parlor, uses 20 pounds of pepperoni each day in preparing pizzas. Order costs for pepperoni are $10.00 per order, and carrying costs are 4 cents per pound per day. Lead time for each order is 3 days, and the pepperoni itself costs $3.00 per pound. [Answer the following questions] 16. What is the economic order quantity for pepperoni? A. 20 pounds B. 40 pounds C. 60 pounds D. 80 pounds E. 100 pounds Given the following data for a particular inventory item:
17. What is the economic order quantity for this item? A. 2,000 units B. 1940 Units C. 1950 Units D. 2050 Units
18. The linear optimization technique for allocating constrained resources among different products is: A. linear regression analysis B. linear disaggregation C. linear decomposition D. linear programming E. linear tracking analysis 19. Which of the following is not a component of the structure of a linear programming model? A. Constraints B. Decision variables C. Parameters D. A goal or objective E. Environmental uncertainty 20. Which of the following could not be a linear programming problem constraint? A. 1A + 2B 3 B. 1A + 2B 3 C. 1A + 2B = 3 D. 1A + 2B + 3C + 4D 5 E. 1 A + 2B 21. For the products A, B, C and D, which of the following could be a linear programming objective function? A. Z = 1A + 2B + 3C + 4D B. Z = 1A + 2BC + 3D C. Z = 1A + 2AB + 3ABC + 4ABCD D. Z = 1A + 2B/C + 3D E. all of the above 22. The region which satisfies all of the constraints in graphical linear programming is called the: A. optimum solution space B. region of optimality C. lower left hand quadrant D. region of non-negativity E. feasible solution space 23. In graphical linear programming the objective function is: A. linear B. a family of parallel lines C. a family of iso-profit lines D. all of the above E. none of the above 24. For the constraints given below, which point is in the feasible solution space of this maximization problem?
A. x = 1, y = 5 B. x = -1, y = 1 C. x = 4, y = 4 D. x = 2, y = 1 E. x = 2, y = 8 25. Which of the choices below constitutes a simultaneous solution to these equations?
A. x = 2, y = .5 B. x = 4, y = -.5 C. x = 2, y = 1 D. x = y E. y = 2x 26. Which of the choices below constitutes a simultaneous solution to these equations? A. x = 1, y = 1.5 B. x = .5, y = 2 C. x = 0, y = 3 D. x = 2, y = 0 E. x = 0, y = 0 27. What combination of x and y will yield the optimum for this problem?
A. x = 2, y = 0 B. x = 0, y = 0 C. x = 0, y = 3 D. x = 1, y = 5 E. none of the above 28 What combination of x and y will provide a minimum for this problem?
A. x = 0, y = 0 B. x = 0, y = 3 C. x = 0, y = 5 D. x = 1, y = 2.5 E. x = 6, y = 0 The production planner for Fine Coffees, Inc. produces two coffee blends: American (A) and British (B). Two of his resources are constrained: Columbia beans, of which he can get at most 300 pounds (4,800 ounces) per week; and Dominican beans, of which he can get at most 200 pounds (3,200 ounces) per week. Each pound of American blend coffee requires 12 ounces of Colombian beans and 4 ounces of Dominican beans, while a pound of British blend coffee uses 8 ounces of each type of bean. Profits for the American blend are $2.00 per pound, and profits for the British blend are $1.00 per pound. [Answer the following question] 29 What is the objective function? A. $1 A + $2 B = Z B. $12 A + $8 B = Z C. $2 A + $1 B = Z D. $8 A + $12 B = Z E. $4 A + $8 B = Z A local bagel shop produces two products: bagels (B) and croissants (C). Each bagel requires 6 ounces of flour, 1 gram of yeast, and 2 tablespoons of sugar. A croissant requires 3 ounces of flour, 1 gram of yeast, and 4 tablespoons of sugar. The company has 6,600 ounces of flour, 1,400 grams of yeast, and 4,800 tablespoons of sugar available for today's production run. Bagel profits are 20 cents each, and croissant profits are 30 cents each. [Answer the following question] 30 What is the objective function? A. $0.30 B + $0.20 C = Z B. $0.60 B + $0.30 C = Z C. $0.20 B + $0.30 C = Z D. $0.20 B + $0.40 C = Z E. $0.10 B + $0.10 C = Z 31 Given the following information, what would efficiency be? Effective capacity = 80 units per day Design capacity = 100 units per day Utilization = 48% A. 20% B. 35% C. 48% D. 60% E. 80% 32 Given the following information, what would efficiency be? Effective capacity = 50 units per day Design capacity = 100 units per day Actual output = 30 units per day A. 40% B. 50% C. 60% D. 80% E. 90%
33 A manager has been given the table shown below and is asked to generate random numbers. Which of the following statements is TRUE?
a. There are no customers in the store 49 percent of the time. b. The probability of having one customer in the store is 0.30. c. The relative frequency of having two customers in the store is 0.80. d. If we randomly choose the numbers 0 through 99 enough times, about 99 percent of the time we will have two customers in the store. e. All the above statements may not be as appropriate to the issue.
The following table shows the probability of demand for automobiles used in an Excel simulation.
34 What is the average number of cars sold each week [ROUND UP THE NUMBER]? a. 25 b. 30 c. 32 d. 33 e. 29
35 What is the demand on 5th week? a. 35 b. 33 c. 30 d. 35 e. 33
36 What is the average weekly demand based on the above chart week [ROUND UP THE NUMBER]? a. 29 b. 33 c. 26 d. 30 e. 33 37 Which of the following is not a goal of supply chain management? A. fewer suppliers and long-term relationship B. small lot sizes C. on time deliveries D. lowest possible transportation costs E. delivery often to the place of use A design engineer wants to construct a sample mean chart for controlling the service life of a halogen headlamp his company produces. He knows from numerous previous samples that this service life is normally distributed with a mean of 500 hours and a standard deviation of 20 hours. On three recent production batches, he tested service life on random samples of four headlamps, with these results: [Answer the following questions]
38 What is the sample mean service life for sample 2? A. 460 hours B. 495 hours C. 500 hours D. 515 hours E. 525 hours 39 What is the mean of the sampling distribution of sample means when service life is in control? A. 250 hours B. 470 hours C. 495 hours D. 500 hours E. 515 hours 40 What is the standard deviation of the sampling distribution of sample means for whenever service life is in control? A. 5 hours B. 6.67 hours C. 10 hours D. 11.55 hours E. 20 hours 41 If he uses upper and lower control limits of 520 and 480 hours, what is his risk (alpha) of concluding service life is out of control when it is actually under control (Type I error)? A. 0.0026 B. 0.0456 C. 0.3174 D. 0.6826 E. 0.9544 42 If he uses upper and lower control limits of 520 and 480 hours, on what sample(s) (if any) does service life appear to be out of control? A. sample 1 B. sample 2 C. sample 3 D. both samples 2 and 3 E. all samples are in control A Quality Analyst wants to construct a sample mean chart for controlling a packaging process. He knows from past experience that whenever this process is under control, package weight is normally distributed with a mean of twenty ounces and a standard deviation of two ounces. Each day last week, he randomly selected four packages and weighed each:
43 What is the sample mean package weight for Thursday? A. 19 ounces B. 20 ounces C. 20.6 ounces D. 21 ounces E. 23 ounces 44 What is the mean of the sampling distribution of sample means when this process is under control? A. 18 ounces B. 19 ounces C. 20 ounces D. 21 ounces E. 22 ounces 45 What is the standard deviation of the sampling distribution of sample means for whenever this process is under control? A. 0.1 ounces B. 0.4 ounces C. 0.5 ounces D. 1 ounce E. 2 ounces 46 If he uses upper and lower control limits of 22 and 18 ounces, what is his risk (alpha) of concluding this process is out of control when it is actually in control (Type I error)? A. 0.0026 B. 0.0456 C. 0.3174 D. 0.6826 E. 0.9544 Given the following process control data for a normally distributed quality variable (three samples of size four each):
47 What is the sample mean for sample #1? #2? #3? a. 14.0; 17.5; 16.5 b. 14.5; 17.5; 16.5 c. 14.0; 17.0; 16.5 d. 14.5; 17.5; 16.0 48 The EOQ model is most relevant for which one of the following? A. ordering items with dependent demand B. determination of safety stock C. ordering perishable items D. determining fixed interval order quantities E. determining fixed order quantities 49 In the basic EOQ model, an annual demand of 40 units, an ordering cost of $5, and a holding cost of $1 per unit per year will result in an EOQ of: A. 20 B. square root of 200 C. 200 D. 400 E. none of these 50 In the basic EOQ model, if D = 60 per month, S = $12, and H = $10 per unit per month, EOQ is: A. 10 B. 12 C. 24 D. 72 E. 144 51 In the basic EOQ model, if annual demand is 50, carrying cost is $2, and ordering cost is $15, EOQ is approximately: A. 11 B. 20 C. 24 D. 28 E. 375 52 If average demand for an inventory item is 200 units per day, lead time is three days, and safety stock is 100 units, the reorder point is: A. 100 units B. 200 units C. 300 units D. 600 units E. 700 units 53 A shop that makes candles offers a scented candle, which has a monthly demand of 360 boxes. Candles can be produced at a rate of 36 boxes per day. The shop operates 20 days a month. Assume that demand is uniform throughout the month. Setup cost is $60 for a run, and holding cost is $2 per box on a monthly basis. Determine the following: The economic run size a. 200 b. 205 c. 208 d. 209 54 The maximum inventory will be A. 100 B. 105 C. 106 D. 104 55 The number of days in a run A. 5.0 B. 5.3 C. 5.8 D. None 56 A dry cleaning firm uses an average of 20 gallons of cleaning fluid a day. Usage tends to be normally distributed with a standard deviation of two gallons per day. Lead time is four days, and the desired service level is 92 percent. What amount of safety stock is appropriate if a fixed order size of 600 gallons is used? A. 5.00 gallons B. 5.64 gallons C. 6.00 gallons D. 6.25 gallons A company can produce a part it uses in an assembly operation at the rate of 50 an hour. The company operates eight hours a day, 300 days a year. Daily usage of the part is 300 parts. The company uses the part every day. The run size is 6,000 parts. The annual holding cost is $2 per unit, and setup cost is $100. [Answer the following questions] 57 What will be the annual demands? A. 89,000 B. 89,500 C. 90,000 D. 90,500 58 How many runs per year will there be? a. 16 b. 15 c. 14 d. 17 59 The linear optimization technique for allocating constrained resources among different products is: A. linear regression analysis B. linear disaggregation C. linear decomposition D. linear programming E. linear tracking analysis 60 28. Which of the following is not a component of the structure of a linear programming model? A. Constraints B. Decision variables C. Parameters D. A goal or objective E. Environmental uncertainty
61 Coordinates of all corner points are substituted into the objective function when we use the approach called: A. Least Squares B. Regression C. Enumeration D. Graphical Linear Programming E. Constraint Assignment 62 Which of the following could not be a linear programming problem constraint? A. 1A + 2B 3 B. 1A + 2B 3 C. 1A + 2B = 3 D. 1A + 2B + 3C + 4D 5 E. 1 A + 2B 63 For the products A, B, C and D, which of the following could be a linear programming objective function? A. Z = 1A + 2B + 3C + 4D B. Z = 1A + 2BC + 3D C. Z = 1A + 2AB + 3ABC + 4ABCD D. Z = 1A + 2B/C + 3D E. all of the above 64 The logical approach, from beginning to end, for assembling a linear programming model begins with: A. identifying the decision variables B. identifying the objective function C. specifying the objective function parameters D. identifying the constraints E. specifying the constraint parameters 65 Which objective function has the same slope as this one: $4x + $2y = $20? A. $4x + $2y = $10 B. $2x + $4y = $20 C. $2x - $4y = $20 D. $4x - $2y = $20 E. $8x + $8y = $20 66 For the constraints given below, which point is in the feasible solution space of this maximization problem?
A. x = 1, y = 5 B. x = -1, y = 1 C. x = 4, y = 4 D. x = 2, y = 1 E. x = 2, y = 8 67 Which of the choices below constitutes a simultaneous solution to these equations?
A. x = 2, y = .5 B. x = 4, y = -.5 C. x = 2, y = 1 D. x = y E. y = 2x
68 Which of the choices below constitutes a simultaneous solution to these equations? A. x = 1, y = 1.5 B. x = .5, y = 2 C. x = 0, y = 3 D. x = 2, y = 0 E. x = 0, y = 0
69 What combination of x and y will yield the optimum for this problem?
A. x = 2, y = 0 B. x = 0, y = 0 C. x = 0, y = 3 D. x = 1, y = 5 E. none of the above
70 In graphical linear programming, when the objective function is parallel to one of the binding constraints, then: A. the solution is sub-optimal B. multiple optimal solutions exist C. a single corner point solution exists D. no feasible solution exists E. the constraint must be changed or eliminated
71 For the constraints given below, which point is in the feasible solution space of this minimization problem?
A. x = 0.5, y = 5.0 B. x = 0.0, y = 4.0 C. x = 2.0, y = 5.0 D. x = 1.0, y = 2.0 E. x = 2.0, y = 1.0 72 What combination of x and y will provide a minimum for this problem?
A. x = 0, y = 0 B. x = 0, y = 3 C. x = 0, y = 5 D. x = 1, y = 2.5 E. x = 6, y = 0
73 The theoretical limit on the number of decision variables that can be handled by the simplex method in a single problem is: A. 1 B. 2 C. 3 D. 4 E. unlimited 74 The theoretical limit on the number of constraints that can be handled by the simplex method in a single problem is: A. 1 B. 2 C. 3 D. 4 E. unlimited
75 A shadow price reflects which of the following in a maximization problem? A. marginal cost of adding additional resources B. marginal gain in the objective that would be realized by adding one unit of a resource C. net gain in the objective that would be realized by adding one unit of a resource D. marginal gain in the objective that would be realized by subtracting one unit of a resource E. expected value of perfect information 76 In linear programming, a non-zero reduced cost is associated with a: A. decision variable in the solution B. decision variable not in the solution C. constraint for which there is slack D. constraint for which there is surplus E. constraint for which there is no slack or surplus 77 A constraint that does not form a unique boundary of the feasible solution space is a: A. redundant constraint B. binding constraint C. non-binding constraint D. feasible solution constraint E. constraint that equals zero 78 In linear programming, sensitivity analysis is associated with: (I) objective function coefficient (II) right-hand side values of constraints (III) constraint coefficient A. I and II B. II and III C. I, II and III D. I and III E. none of the above The production planner for Fine Coffees, Inc. produces two coffee blends: American (A) and British (B). Two of his resources are constrained: Columbia beans, of which he can get at most 300 pounds (4,800 ounces) per week; and Dominican beans, of which he can get at most 200 pounds (3,200 ounces) per week. Each pound of American blend coffee requires 12 ounces of Colombian beans and 4 ounces of Dominican beans, while a pound of British blend coffee uses 8 ounces of each type of bean. Profits for the American blend are $2.00 per pound, and profits for the British blend are $1.00 per pound. 79 What is the objective function? A. $1 A + $2 B = Z B. $12 A + $8 B = Z C. $2 A + $1 B = Z D. $8 A + $12 B = Z E. $4 A + $8 B = Z 80 What is the Columbia bean constraint? A. 1 A + 2 B 4,800 B. 12 A + 8 B 4,800 C. 2 A + 1 B 4,800 D. 8 A + 12 B 4,800 E. 4 A + 8 B 4,800 81 57. What is the Dominican bean constraint? A. 12A + 8B 4,800 B. 8A + 12B 4,800 C. 4A + 8B 3,200 D. 8A + 4B 3,200 E. 4A + 8B 4,800
The operations manager for the Blue Moon Brewing Co. produces two beers: Lite (L) and Dark (D). Two of his resources are constrained: production time, which is limited to 8 hours (480 minutes) per day; and malt extract (one of his ingredients), of which he can get only 675 gallons each day. To produce a keg of Lite beer requires 2 minutes of time and 5 gallons of malt extract, while each keg of Dark beer needs 4 minutes of time and 3 gallons of malt extract. Profits for Lite beer are $3.00 per keg, and profits for Dark beer are $2.00 per keg. 82 What is the objective function? A. $2 L + $3 D = Z B. $2 L + $4 D = Z C. $3 L + $2 D = Z D. $4 L + $2 D = Z E. $5 L + $3 D = Z 83 What is the time constraint? A. 2 L + 3 D 480 B. 2 L + 4 D 480 C. 3 L + 2 D 480 D. 4 L + 2 D 480 E. 5 L + 3 D 480 The production planner for a private label soft drink maker is planning the production of two soft drinks: root beer (R) and sassafras soda (S). Two resources are constrained: production time (T), of which she has at most 12 hours per day; and carbonated water (W), of which she can get at most 1500 gallons per day. A case of root beer requires 2 minutes of time and 5 gallons of water to produce, while a case of sassafras soda requires 3 minutes of time and 5 gallons of water. Profits for the root beer are $6.00 per case, and profits for the sassafras soda are $4.00 per case. 84 What is the objective function? A. $4 R + $6 S = Z B. $2 R + $3 S = Z C. $6 R + $4 S = Z D. $3 R + $2 S = Z E. $5 R + $5 S = Z 85 What is the production time constraint (in minutes)? A. 2 R + 3 S 720 B. 2 R + 5 S 720 C. 3 R + 2 S 720 D. 3 R + 5 S 720 E. 5 R + 5 S 720 An electronics firm produces two models of pocket calculators: the A-100 (A), which is an inexpensive four-function calculator, and the B-200 (B), which also features square root and percent functions. Each model uses one (the same) circuit board, of which there are only 2,500 available for this week's production. Also, the company has allocated a maximum of 800 hours of assembly time this week for producing these calculators, of which the A-100 requires 15 minutes (.25 hours) each, and the B-200 requires 30 minutes (.5 hours) each to produce. The firm forecasts that it could sell a maximum of 4,000 A-100's this week and a maximum of 1,000 B-200's. Profits for the A-100 are $1.00 each, and profits for the B-200 are $4.00 each. 86 What is the objective function? A. $4.00 A + $1.00 B = Z B. $0.25 A + $1.00 B = Z C. $1.00 A + $4.00 B = Z D. $1.00 A + $1.00 B = Z E. $0.25 A + $0.50 B = Z 87 What is the assembly time constraint (in hours)? A. 1 A + 1 B 800 B. 0.25 A + 0.5 B 800 C. 0.5 A + 0.25 B 800 D. 1 A + 0.5 B 800 E. 0.25 A + 1 B 800
A local bagel shop produces two products: bagels (B) and croissants (C). Each bagel requires 6 ounces of flour, 1 gram of yeast, and 2 tablespoons of sugar. A croissant requires 3 ounces of flour, 1 gram of yeast, and 4 tablespoons of sugar. The company has 6,600 ounces of flour, 1,400 grams of yeast, and 4,800 tablespoons of sugar available for today's production run. Bagel profits are 20 cents each, and croissant profits are 30 cents each. 88 What is the objective function? A. $0.30 B + $0.20 C = Z B. $0.60 B + $0.30 C = Z C. $0.20 B + $0.30 C = Z D. $0.20 B + $0.40 C = Z E. $0.10 B + $0.10 C = Z 89 What is the sugar constraint (in tablespoons)? A. 6 B + 3 C 4,800 B. 1 B + 1 C 4,800 C. 2 B + 4 C 4,800 D. 4 B + 2 C 4,800 E. 2 B + 3 C 4,800
The owner of Crackers, Inc. produces two kinds of crackers: Deluxe (D) and Classic (C). She has a limited amount of the three ingredients used to produce these crackers available for her next production run: 4,800 ounces of sugar; 9,600 ounces of flour, and 2,000 ounces of salt. A box of Deluxe crackers requires 2 ounces of sugar, 6 ounces of flour, and 1 ounce of salt to produce; while a box of Classic crackers requires 3 ounces of sugar, 8 ounces of flour, and 2 ounces of salt. Profits for a box of Deluxe crackers are $0.40; and for a box of Classic crackers, $0.50. 90 What is the objective function? A. $0.50 D + $0.40 C = Z B. $0.20 D + $0.30 C = Z C. $0.40 D + $0.50 C = Z D. $0.10 D + $0.20 C = Z E. $0.60 D + $0.80 C = Z. 91 What is the constraint for sugar? A. 2 D + 3 C 4,800 B. 6 D + 8 C 4,800 C. 1 D + 2 C 4,800 D. 3 D + 2 C 4,800 E. 4 D + 5 C 4,800
The logistics/operations manager of a mail order house purchases two products for resale: King Beds (K) and Queen Beds (Q). Each King Bed costs $500 and requires 100 cubic feet of storage space, and each Queen Bed costs $300 and requires 90 cubic feet of storage space. The manager has $75,000 to invest in beds this week, and her warehouse has 18,000 cubic feet available for storage. Profit for each King Bed is $300, and for each Queen Bed is $150.
92 What is the objective function? A. Z = $150K + $300Q B. Z = $500K + $300Q C. Z = $300K + $150Q D. Z = $300K + $500Q E. Z = $100K + $90Q 93 What is the storage space constraint? A. 200K + 100Q 18,000 B. 200K + 90Q 18,000 C. 300K + 90Q 18,000 D. 500K + 100Q 18,000 E. 100K + 90Q 18,000