Question
The Operations Manager for Shadyside Savings & Loan orders cash from her home office for her very popular BIG BUCKS automated teller machine, which only
The Operations Manager for Shadyside Savings & Loan orders cash from her home office for her very popular "BIG BUCKS" automated teller machine, which only dispenses $100 bills. She estimates that this machine dispenses an average of 12,500 bills per month, and that carrying a bill in inventory costs 10 percent of its value annually. She knows that each order for these bills costs $300 for clerical and armored car delivery costs, and that order lead time is six days. Assuming a 30-day month, if she were to order 6,000 bills at a time, what would be the dollar value of the average inventory level?
Select one: a. $600,000 b. $300,000 c. $3,000 d. $12,500 e. $6,000
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