Aberwald Corporation Expects to Order 126,000 Memory Chips for Inventory

question 19

Multiple Choice

Aberwald Corporation expects to order 126,000 memory chips for inventory during the coming year, and it will use this inventory at a constant rate. Fixed ordering costs are $200 per order; the purchase price per chip is $25; and the firm's inventory carrying costs is equal to 20 percent of the purchase price. (Assume a 360-day year.)
-Assume that Aberwald holds a safety stock equal to a 30-day supply of chips. What is the maximum amount of inventory that Aberwald will have on hand at any time, that is, what will be the inventory level right after a delivery is made?

• A) 9,216
• B) 3,175
• C) 6,243
• D) 13,675
• E) 8,124

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Physical Deterioration

The gradual decline in the physical condition and functionality of the human body as a result of aging or disease.

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Objectives or targets that have not been reached or accomplished.

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The chronological order of sibling births in a family, which is sometimes believed to have an influence on a person's personality and psychological development.