Exhibit Cartwright Computing Cartwright Computing Expects to Order 126,000 Memory Chips for Inventory

question 20

Multiple Choice

Exhibit Cartwright Computing
Cartwright Computing 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.)
-Refer to Exhibit Cartwright Computing.If Cartwright holds a safety stock equal to a 30-day supply of chips, what is Cartwright's minimum cost of ordering and carrying inventory?

• A) $28,500
• B) $15,950
• C) $68,440
• D) $34,220
• E) $47,693

---

Definitions:

Frictional

Pertaining to the period of time and inefficiency in processes where resources, especially labor, move from one employment to another, contributing to transient joblessness.

Unemployment Rate

The portion of the labor market that is out of work and actively pursuing job opportunities.

Decades

Periods of ten years, used as a measure of time to describe longer trends in history, economics, or demography.

Cyclical Unemployment

This refers to unemployment that occurs due to fluctuations in the economy, often increasing during a recession and decreasing during an economic expansion.