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

question 3

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 its average inventory level?

• A) 12,088
• B) 3,175
• C) 15,750
• D) 13,675
• E) 8,124

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Definitions:

Self-Serving Bias

The tendency to take credit for one’s successes and to deny responsibility for one’s failures.

False Consensus Effect

Observers’ overestimation of the degree to which everybody else thinks or acts the way they do.

Social Comparison

The process by which individuals evaluate their thoughts, feelings, behaviors, and abilities in relation to others.

False Consensus Effect

A cognitive bias whereby individuals overestimate the extent to which their beliefs, feelings, and behaviors are shared by others.