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

question 1

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.Assume that Cartwright holds a safety stock equal to a 30-day supply of chips.What is the maximum amount of inventory that 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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Definitions:

Lipase

Fat-digesting enzyme secreted by the pancreas.

Maltose

A sugar made from two glucose units joined together, commonly produced during the breakdown of starch in the digestive process.

Uric Acid

A waste product formed from the breakdown of purines in the body, excreted in the urine.

Thermodynamics

The branch of physics that deals with the relationships between heat and other forms of energy and how these affect matter.