The Operations Manager for Shadyside Savings & Loan Orders Cash

question 50

Multiple Choice

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, what is the economic order quantity?

• A)600 bills
• B)3,000 bills
• C)949 bills
• D)6,215 bills
• E)12,500 bills

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