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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Definitions:

Sunk-cost Fallacy

The misconception of valuing ongoing investments based on previously spent resources rather than future benefits, often leading to irrational decision-making.

Development

The process of growth, progress, or evolution, often involving improvement in abilities, knowledge, or understanding.

Support for Creativity

Assistance or encouragement provided to foster innovation and original thinking.

Implementation and Diffusion

The process by which new ideas, practices, or innovations are put into use and spread within an organization or society.