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

---

Definitions:

Compensating Differential

Additional income or benefits offered to employees to offset unpleasant aspects of a job.

Compensating Differential

Additional wage or payment provided to workers to compensate for undesirable aspects of a job, such as risk or unpleasant conditions.

Compensating Wage Differential

A financial adjustment to salaries that aims to balance out less desirable aspects of a job, such as hazardous conditions or irregular hours.

Supply Of Labor

The supply of labor refers to the total hours that workers wish to work at a given real wage rate.