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The Operations Manager for Shadyside Savings & Loan Orders Cash

question 108

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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, if she were to order 6,000 bills at a time, what would be the length of an order cycle?


Definitions:

Downside Risks

Potential negative outcomes or losses that may occur as a result of an investment or decision.

401(k)s

Tax-advantaged, employer-sponsored retirement saving plans that allow employees to save a portion of their paycheck before taxes are taken out.

Defined Benefit Plan

A retirement plan where employee benefits are computed using a formula that considers factors such as salary history and duration of employment, with employer contributions funding the benefits.

Defined Contribution Plans

Retirement plans in which the employee, employer, or both contribute a fixed amount to the individual's account, with eventual benefits determined by the account's performance.

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