Exhibit 23.2 Cartwright Computing Expects to Order 126,000 Memory Chips for Inventory

question 13

Multiple Choice

Exhibit 23.2
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 23.2.If Cartwright holds a safety stock equal to a 30-day supply of chips,what is Cartwright's minimum cost of ordering and carrying inventory?

• A)$28,500
• B)$15,950
• C)$68,440
• D)$34,220
• E)$47,693

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Definitions:

Unconscious Reference

An implicit or automatic reference to knowledge or information not consciously recognized by an individual.

Laissez-Faire

An economic philosophy advocating for minimal government intervention in the marketplace, allowing the free market to govern itself through supply and demand.

Invisible Hand

A term coined by Adam Smith to describe the self-regulating nature of the marketplace, where individuals pursuing their own interests unintentionally benefit society.

Adam Smith

An 18th-century Scottish economist and philosopher best known for his theories on free market economies and the concept of the 'invisible hand' guiding supply and demand.