Video Images Is a Distributor of DVDs

question 103

Multiple Choice

Video Images is a distributor of DVDs. Quick-Disk Mart is a local retail outlet which sells blank and recorded DVDs. Quick-Disk Mart purchases tapes from Video Images at $3.00 per DVD. DVDs are shipped in packages of 20. Video Images pays all incoming freight, and Quick-Disk Mart does not inspect the DVDs due to Video Images reputation for high quality. Annual demand is 104,000 DVDs at a rate of 4,000 DVDs per week. Quick-Disk Mart earns 20% on its cash investments. The purchase-order lead time is two weeks. The following cost data are available: What is the required annual return on investment per package?

• A)$60.00
• B)$2.50
• C)$12.00
• D)$0.60

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Definitions:

Wrongful Discharge

The unlawful termination of an employee's contract of employment against the law or the terms specified in the contract.

Management by Objectives

A management strategy in which employees and managers collaborate to set, monitor, and achieve specific objectives.

Specific Objectives

Clearly defined targets that an organization or individual aims to achieve, often within a set timeframe.

Higher-Level

Tasks or responsibilities that involve more complexity and greater importance.