Exhibit 12.3 The Following Questions Use the Information Below

question 54

Multiple Choice

Exhibit 12.3
The following questions use the information below.
An auto parts store wants to simulate its inventory system for engine oil. The company has collected data on the shipping time for oil and the daily demand for cases of oil. A case of oil generates a $10 profit. Customers can buy oil at any auto parts store so there are no backorders (the company loses the sale and profit) . The company orders 30 cases whenever the inventory position falls below the reorder point of 15 cases. Orders are placed at the beginning of the day and delivered at the beginning of the day so the oil is available on the arrival day. An average service level of 99% is desired. The following spreadsheets have been developed for this problem. The company has simulated 2 weeks of operation for their inventory system. The current level of on-hand inventory is 25 units and no orders are pending.
-Using the information in Exhibit 12.3, what formula should go in cell H8 to determine if an order should be placed?

• A) =IF(G8<$D$3,1,0)
• B) =IF(G8>$D$3,1,0)
• C) =IF(G8<$D$3,0,1)
• D) =IF(G8<$D$4,1,0)

Describe how changes in the money supply affect equilibrium in the money market.

Interpret the Federal Reserve's role in setting monetary policy targets.

Analyze the effect of monetary policy on aggregate demand and the slope of the aggregate-demand curve.

Gain insights into the impact of changes in price levels on money demand and supply.

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Definitions:

Current Selling Price

The price at which a product or service is currently being sold in the market.