The Operations Manager for Shadyside Savings & Loan Orders Cash

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 holding a bill in inventory costs 10 percent of its value annually.She knows that each order for these bills costs $300 for clerical and armoured car delivery costs,and that order lead time is six days. Assuming a thirty-day month,and without allowing for safety stock,at what point should bills be reordered?

A) 0 bills remaining
B) 417 bills remaining
C) 2,500 bills remaining
D) 10,000 bills remaining
E) 12,500 bills remaining