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. If she were to order 6,000 bills at a time,what would be the dollar value of the average inventory level?

A) $3,000
B) $6,000
C) $12,500
D) $300,000
E) $600,000