Aberwald Corporation Aberwald Corporation Expects to Order 126,000 Memory Chips for Inventory

Multiple Choice

Aberwald Corporation
Aberwald Corporation 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 cost is equal to 20 percent of the purchase price. (Assume a 360-day year.)
-Refer to Aberwald Corporation.Assume that Aberwald holds a safety stock equal to a 30-day supply of chips. What is the maximum amount of inventory that Aberwald will have on hand at any time; that is, what will be the inventory level right after a delivery is made?

A) 9,216
B) 3,175
C) 6,243
D) 13,675
E) 8,124