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 carrying a bill in inventory costs 10 percent of its value annually. She knows that each order for these bills costs $300 for clerical and armored car delivery costs, and that order lead time is six days. Assuming a 30-day month, what is the economic order quantity?

A) 600 bills
B) 3,000 bills
C) 949 bills
D) 6,215 bills
E) 12,500 bills