Determine the length of an order cycle

Reference no: EM13142317

The Operations Manager for Shadyside Savings & Loan orders cash from her home office for 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 thirty-day month, if she were to order 6,000 bills at a time, what would be the length of an order cycle?

14.4 days
2.08 days
0.48 days
8.4 days
6 days

Assuming a thirty-day month, 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

Reference no: EM13142317

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