Exhibit 28.2
Cartwright Computing 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 costs is equal to 20 percent of the purchase price. (Assume a 360-day year.)
-Refer to Exhibit 28.2.If Cartwright holds a safety stock equal to a 30-day supply of chips,what is Cartwright's minimum cost of ordering and carrying inventory?
A) $28,500
B) $15,950
C) $68,440
D) $34,220
E) $47,693

Question

Quizplus · Accepted Answer

The Answer of Exhibit 28.2
Cartwright Computing 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 costs is equal to 20 percent of the purchase price. (Assume a 360-day year.)
-Refer to Exhibit 28.2.If Cartwright holds a safety stock equal to a 30-day supply of chips,what is Cartwright's minimum cost of ordering and carrying inventory?
A) $28,500
B) $15,950
C) $68,440
D) $34,220
E) $47,693

Exhibit 28.2 Cartwright Computing Expects to Order 126,000 Memory Chips for Inventory