Dollar Value of Average Inventory Level
The Operations Manager for Shadyside Savings & Loan orders cash from her home office for her very popular "BIG BUCKS" ATM, 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 6 days.
If she were to order 6,000 bills at a time, what would be the dollar value of the average inventory level?
ANY IDEAS?? (Headbang)