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Aberwald Aberwald Corporation expects to order 126,000 memory chips for inventory during the coming year,...

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Finance

Aberwald 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 costs is equal to 20% of the purchase price. (Assume a 360-day year.) Refer to Scenario: Aberwald. If the lead time for placing an order is 5 days, and Aberwald holds a safety stock equal to a 30-day supply of chips, then at what inventory level should an order be placed?

Select one:

a.12,250

b.15,570

c.13,675

d.3,175

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