1. Arizona Health Services (AHS), a large hospital system, dispenses 250,000 bottles of brand name pharmaceuticals annually in one of its hospitals (assume a constant daily demand). The optimal safety stock, which is on hand initially, is 1,000 bottles. Each bottle costs $10, the holding cost is $0.10/unit, and the cost of placing an order with the supplier is $175. Assume an interest rate of 5% and a lag time of 5 days. What is the total cost of the pharmaceuticals?
A. $2,503,166 B. $2,506,187 C. $2,508,308 D. $5,016,616
2. As an organization becomes more organic, its chain of command becomes
A. shorter
B. narrower
c. longer
d. broader