Here's my approach to this inventory and cost tracking problem.
I can see this is testing your ability to systematically track inventory levels over time while calculating cumulative storage costs. Let me walk you through the logical framework that makes this manageable.
The key insight: You need to think of this as two distinct phases - a production phase with no costs, followed by a shipping phase where inventory decreases monthly while incurring storage costs on remaining stock.
Step 1: Track the Production Phase (Nov-Feb)During these 4 months, the business produces \(x\) rakes each month with no storage costs.
Total inventory entering March = \(4x\) rakes
Step 2: Set Up the Shipping Phase Pattern (Mar-Oct)Here's what happens each month during the 8-month shipping period:
- Start with inventory from previous month
- Ship \(\frac{x}{2}\) rakes at the beginning of the month
- Pay $0.10 storage cost for each remaining rake for that entire month
Step 3: Calculate Month-by-Month Storage CostsLet me show you the pattern by tracking the first few months:
March: Start with \(4x\), ship \(\frac{x}{2}\), store \(4x - \frac{x}{2} = \frac{7x}{2}\) rakes
Storage cost = \(\frac{7x}{2} \times 0.10 = 0.35x\)
April: Start with \(\frac{7x}{2}\), ship \(\frac{x}{2}\), store \(3x\) rakes
Storage cost = \(3x \times 0.10 = 0.30x\)
May: Store \(\frac{5x}{2}\) rakes, cost = \(0.25x\)
Following this pattern through October and adding all monthly costs:
\(0.35x + 0.30x + 0.25x + 0.20x + 0.15x + 0.10x + 0.05x + 0 = 1.40x\)
Answer: C. 1.40xNotice how the inventory decreases by \(\frac{x}{2}\) each month, creating an arithmetic sequence for the storage costs. This systematic tracking approach is crucial for these multi-period business problems.
The complete solution on
Neuron shows you the systematic framework for tackling all inventory tracking problems, plus an alternative smart numbers approach that makes the arithmetic even cleaner. You can also practice similar multi-step business problems with detailed solutions
here on Neuron to build consistency with these question types.