Short Grass Incorporated is a distributor of golf balls. Martin's Golf Supplies is a local retail outlet which sells golf balls. Martin's purchases the golf balls from Short Grass Incorporated at $1.15 per ball; the golf balls are shipped in cartons of 72. Short Grass Incorporated pays all incoming freight, and Martin's Golf Supplies does not inspect the balls due to Short Grass' reputation for high quality. Annual demand is 159,520 golf balls at a rate of 3,691 balls per week. Martin's Golf Supplies earns 10% on its cash investments. The purchaseminus−order lead time is one week. The following cost data are available: Relevant ordering costs per purchase order $132.00 Carrying costs per carton per year: Relevant insurance, materials handling, $0.87 breakage, etc., per year What is the economic order quantity? (Round costs to the nearest cent and quantities to the nearest whole number.)
Short Grass Incorporated is a distributor of golf balls. Martin's Golf Supplies is a local retail outlet which sells golf balls. Martin's purchases the golf balls from Short Grass Incorporated at $1.15 per ball; the golf balls are shipped in cartons of 72. Short Grass Incorporated pays all incoming freight, and Martin's Golf Supplies does not inspect the balls due to Short Grass' reputation for high quality. Annual demand is 159,520 golf balls at a rate of 3,691 balls per week. Martin's Golf Supplies earns 10% on its cash investments. The purchaseminus−order lead time is one week. The following cost data are available: Relevant ordering costs per purchase order $132.00 Carrying costs per carton per year: Relevant insurance, materials handling, $0.87 breakage, etc., per year What is the economic order quantity? (Round costs to the nearest cent and quantities to the nearest whole number.)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter3: Demand Analysis
Section: Chapter Questions
Problem 10E
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Question
Short Grass Incorporated is a distributor of golf balls. Martin's Golf Supplies is a local retail outlet which sells golf balls. Martin's purchases the golf balls from Short Grass Incorporated at $1.15 per ball; the golf balls are shipped in cartons of 72. Short Grass Incorporated pays all incoming freight, and Martin's Golf Supplies does not inspect the balls due to Short Grass' reputation for high quality. Annual demand is 159,520 golf balls at a rate of 3,691 balls per week. Martin's Golf Supplies earns 10% on its cash investments. The
purchaseminus−order
lead time is one week. The following cost data are available:|
Relevant ordering costs per purchase order
|
$132.00
|
|
Carrying costs per carton per year:
|
|
|
Relevant insurance, materials handling,
|
$0.87
|
|
breakage, etc., per year
|
|
What is the economic order quantity? (Round costs to the nearest cent and quantities to the nearest whole number.)
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