Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

2 . Globe Inc. is a distributor of DVDs . DVD Mart is a local retail outlet which sells blank and recorded DVDs . DVD

2. Globe Inc. is a distributor of DVDs. DVD Mart is a local retail outlet which sells blank and recorded DVDs. DVD Mart purchases DVDs from Globe at $28.00 per DVD; DVDs are shipped in packages of
68. Globe pays all incoming freight, and DVD Mart does not inspect the DVDs due to Globe's reputation for high quality. Annual demand is 320,000 DVDs at a rate of 6,900 DVDs per week. DVD Mart earns 13% on its cash investments. The purchase-order lead time is one week. The following cost data are available:
Relevant ordering costs per purchase order
Carrying costs per package per year:
Relevant insurance, materials handling, breakage, etc., per year
What is the economic order quantity?
A)67.41 packages
B)47.14 packages
C)6.10 packages
D)66.67 packages

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these General Management questions