Question
Garry's Golf Supplies is a local retail outlet which sells golf balls. Garry's purchases the golf balls from Green Grass Incorporated at $0.75 per ball;
Garry's Golf Supplies is a local retail outlet which sells golf balls. Garry's purchases the golf balls from Green Grass Incorporated at $0.75 per ball; the golf balls are shipped in cartons of 72, FOB destination. Annual demand is 172,800 golf balls at a rate of 3,322 balls per week. Garry's Golf Supplies earns 12% on its cash investments. The purchase order lead time is one week. The following cost data are available:
Relevant ordering costs per purchase order | $125.00 |
Relevant insurance, materials handling, breakage, etc., per year | $0.77 |
Purchasing at the EOQ recommended level, what are the relevant total costs?
A.$1,500.00
B.$2,085.67
C.$3,000.00
D.$2,225.00
E.$680.00
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