Question
Randy's Golf Supplies is a local retail outlet that sells golf balls. Randy's purchases the golf balls from Green Grass Incorporated at $0.75 per ball;
Randy's Golf Supplies is a local retail outlet that sells golf balls. Randy'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. Randy'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, how many deliveries will be made to Randy's Golf Supplies during each time period?
a.
12 deliveries
b.
9 deliveries
c.
3 deliveries
d.
6 deliveries
e.
2 deliveries
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