Question

Par Uno Inc. is a distributor of golf balls. Comprabola's Golf Supplies is a local retail outlet which sells golf balls. Comprabola's purchases the golf balls from Par Uno Inc. at $0.75 per ball; the golf balls are shipped in cartons of 72. Par Uno Inc. pays all incoming freight, and Comprabola's Golf Supplies does not inspect the balls due to Par Uno' reputation for high quality. Annual demand is 155,520 golf balls at a rate of 2,991 balls per week. Comprabola'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 cost per purchase order carrying cost per carton per year : $125

Relevant insurance, material handling, breakage, etc., per year : $0.77


Purchasing at the EOQ recommended level, how many deliveries will be made during each time period?

2 deliveries

6.0 deliveries

7.91 deliveries

12 deliveries

Answer 1