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 R1.15 per ball; the golf balls are shipped in cartons of 52. 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 157,520 golf balls at a rate of 3291 balls per week. Martin'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 R125.00

Carrying costs per carton per year:

Relevant insurance, materials handling,

breakage, etc., per year R0.77

Purchasing at the EOQ recommended level, how many deliveries will be made during each time period? (Round costs to the nearest cent and quantities to the nearest whole number.)

 

Answer rating: 100% (QA)

1 Calculate EOQ Annual demand 157520 golf balls Ordering cost per purchase order R12500 ... View the full answer