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 $1.15 per ball; the golf balls are shipped in cartons of 72. 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 158,520 golf balls at a rate of 3891 balls per week. Martin's Golf Supplies earns 8% on its cash investments. The purchase-order lead time is one week. The following cost data are available:
| Relevant ordering costs per purchase order | $128.00 |
Carrying costs per carton per year:
Relevant insurance, materials handling,
| breakage, etc., per year | $0.87 |
What is the economic order quantity? (Round costs to the nearest cent and quantities to the nearest whole number.)
◦ 183 cartons
◦ 274 cartons
◦ 275 cartons
◦ 367 cartons
Martin Puryear, Untitled IV.
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