Miniature Company sells stuffed tigers. Birtal Inc. manufactures many different stuffed animals. Miniature orders 21,200 tigers per year, 22 per week, at $10 per tiger. The manufacturer covers all shipping costs. Miniature earns 20% on its cash investments. The purchase-order lead time is 2 weeks. Miniature sells 320 tigers per week. The following data are available (based on management's estimates):
Estimated ordering costs per purchase order | $23 |
Estimated insurance, materials handling, breakage,
Actual ordering costs per order | $27 |
What is the economic order quantity using the estimated amounts?
◦ 698.3 stuffed tigers
◦ 329.2 stuffed tigers
◦ 232.8 stuffed tigers
◦ 493.8 stuffed tigers