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Miami Tanners purchases 4,160 bulbs per year, ordered in lots of 80 bulbs per week at $150 per bulb. The vendor covers all shipping costs. Miami Tanners is not required to inspect the shipment upon entry. Miami Tanners earns 20% on its cash investments. The purchase order lead time is two weeks. The following cost data are available:
Relevant ordering costs per purchase order $53.75
Relevant insurance, materials handling, breakage, and so on, per year $4.25
Problem 1. What is the economic order quantity?
A) 324 bulbs
B) 235 bulbs
C) 114 bulbs
D) 100 bulbs
E) 110 bulbs
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