Reference no: EM132620428

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 are the total relevant inventory costs at the economic order quantity? Economic order quantity is 114

A) $3,913.65

B) $3,948.50

C) $4,975.86

D) $6,238.62

E) $4,862.84