Reference no: EM132620423

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