Globe Inc. is a distributor of DVDs. DVD Mart is a local retail outlet which sells blank and recorded DVDs. DVD Mart purchases DVDs from Globe at $29.00 per DVD; DVDs are shipped in packages of 70. Globe pays all incoming freight, and DVD Mart does not inspect the DVDs due to Globe's reputation for high quality. Annual demand is 320,000 DVDs at a rate of 6500 DVDs per week. DVD Mart earns 13% on its cash investments. The purchase-order lead time is one week. The following cost data are available:
What is the economic order quantity?
A) 63.26 packages
B) 44.19 packages
C) 5.81 packages
D) 62.49 packages
Correct Answer:
Verified
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