Answer the following question(s) using the information below:
Green Grass Incorporated is a distributor of golf balls. Garry's Golf Supplies is a local retail outlet which sells golf balls. Garry's purchases the golf balls from Green Grass Incorporated at $0.75 per ball; the golf balls are shipped in cartons of 72. Green Grass Incorporated pays all incoming freight, and Garry's Golf Supplies does not inspect the balls due to Green Grass' reputation for high quality. Annual demand is 172,800 golf balls at a rate of 3,322 balls per week. Garry's Golf Supplies earns 12% on its cash investments. The purchase-order lead time is one week. The following cost data are available:

-Purchasing at the EOQ recommended level, how many deliveries will be made during each time period?

Question

Answer the following question(s) using the information below:
Green Grass Incorporated is a distributor of golf balls. Garry's Golf Supplies is a local retail outlet which sells golf balls. Garry's purchases the golf balls from Green Grass Incorporated at $0.75 per ball; the golf balls are shipped in cartons of 72. Green Grass Incorporated pays all incoming freight, and Garry's Golf Supplies does not inspect the balls due to Green Grass' reputation for high quality. Annual demand is 172,800 golf balls at a rate of 3,322 balls per week. Garry's Golf Supplies earns 12% on its cash investments. The purchase-order lead time is one week. The following cost data are available:
 
-Purchasing at the EOQ recommended level, how many deliveries will be made during each time period?

Quizplus · Accepted Answer

- EOQ = sqrt(2DS/H) = sqrt((2*172,800*0.75)/(20%*0.12)) = 960
- Number of orders per year = Annual demand / EOQ = 172,800 / 960 = 180
- Number of orders per week = Number of orders per year / 52 weeks = 180 / 52 = 3.46
- Since Garry's Golf Supplies orders once a week, round up to 4 orders every 5 weeks, so there will be 8.3 deliveries during each time period.

Answer the Following Question(s) Using the Information Below