Question
ocky Mountain Tire Center sells 14,000 go-cart tires per year. The ordering cost for each order is $35, and the holding cost is 40% of
ocky Mountain Tire Center sells 14,000 go-cart tires per year. The ordering cost for each order is $35, and the holding cost is 40% of the purchase price of the tires per year. The purchase price is $21 per tire if fewer than 200 tires areordered, $16 per tire if 200 ormore, but fewer than 5,000, tires areordered, and $14 per tire if 5,000 or more tires are ordered.
a) How many tires should Rocky Mountain order each time it places anorder?
RockyMountain's optimal order quantity is
b) What is the total cost of thispolicy?
Total annual cost of ordering optimal order size=$
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