Question
Rocky Mountain Tire Center sells 12,000 go-cart tires per year. The ordering cost for each order is $35, and the holding cost is 30% of
Rocky Mountain Tire Center sells 12,000 go-cart tires per year. The ordering cost for each order is $35, and the holding cost is 30% of the purchase price of the tires per year. The purchase price is $19 per tire, if fewer than 200 tires are ordered, $18 per tire if 200 or more-but fewer than 5,000-tires are ordered, and $14 per tire if 5,000 or more tires are ordered
a.) How many tires should Rocky Mountain order each time it places an order? Rocky Mountain's optimal order quantity is ___ units (enter your response as a whole number).
b.) What is the total cost of this policy? Total annual cost of ordering optimal order size = $ (round your response to the nearest whole number).
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