Compare each of the cost components using the EOQ with COQ

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Reference no: EM132199292

Nissan orders TunnelFire© all-weather brand tires for its Nissan Leafs where 4 tires (1 set) are used per car. Nissan pays $174 for each tire and estimates that the annual holding cost is 35 percent of each tires’ value. It costs approximately $250 to place an order (clerical costs). Nissan currently orders 1890 sets of tires per month. Determine all of the relevant costs for the current order quantity (denoted as COQ). Then, calculate the EOQ and the number of orders Nissan will place per year. Use these values to calculate the total cost using the EOQ. Compare each of the cost components using the EOQ with COQ. Which order quantity should Nissan use?

Reference no: EM132199292

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