Find the firm optimum economic order quantity for tires

Reference no: EM13722600

Determine the accurate solution of the following question

Question- Perkalater Carriers employs a large fleet of trucks. To keep fleet operations running smoothly, it must order 540 tires annually at a cost of $200 per tire. The company orders the tires by telegram from the Midland Tire Company. Each order costs $48. Perkalater stores the tires in a central warehouse in Pittsburgh, Pennsylvania, which is the company's headquarters. The estimated carrying cost for holding the tire inventory is 25%.

Part 1- Assuming 360 days per year, what is the firm's optimum Economic Order Quantity for tires?

I need experts help to find the firm's optimum Economic Order Quantity for tires.

Reference no: EM13722600

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