How many tires should rocky mountain order each time

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Reference no: EM131942722

Rocky Mountain Tire Center sells 11,000 go-cart tires per year. The ordering cost for each order is $40, and the holding cost is 50% of the purchase price of the tires per year.

The purchase price is $18 per tire if fewer than 200 tires are ordered, $16 per tire if 200 or more, but fewer than 5,000, tires are ordered, and $13 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? (enter your response as a whole number).

b) What is the total cost of this policy?

Total annual cost of ordering optimal order size equals? (round your response to the nearest whole number).

Reference no: EM131942722

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