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Q. Rocky Mountain Tire Center sells 15,000 go-cart tires per year. The ordering cost for each order is $50 and the holding cost is 15% of the purchase price of the tires per year. The purchase price is $18 per tire if fewer than 500 tires are ordered, $17 per tire if 500 or more-but fewer than 1,500-tires are ordered and $16 per tire if 1,500 or more tires are ordered.
Explain how many tires should Rocky Mountain order each time it places an order? Illustrate what is the total cost of this policy? Justify your answer and explain how calculations.
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