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1. Rocky Mountain Tire Center sells 6,000 go-cart tires per year. The ordering cost for each order is $35, and the holding cost is 40?% of the purchase price of the tires per year. The purchase price is $22 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 $15 per tire if 5,000 or more tires are ordered
?a) How many tires should Rocky Mountain order each time it places an? order? (optimal order quantity)
b) What is the total cost of this? policy?
2. The manager of EZ-Mart (open 365 days a year) sells 60 cases of water each day. Order costs are $20 per order, and water costs $0.30 per bottle (each case of water contains 24 bottles). Daily holding costs are equal to 2 percent of the cost of the water. What is the economic order quantity for water?
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