Using the economic ordering quantity model

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Leesburg Autos orders their tires from a wholesaler. Every year Leesburg requires 10,000 tires of a certain type. The tires cost $250 per tire from their supplier.

The estimated cost of ordering at the supplier and paying shipping fees is $90 per order: K = $90.

The holding cost per tire is estimated to be 10% of the cost of the tire: h = 0.1 × $250 = $25.

Using the economic ordering quantity model, the order size that would minimize the total costs is equal to?

Reference no: EM132164545

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