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Rocky Mountain Tire Center sells 7,000 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 $23 per tire if fewer than 200 tires are ordered, $18 per tire if 200 or more-but fewer than 5,OOO-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?
The optimal order quantity is ___ units?
b) What is the total cost of this policy?
Operations Management is about a book review. Title of the book is "Goal". This book has been written by Dr. Eliyahu Goldartt. The book has been appreciated by many as one of those books which offers an insight into the operations and strategic capac..
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An analysis of the holding costs, including the appropriate annual holding cost rate.
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