What is the total cost of this policy

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Reference no: EM13780101

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?

Reference no: EM13780101

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