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Management Studies

Q. Rocky Mountain Tire center sells 11,000 go-cart tires per year. The ordering cost for each order is $40 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, $19 per tire if 200 or more, but fewer than 8,000 tires are ordered and $14 per tire if 8,000 or more tires are ordered.

a.) Explain how many tires should Rocky Mountain order each time it places an order?

b.) Illustrate what is the total cost of this policy?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M9309205

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