Rocky mountain tire center sells 8000 go-cart tires per, Ask an Expert

Management Studies

Rocky Mountain Tire Center sells 8,000 go-cart tires per year. The ordering cost for each order is $35, and the holding cost is 50% of the purchase price of the tires per year. The purchase price is $24 per tire if fewer than 200 tires are ordered, $19 per tire if 200 or more, but fewer than 5,000 tires are ordered, and $13 per tire if 5,000 or more tires are ordered.

a. How many tires should Rocky Mountain order each time it places an order?

b. What is the total cost of this policy?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M93127691

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