Rocky mountaintire center sells 7000 go-cart tires per year, Ask an Expert

Management Studies

Rocky Mountain

Tire Center sells 7,000 go-cart tires per year. The ordering cost for each order is $40, and the holding cost is 30% of the purchase price of the tires per year.

The purchase price is $23 per tire if fewer than 200 tires are ordered, $16 per tire if 200 or more, but fewer than 5.000, tires are ordered, and S13 per tire if 5.000 or more tires ordered.

a) How many times should Rocky Mountain order each time it places an order?

Rocky Mountain's optimal order quantity is ___ units (enter your response as a whole number).

b) What is the total cost of this policy? Total annual cost of ordering optimal order size = $ ___ (round your response to the nearest whole number).

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M92783017

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