An automotive repair shop stock many sizes of tires one

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An automotive repair shop stock many sizes of tires. One particular size and model is purchased for $15 and sold for 30. The manager estimates the cost to order at $75m, including the delivery charge and paperwork. Using the cost of rent, interest, and utilities, the manager estimates the cost carrying inventory at approximately 50% per year based on average inventory value. The shop sells approximately 2,000 of these tires per year. Determine the optimal reorder quantity and reorder point. Orders are received two weeks after placement.

Reference no: EM13626499

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