Calculate economic order quantity

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Reference no: EM1343308

Calculating economic order quantity

Rocky Mountain Tire Center sells 20,000 go-cart tires per year. The ordering cost for each order is $40, and the holding cost is 20% of the purchase price of the tires per year. The purchase price is $20 per tire if fewer than 500 tires are ordered, $18 per tire if 500 or more - but fewer than 1,000 - tires are ordered, and $17 per tire if 1,000 or more tires are ordered. How many tires should Rocky Mountain order each time it places an order?

Reference no: EM1343308

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