What is the total cost of this policy

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Reference no: EM131719838

Rocky Mountain Tire Center sells 9,000 go-cart tires per year. The ordering cost for each order is $40, and the holding cost is 50% of the purchase price of the tires per year. The purchase price is $18 per tire if fewer than 200 tires are ordered, $16 per tire is 200 or more - but fewer than 5000 - tires are ordered and $13 per tire if 5,000 or more tires are ordered.

Rocky Mountain's optimal order quantity is 5000 units

1. What is the total cost of this policy?

Reference no: EM131719838

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