What is the total cost of this policy and optimal order size

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Reference no: EM131148824

Rocky Mountain Tire center 11,000 go-cart tires per year. The ordering cost for each order is $40, and the holding cost is 50% of the purchace price of the tires per year. The purchase price is $21 per tire if fewer than 200 tires are ordered, $19 per tire if 200 or more - but fewer than 8000, tires are orderd and $18 per tire if 8,000 or more tires are ordered.

a. how many tires should rocky mountains tire order each time it time it places an order?

b. what is the total cost of this policy?

c. what is the optimal order size?

Reference no: EM131148824

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