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Rocky Mountain Tire Center sells 8,000 go-cart tires per year. The ordering cost for each order...

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General Management

Rocky Mountain Tire Center sells 8,000 go-cart tires per year.The ordering cost for each order is $35, and the holding cost is50% of the purchase price of the tires per year. The purchase priceis $24 per tire if fewer than 200 tires are ordered, $19 per tireif 200 or more, but fewer than 5,000 tires are ordered, and $13 pertire if 5,000 or more tires are ordered.

a. How many tires should Rocky Mountain order each time itplaces an order?

b. What is the total cost of this policy??

Answer & Explanation Solved by verified expert
4.0 Ratings (664 Votes)
a Since it is stated that Rocky Mountain Tyre Center sells 8000 tyres it is a good idea to check if the cost of ordering 8000 tyres at once comes to a minimum as    See Answer
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