**Rocky Mountain Tire Center Inventory Management**Rocky Mountain Tire Center sells 13,000 go-cart tires per year. The ordering cost for each order is $35, and the holding cost is 40% of the purchase price of the tires per year. The purchase price is $25 per tire if fewer than 200 tires are ordered, $19 per tire if 200 or more—but fewer than 8,000—tires are ordered, and $15 per tire if 8,000 or more tires are ordered.**a) How many tires should Rocky Mountain order each time it places an order?**Rocky Mountain's optimal order quantity is [ ] units (enter your response as a whole number).

Given data: Annual demand(D) = 13,000 tiresOrdering cost(S) = $35 per orderHolding Cost (H) = 40% or…

Answered: Rocky Mountain Tire Center sells 13,000…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Similar questions

Company S offers the following discount schedule for its sheets. Company K orders sheet from Company S. Company K has an ordering cost of $45. The carrying cost is 20%, and the annual demand is 100 sheets. Order Unit Cost 9 sheets or less $18.00 10 to 50 sheets $17.50 More than 50 sheets $17.25 The total cost of ordering more than 50 sheets is
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Short answer question
A gift shop sells 400 boxes of scented candles a year. The ordering cost is $50 for scented candles, and holding cost is $25 per box per year. What is the economic order size for scented candles?
Paulin’s muffler shop has one standard muffler that fits a large variety of cars. The shop wishes to establish a periodic review system to manage inventory of this standard muffler. Use the information table to determine the optimal inventory target level (or order-up to level). Annual demand 3,910 mufflers ordering cost $75 per order S/D of daily demand 6 mufflers/wk. day service probability 87% Item cost $ 27.00 per muffler lead time 2 wk. Days Annual holding cost 36 % of item value wk. Days 230 per year Review period 18 working days What is the optimal target levels (order up to levels) use excels NORMSINVI() function to find the correct critical value for the given a-level. Do not round intermediate calculations. Round value 2 decimal places and final answer to the nearest whole number If the service probability is 90%, the optimal target level will increase, decrease or…
A jewelry firm buys semiprecious stones to make bracelets and rings. The supplier quotes a price of $8.80 per stone for quantities of 600 stones or more, $9.20 per stone for orders of 400 to 599 stones, and $9.70 per stone for lesser quantities. The jewelry firm operates 230 days per year. Usage rate is 16 stones per day, and ordering costs are $45.a. If carrying costs are $2 per year for each stone, find the order quantity that will minimize total annual cost. (Do not round intermediate calculations, except for order quantities which should be rounded to the nearest whole number. Round your final answer to the nearest whole number.) b. If annual carrying costs are 20 percent of unit cost, what is the optimal order size? (Do not round intermediate calculations, except for order quantities which should be rounded to the nearest whole number. Round your final answer to the nearest whole number.) c. If lead time is 3 working days, at what point should the company reorder? (Do…
Annual demand (D) is 49,000 units. Ordering Cost (S) is $1,000 per order. Holding cost (H) is $2 per unit per year. Find economic order quantity (Q*). 7,000 units 49,000,000 units 4,950 units 3,500 units 4,083 units
Annual demand is 7,000 units; Carrying cost is $4 per unit; Economic Order Quantity is 1,000 units; Safety stocks are 20 units. Compute the total annual carrying cost
If Sarah wants to minimize inventory holding and ordering costs, how much Palm oil should she purchase with each order (in kgs)?
If annual demand is 12,000 units, annual holding cost is $15 per unit, and setup cost per order is $25, what is the EOQ lot size?
snip
Suppose you have been employed by Kam Steels Corporation as a financial manager. You want to change old inventory ordering system to the just-in-time inventory method. The shareholders and the CEO of the firm would like to know how the new would operate and the benefits and disadvantages of the just-in-time inventory method. By providing a high-quality argument, please explain how the new would operate and its benefits and disadvantages to the shareholders and the CEO of the firm.

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