Rocky Mountain Tire Center sells 14,000 go-cart tires per year. The ordering cost for each order is $40, 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 5,000, tires are ordered, and $14 per tire if 5,000 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 5000 units (enter your response as a whole number). b) What is the total cost of this policy? Total annual cost of ordering optimal order size = $(round your response to the nearest whole number).
Rocky Mountain Tire Center sells 14,000 go-cart tires per year. The ordering cost for each order is $40, 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 5,000, tires are ordered, and $14 per tire if 5,000 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 5000 units (enter your response as a whole number). b) What is the total cost of this policy? Total annual cost of ordering optimal order size = $(round your response to the nearest whole number).
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Transcribed Image Text:Rocky Mountain Tire Center sells 14,000 go-cart tires per year. The ordering cost for each order is $40, 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 5,000, tires are ordered, and $14 per tire if 5,000 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 5000 units (enter your response as a whole number).
b) What is the total cost of this policy?
Total annual cost of ordering optimal order size=
(round your response to the nearest whole number).
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