**Rocky Mountain Tire Center Inventory Management** The Rocky Mountain Tire Center manages the sale of 6,000 go-cart tires annually. Here are the details regarding the ordering and holding costs: - **Ordering Cost**: Each order costs $40. - **Holding Cost**: Equivalent to 50% of the tire purchase price annually. - **Tire Purchase Prices**: - $23 per tire for orders fewer than 200 tires - $18 per tire for orders between 200 and 4,999 tires - $16 per tire for orders of 5,000 tires or more **Questions and Solutions:** a) **Optimal Order Quantity** - Determination: Rocky Mountain’s optimal order quantity is 231 units. b) **Total Cost of Policy** - Determination: The total annual cost of ordering the optimal order size is not calculated in the provided text. This analysis assists in identifying the balance between order frequency and costs to optimize inventory management for the Tire Center.

Rocky Mountain Tire Center Inventory Management The Rocky Mountain Tire Center manages the sale of 6,000 go-cart tires annually. Here are the details regarding the ordering and holding costs: - Ordering Cost: Each order costs $40. - Holding Cost: Equivalent to 50% of the tire purchase price annually. - Tire Purchase Prices: - $23 per tire for orders fewer than 200 tires - $18 per tire for orders between 200 and 4,999 tires - $16 per tire for orders of 5,000 tires or more Questions and Solutions: a) Optimal Order Quantity - Determination: Rocky Mountain’s optimal order quantity is 231 units. b) Total Cost of Policy - Determination: The total annual cost of ordering the optimal order size is not calculated in the provided text. This analysis assists in identifying the balance between order frequency and costs to optimize inventory management for the Tire Center.

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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