Calculating economic order quantity


Problem: Rocky Mountain Tire Center sells 20,000 go-cart tires per year. The ordering cost for each order is $40, and the holding cost is 20% of the purchase price of the tires per year. The purchase price is $20 per tire if fewer than 500 tires are ordered, $18 per tire if 500 or more - but fewer than 1,000 - tires are ordered, and $17 per tire if 1,000 or more tires are ordered. How many tires should Rocky Mountain order each time it places an order?

Solution Preview :

Prepared by a verified Expert
Other Management: Calculating economic order quantity
Reference No:- TGS01769088

Now Priced at $20 (50% Discount)

Recommended (96%)

Rated (4.8/5)